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Coffee Market Report 14th March to 18th March 2016

COFFEE MARKET NEWS Week Ending: 18th Mar 2016

14thMar

15thMar

16thMar

17th Mar

18thMar

NYC

127.20

125.70

129.05

132.55

134.30

LIFFE

1438

1423

1426

1459

1482

 GBP/USD

1.4301

1.4143

1.4241

1.4484

1.4480

 

 

 

 

 

Fun coffee fact of the day:  As always, the national Aeropress championships produce the most quirky and innovative posters. Have a gander here.

NYC:

Over the week, Arabica Coffee futures gained 8.50 cents, or 6.75% for the May delivery contract. What began as speculative short covering, developed into new speculative longs, fuelled by the recovery in the Brazilian real and bullish technical behaviour.

LIFFE:

Robusta prices rose on Friday, aided by a lack of origin selling as producers held out in the hope of further price rises. Sentiment was also aided by gains in NYC prices. On Friday, the Robusta futures contract closed $23 higher than the previous day at $1,482/tonne; this meant a gain of 3.8% on the week given the previous Friday’s settlement price was $1,427/tonne.

Currency:

GBP/EUR:

Euro stronger as ECB rules out further extraordinary measures. On Friday morning the ECB ruled out further ‘extraordinary’ measures to support the Eurozone economy which has strengthened the Euro.

GBP/USD:

Sterling exchange rates recovered towards the end of the week following the Bank of England’s announcement that the next policy change would likely be an interest rate hike rather than an interest rate cut which had been discussed recently. UK interest rates have now remained on hold for seven years and with the ECB having cut interest rates to 0% last week and the US Federal Reserve also not interfering with monetary policy earlier this week this has caused Sterling to recover against the Euro and hit a 5 week high to buy US Dollars.

Origin News:

Brazil: The situation in Brazil’s Robusta producing areas remains at a critical level. The continued lack of rains in the Espirito Santo state of Brazil is taking its toll with the formation of the bean severely impacted. Edimilson Calegari, General Manager of Cooabriel, the country’s biggest grower of Robusta, now estimates production for Cooabriel could be less than 6 million bags, the lower end of the 6-7 million bag estimate he gave CoffeeNetwork last month.

Guatemala: Guatemala coffee exports are up! The latest data from The National Coffee Association of Guatemala (Anacafe) showed that coffee exports in February totalled 315,037 bags, up 28.61% from the same month last year. Roya still remains a problem however. “The main issue with the Guatemalan coffee sector is still coffee leaf rust,” Roberto Marinelli, Vice President of the Guatemala Coffee Export Association (ADEC) stated last week. “With the weather changes, the fungus has become more aggressive. It also affects different regions based on the weather patterns. Last year it was the West and South side of the country, while this year, it is more aggressive in the East part of the country.” In order to mitigate the impact of the disease, the Guatemala Coffee Association (Anacafe) has been helping negotiate better prices of chemicals for producers so that they can spray more times per year in an effort to prevent damage caused by coffee leaf rust.

Hawaii: Guatemala is not the only origin struggling with Roya however. A coffee berry borer conference will took place last week in Kona, during which coffee producers alongside scientists and researchers brainstormed and discussed ways  to help the Hawaiian coffee sector combat the outbreak of the coffee berry borer. Topics included biocontrol plans using parasitoids to prevent further outbreaks, field sanitation such as strip picking, pruning, pest monitoring, trap usage and timely spraying in an effort to control the outbreak of the pest that has been damaging Hawaii’s coffee fields.

Myanmar:  Myanmar Coffee Association (MCA) staged its 2nd Annual Certified Coffee Cupping Competition in Pyin Oo Lwin at the Mandalay Coffee Group Co. Ltd.’s processing plant, Anisakan, Pyin Oo Lwin, Mandalay-Lashio By-Pass Road, Mandalay Division. Up to 60 coffee samples submitted by farmers from Myanmar’s Arabica-growing regions in and around Pyin Oo Lwin (Mandalay), Ywangan (Southern Shan), and other areas were analysed by a three-member panel of accredited international judges.

In other news:

Farmers pledged more support. Latin American countries support Colombia in promoting the profitability of coffee growers. During a meeting with Roberto Vélez, CEO of the Colombian Coffee Growers Federation (FNC), representatives of Mexico, Peru, Ecuador, Bolivia, Costa Rica, Honduras and Panama expressed their support for Colombia’s recent efforts to increase and stabilize the income of coffee growers. As Mr. Vélez has pointed out, the initiative is grounded on the need to establish a global dialogue between coffee producers and other actors of the industry that helps overcome current challenges such as coffee grower income, climate change, and generational knowledge.

Nestlé Vietnam to invest USD 70 million in a new factory in the north of Vietnam. Nestlé Vietnam began construction of a new USD 70 million factory at Thang Long II Industrial Park located in Hung Yen province, North of Vietnam. The factory will be built on an area of 10 hectares to facilitate the company’s product innovations for the local consumption.

Amsterdam Coffee Festival. Will & Henry attended the Amsterdam Coffee Fest on Friday! A pre-cursor to the London Coffee Festival in two weeks’ time! Lots of great coffee- East Africans stole the show! Well done all the amazing Dutch Roasters (and Belgian Chocolate) exhibitors!