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Coffee Market Report 12th October to 16th October 2015

COFFEE MARKET NEWS Week Ending: 16th Oct 2015




15th Oct



US Bank holiday






















Coffee Day Enterprises (owner of Café Coffee Day – India’s largest coffee shop chain) on Wednesday launched the country’s largest IPO (initial public offer) in three years, which saw an overall subscription of 9% on the first day.



Arabica coffee futures plunged by 5.9% on Friday as weather analysts in Brazil are now seeing good rains after the October 22-26 period. Traders saw several years of drought drawing to a close, a weak Brazilian real and a change to the grading of coffee in Colombia to lower the quality of the beans that may be exported in order to prop up sales of Colombian coffee, which is also being threatened by dry weather due to El Niño.


Ultimately it transpired that getting a step ahead of NY but only making a slight break of 1667 wasn’t enough to secure London’s downtrend escape and it veered abruptly back to the 1610 base rim again Friday.


GBP/USD – The trend was marginally positive in spite of the dip on Friday. Mixed data from either side of the Atlantic makes it hard to know what will happen next. Traders are all trying to second guess the timing of the first interest rate hikes from both the Federal Reserve and the Bank of England. Mixed data from across the Eurozone and poor data from Germany are holding the euro back. We have yet to see the real impact of the VW scandal on German exports but this will most likely only serve to weaken it further. The GBP/EUR is consistently between a range of €1.3350 and €1.3850 and this doesn’t appear set to change any time soon.



Rain in Minas Gerais? Lack of rainfall has provoked concerns of disruption to the flowering process. Low rainfall raises the threat of trees not blooming, or of blossoms aborting rather than setting to allow the development of cherries. However, a significant amount of rainfall is predicted to hit Minas Gerais, which was the main driver of the dip in Friday of the NYC.


Rule change! Colombia’s national coffee committee modified export standards and changed its guidelines for guaranteed crop purchases in a bid to help farmers weather the El Nino drought, which has affected nearly half of the country’s growing regions, the committee said late on Thursday. The moves comes as the committee, which includes representatives of coffee regions and the ministers of finance, agriculture and commerce, tries to stem the repercussions of El Nino, which has caused drought in areas with nearly 400,000 hectares of coffee crops.

Colombia, the world’s top producer of high-quality Arabica (Specialty coffee accounts for one third of Colombia’s coffee production) has long prided itself on exporting only the finest beans. Under the changes, lower quality product will be eligible for export.

“To facilitate the commercialization of different qualities of coffee, the national coffee committee also adopted a new resolution which permits the export of beans known as seconds or co-products,” the committee said in a statement.

Growers selling their coffee under the national coffee fund’s guaranteed purchase policy will now have the quality of their beans judged differently.

“The committee decided to vary the system of coffee buying by the national coffee fund in compliance with the purchase guarantee policy – completing the respective quality analysis based on threshing factor instead of the healthy kernel methodology,” the statement said.

Despite the export rule change, only the best coffee will receive the quality certification traditionally associated with beans approved for export, the committee added.

“In this way the positioning of Colombian origin coffee as globally high-quality is safeguarded.”

The measures will be implemented immediately, Roberto Velez, head of the national growers federation said in the statement.


Old- and new-crop Vietnamese robusta supplies are expected to be mixed in some November and December shipments, incorporating coffee from record stocks from the 2014/15 harvest and raising some concerns over quality. Mixing of the two crops is normal but the large amount of old crop available in Vietnam, the world’s top robusta grower, meant it was likely to be on a larger scale this year. It is estimated the Vietnamese old-crop carryover at up to 500,000 tonnes.

In other news…

The Future is Orange. The UK specialty coffee segment can expect 13 percent year-on-year growth, outpacing the total UK coffee market (10 percent growth) and the British economy as a whole. Allegra published a recent report titled The Future of Coffee which revealed a great deal of positive data on the UK coffee market.