COFFEE MARKET NEWS Week Ending: 30th January 2015
|GBP / USD
What seemed like a positive start for the market last week soon ran in to trouble and by Thursday afternoon, we had eradicated all the gains made since Monday, reaching 161.50 – an 11 month low. Improved weather conditions in Brazil, and a strong USD consider the main factors in suppressing the upside momentum for NYC.
London saw increased activity this week with selling pressure finally forcing the market to new recent lows. The fourth quarter of last year saw final figures for annual Robusta exports increase almost 1m bags to a total of 43.5m. (Arabica exports fell marginally by 250,000 Bags to 68m)
Currency – the USD remains strong compared to many currencies, as Euro fears, and weaker Euro economies fuel support for the ‘safe haven’ of the Greenback.
Brazil – continued rain throughout much of Brazil appears music to the ears of many producers (and Roasters who fear the upside potential of NYC) and whilst outlook could be improving for yields, it seems that quality is also on the Up! Recently, twenty three lots received the Cup of Excellence designation at the recent Brazil Naturals Cup of Excellence competition in Araxá, where the record for the highest individual score and average score were broken. The highest score (95.18) went to a coffee from a five-hectare farm in Cristina, Mantiqueria de Minas, that is operated by brothers Antônio and Sebastian Marcio da Silva. The combined average score among the 23 winning lots was 88.26, another record-high for the Brazil Naturals competition.
Indonesia – Internal pricing continues to firm up as the New York market remains subdued forcing export differentials to remain strong. Nearby shipments offering little in the way of certified coffees and in some cases quality is becoming a concern, with one or two mouldy surfacing in an effort to find a home.
Colombia – Certified coffees; specifically Fairtrade Organic are now in very short supply with some exporters unable to supply until new crop! Rumours that roasters are being supplied with inconsistent qualities are prevalent causing confusion as to the actual quality of this season’s crop. One man’s Excelso it seems is another’s UGQ.
Zimbabwe – once the jewel of Sub Saharan African agricultural production, now Zimbabwe lags behind after decades of misrule, and misappropriation. 1999 saw production peak at over 15,000MT, last year saw yields disappointingly around 200MT. But could all this be about to change? EU funding and improved local financing is helping farmers get back on track, with 2015 purportedly expected to be the best year in recent history.