The Brazilian National Statistics Agency IBGE forecast that the Brazil coffee crop shall be 5.70% larger than the previous year, at 55.50 million bags. The IBGE is traditionally very conservative in terms of its figures and is usually considered to be between 5% and 10% below reality. The forecast would therefore be at the lower end of independent local and international surveys, the majority of which forecast an estimated new Brazil 2023 coffee crop at a median of 63 million bags.
The Vietnam Customs Authority has reported that Vietnam’s coffee exports for January have registered 27.70% lower than the previous month, at 2,375,733 bags. This number is proving to be marginally lower than the 2.66 million bags that had been initially forecast for the month’s coffee exports. This sees the cumulative export performance for the first four months of the current October 2022 to September 2023 coffee year in Vietnam, the largest producer of Robusta coffee at 79,016 bags or 0.88% higher than the same period in the previous year, at a total 9,068,933 bags.
This comparatively lower export performance month on month during January from Vietnam can be attributed to the low period of activity within the interior over the festive Tet Lunar New Year, observed in January this year. One might anticipate an increase in coffee exports to flow to the consumer markets during this month as commercial activity gains momentum, after the celebrations.
The General Statistics Office of Vietnam has at the same time reported the country’s coffee revenue value for January 2023, which is reported at 16.35% lower than the same month in the previous year, at a total of approximately 310 million US Dollars.
March 2023 to March 2023 contract arbitrage between the London and New York markets narrowed yesterday to register this at 82.02 usc/Lb. This equates to a 46.71% price discount for the London Robusta coffee market. This wide arbitrage may be viewed by price-sensitive roasters as an attractive alternative discount for Robusta against the comparatively higher value arabica coffee.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 4,555 bags yesterday, to register these stocks at 891,933 bags, with 95.21% of these certified stocks being held in, Europe at a total of 849,250 bags and the remaining 4.79% being held in the USA at a total 42,683. Of this, a total of 490,586 bags, or 55.01% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 41.87% of these certified coffees, originating from Honduras. There was meanwhile a 9,100 bags decrease in the number of bags pending grading to the exchange; to register of 3,000 bags pending grading on the day.
It was an overall firmer day on the commodity markets yesterday, as investors await key US economic inflation data due to be released next week, which could provide speculative guidance on the Federal Reserves’ monetary policy stance. The Cocoa, Corn, Sugar, Soybean, Wheat, Gold, and Silver markets ended the day on a positive note, the Cocoa market remained unchanged on the day, while the Coffee, Palladium, and Platinum markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.209 Sterling, at 1.073 the Euro, and with the US Dollar buying 5.200 Brazil Real.
The New York and London markets started the day yesterday trading to the north of par on a modestly firmer note, both markets quickly attracted selling pressure to trend lower during the early morning session. This saw the markets set a low for the morning session, before recovering to trend back toward par during the late morning session. As the afternoon progressed the markets continued to oscillate to either side of par before coming under pressure as the activity began to increase. The New York market fell back to set a new low for the day during the mid-afternoon session, before finding support to recover some of the earlier losses during the late afternoon trade, this saw the market settle on a softer note at the close, while the London market followed suit to likewise settle on a softer note at the close, near to the lows of the day.
Resource: https://www.iandmsmith.com/news-headlines/coffee-market-reports