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Coffee Market Report 16th November to 20th November 2015

COFFEE MARKET NEWS Week Ending: 20th Nov 2015




19th Nov
























The American specialty coffee roaster, Intelligentsia, is being sued by their former CEO Robert Buono for not getting his fair share of the money from the recent buy out by Peet’s.


The approach of First Notice Day last Thursday produced a negative sentiment for the first half of the week, resulting in many forced fixations at the lows of the market. Surprisingly, a stark turnaround on Thursday saw the market rebound over 6 cts, and the positive feeling carried on throughout Friday to close the week out almost 10 cts up from the lows.


Robusta futures in London closed with gains. The January 2016 contract settled $12 up at $1,572 per ton helped by the New York action.


GBP/USD: a continued devaluation of the GBP sees an ever increasing dollar firm up to 1.51 – based upon poorer retail sales an sentiment.

GBP/EUR: the Euro has weakened on news that the ECB is considering further Quantitative Easing in coming months and speculation that the value, naturally, will diminish.


Brazil: More coffee? Brazil’s biggest coffee cooperative Cooxupe expects the country’s new crop that will be harvested in mid 2016 to produce 50 million to 55 million 60-kg bags, sales director Lucio Dias said on Wednesday.

He said Arabica output would recover to 38-43 million bags with improved but still irregular rains in the South Minas region of the main growing state Minas Gerais. But Robusta output would continue to struggle at 12 million bags due to drought in the north of the main producer state Espirito Santo.

“Rain in South Minas, Mogiana and in the Forested Zone were good,” Dias said. “But irregular rains in the more marginal regions of production and extremely high temperatures will keep the crop from reaching the levels recently forecasted by international groups at 60 million to 62 million bags.”

Ethiopia: the long awaited, and much anticipated traceability (electronic tagging) system has finally been unveiled. A bug bear of many a specialty trader, the lack of transparency since the introduction of the ECX has hindered many in the industry intent on only supplying fully traceable coffee. It is still in its infancy, but we will wait and see before commenting on how well the $5m program in conjunction with IBM works.

Indonesia: El Nino’s legacy leaves Indonesia with plenty of Robusta, and not enough Arabica. Despite the dry weather as a result of El Nino, total coffee (Robusta & Arabica) production increased by approximately 20 percent over 2014/15. This is led by Robusta production, which managed to avoid the worst of the El Nino dryness in 2015/16. The most significant declines in the 2015/16 production period will be experienced amongst Arabica growers, whose main production/harvest period coincided with unusually dry weather.

Kenya: Kenya expects its coffee harvest to jump by almost a quarter to 50,000 metric tonnes in the 2015/16 crop year which runs until next September buoyed by initiatives to boost production and to crop cycles, the country’s crop regulator said last week. Alfred Busolo, the acting head of the Agriculture, Fisheries and Food Authority, which regulates the industry, said the projected 22 percent increase in output was partly due to initiatives to boost production from farms including increasing acreage in new growing areas in the west of the country. Coffee output also normally follows a cyclic pattern, with a year of poor harvest followed by a high output year. Busolo said the crop was now in a recovery period. However, the plan is to increase production further. Kenya aims to double its annual coffee production by 2020 to 92,000 tonnes by increasing the area under cultivation and raising yields, helping bolster revenue from a major foreign exchange earner. To boost production, farmers will receive training and be encouraged to plant higher-yielding plants, said Busolo.

Authorities also aim to open new farming areas in the Rift Valley and western Kenya, by training farmers, offering seedlings and funding at low interest rates of 2.5-5 percent per year

In other news…

The British Coffee Association hosted its annual dinner at the Dorchester in London on Friday night – much merriment had by all!