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Coffee Market Report 5th September to 9th October 2015

COFFEE MARKET NEWS Week Ending: 9th Oct 2015




8th Oct
























Stumpworld? Peet’s Coffee & Tea is buying the popular premium coffee company Stumptown Coffee Roasters, bringing the once independent brand more into the mainstream.


Worries about lack of rain in Brazilian and Colombian coffee regions, along with the recovery of emerging market currencies fuelled the upward move this week. This has been the fourth consecutive week with gains with weekly gains of 660 points or 5.3%.


This has been a big week breaking out of the action of the last 5 weeks with the most important feature being the catching up of the belated origin fixing which has been an issue for Robusta this year.


The US Dollar had a mixed week and this is set to continue as today is Columbus day holiday, so the rest of the week is crammed with important data releases. The GBP/USD rate is establishing a range of $1.58 at the top to $1.51 at the bottom and for now, that $1.51 level has proven to be a very strong lure to GBP buyers. Hence the bounce from that level in 5 of the last 6 weeks.

The GBP/EUR exchange rate has the ominous demeanour of a calm before a storm. The fall in German industrial output presents a potentially grim future for the strength of the Euro. German industrial strength has been propping up GDP in the Eurozone, so if it is in decline, (driven by the fall in Asian demand) coupled with the VW debacle and the potential impact this might have on demand for German cars, we may see the Euro begin to start weakening.



Brazilian consumers are expected to drink more arabica in their coffee as roasters blend in more of the arabica after a drought in robusta-growing regions, local industry association ABIC said on Thursday.

A severe drought in early 2015 in Espirito Santo state, which is the main producer of conillon, the local variety of robusta coffee, lowered production to 10.8 million 60-kg bags from 13 million the year before, the agriculture ministry estimates. “There has been a sharp rise in the price of conillon recently due to the drought and industry is adjusting,” said Nathan Herszkowicz, executive director of ABIC, told Reuters by phone. “We expect roasters to use more arabica as a result.”


The harvest has started in the lower altitude regions for extraprime washed and prime washed. The main crop and the SHB’s will start to come in around December. There was widespread concerns about a serious lack of rain but according to our Guatemalan friend the heavens opened about 10 days ago and there was a large volume of rainfall, causing quite a few landslides in certain producing areas. Both quality and quantity of the crop are predicted to be strong. The second and final round of presidential elections will be held on Sunday 25th October.

Kenya / Tanzania:

Last week saw the first auction of the New Year with a paltry 6400 bags on offer. Quality, considering the time of year is good, but the low terminal market, high demand and lack of supply creates the perfect storm and as a result differentials are very firm indeed.

Over the border in Tanzania, flow is running smoothly, and prices settled in to their ‘typical’ pattern. Although, exports unsurprisingly are dogged by delays in Dar es Salaam port. It is too early in the season to worry too much about the effect on the coffee from these delays – and in light of regional neighbours Ethiopia, one could almost consider Tanzania as being punctual!

In other news…

Top Quality Instant? Starting from next year, the Indonesian government will impose a national standard on instant coffee products marketed in the country to boost protection for a growing number of local consumers and for the local processed coffee industry.

Coffee in India: India’s Coffee Day Enterprises Ltd, which runs the nation’s biggest coffee chain, said it is eyeing a valuation of as much as 67.5 billion rupees ($1.04 billion) based on the issue price of its initial public offering next week which will make it the biggest in the local market in nearly three years.

Cafe Coffee Day competes with Starbucks Corp, Costa Coffee, and Barista among others in a primarily tea-drinking country that has in recent years seen a surge in domestic coffee consumption.