Market Reports Blog / Market Reports / Coffee Market report 1st December 2014 to 5th December 2014

Coffee Market report 1st December 2014 to 5th December 2014

COFFEE MARKET NEWS Week Ending: 5th Dec 2014

 

 

High

Low

Close

NYC

190.80

178.95

180.10

LIFFE

2063

2034

2038

GBP / USD

1.5748

1.5587

1.5587

 

 

 

 

 

 

Commentary

Arabica prices over the week began to form a trend downwards, even against a backdrop of bullish news from a number of banks citing expectations for higher prices next year. Good Brazilian rains, a weaker Real / Dollar and the expectation of a substantial sell off in early January from Funds re-balance their portfolios all adding to the bearish trend.

 

Robusta market continues to be range bound between $2000 and $2100 with no fundamental news to provide a solid direction. The Coffee conference in Vietnam has sidelined many players for the week, and the proximity to Christmas prevents many traders from taking new positions before an extended break.

 

Origin Activity

Brazil – Rains continue throughout the country, albeit patchy showers in some areas, but enough to allay immediate fears for next year’s crop development. Daterra held its annual auction this week of the Estate’s Master Pieces – the best of the best, and found strong interest and competition from across the globe. DRW were lucky enough have a number of successful bids, and coffee should be arriving early next year. Quality remains good for the current crop and shipments continue unabated.

 

Honduras – Some exporters are withholding offers of HG and SHG qualities for the time being, as differentials have fallen to such unattractive levels (pressured by Colombia’s softer price levels) that they are unwilling to sell. The recent downtrend in the NYC terminal market is only adding insult to injury. Certified coffees remain available though, supported by their premiums and minimum price structure.

 

Kenya – Main Crop coffees should soon begin flowing in to the weekly Nairobi Coffee Auction, though current supply is still relatively low with weekly volumes struggling to breach 15,000 Bags. Qualities remain as expected for this time of year.

 

Tanzania – Auctions are slow, with low volume and indications that they will soon be over. Under grade qualities appear to be firm, though main grade coffees still present a good buying opportunity.

 

Ethiopia – New Crop offers are coming in, in droves, with huge price variations from one exporter to another demonstrating the disparity in qualities, efficiencies and price risk management strategies of some of the exporters – another season of navigating the minefield of Ethiopia sourcing beckons. Certified offers either remain elusive, or stratospherically high! 

 

Jamaica – not a common origin to report on, but one with an interesting future – after last year’s disastrous crop reducing by 50% created a substantial shortage and subsequent price spike; we are set for an even worse year this season. Another poor crop has yielded around 60% of last year’s figure – resulting in a production of only 30% of what it was 3 years ago! Don’t’ be surprised to see trading around the 100usd/kg mark over the coming months.