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Coffee Market Report 19th October to 23rd October 2015

COFFEE MARKET NEWS Week Ending: 23rd Oct 2015




22nd Oct





















The arrival of rain in the main growing regions of Brazil were the main factor affecting Arabica prices. NYC finished lower on Friday as rains in Brazil continued to ease concerns about the development of next year’s crop. During the week, the Arabica coffee market declined 720 points or 5.7 per cent, taking the prices close to the lows of the December contract.


London continues to revolve around the spot month structure which weakened aggressively to open opportunities for the trade. The overall exposure has fallen quickly in the spot month with the bulk of positions moved down the board. Carry-over stocks in Vietnam into the new season are reportedly in a range of 3 to 9 million while the cause behind the lower performance on shipments this season-which run approximately 35% below the previous season-is yet to be revealed. It could be the actual crop number was lower than the market had been working with.


GBP/USD – Uncertainty over when and how the Federal Reserve will raise interest rates is weighing on the US Dollar but it is also benefitting from safe haven flows as investors run away from debt in countries more exposed to the Chinese slowdown and commodity slump. Attraction to move back to the Greenback has gathered pace so we could see it strengthening during the week ahead.

GBP/EUR saw a lot more action. Due to strong UK retail sales data (50% more than forecasted for the month of September) and the ECB talking about bond buying in December, Sterling strengthened significantly against the Euro.



After the announcement of the big news regarding the loosening of export rules for Arabica, some confusion remains over how the rules will pan out in reality. The FNC (Colombian Coffee Growers Federation) said that under-grades will be allowed to be exported but when and how this will occur in practice is unclear. We’re looking forward to seeing samples and how they will look/taste.


Tanzania’s average Arabica coffee prices rose at auction last week, buoyed by strong demand from exporters and higher New York markets, the Tanzania Coffee Board (TCB) said on Wednesday 21st October. It  ranks behind Ethiopia, Uganda and Ivory Coast in terms of output on the continent, mainly producing Arabica and a bit of Robusta. The general election that happened yesterday might cause office and port closures for the beginning of this week which could delay shipments.

In other news…

Climate change – will it  further strengthen the ‘big’ origins’ grip on coffee production?

Carlos Brando, an adviser on coffee to the International Coffee Organization and the World Bank, thinks this will be the case: “These countries concentrate the bulk of coffee research and have the most advanced extension services and financing systems, to mention only a few factors…The tendency for the largest coffee producing countries to increase their market share is likely to be intensified by climate change.” You can read more about this here.


Starbucks have opened up a new concept store on Upper St. Martin’s Lane. It acts as a window into the world of coffee. ‘The store is a platform of connection,’ said Ad de Hond, vice president of Design. ‘Everything in the store is visible – the way we make our coffees, the way we prepare and present our food, and the way we interact with our customers.’ This further highlights the global chain’s efforts to compete with/join the third wave.


Rain began falling over several regions of Brazil’s coffee and sugar cane belt on Wednesday morning, predominantly in the states of São Paulo and Minas Gerais, radar imagery maps published by local forecaster Ipmet showed. More rains are expected to follow in the region through Nov. 4.

Pricey Conilon? Worries over drought, and withholding by Vietnamese sellers of supplies, has driven the discount of Robusta coffee to Arabica beans below R$100 a bag in Brazil for the first time in 20 months, according to Cepea data. The discount of Robusta has been undermined by rain in Minas Gerais (the top Arabica-producing state) which has eased fears that blossoms developed in the ongoing flowering process will abort rather than fix, and turn into cherries to be harvested next year. While Arabica prices have fallen as a result, Robusta prices, as measured in Espirito Santo (the top growing state for the variety) rose by R$1.13 per bag to R$370.09 a bag, Cepea said.