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Coffee Market report 9th February 2015 to 13th February 2015

COFFEE MARKET NEWS Week Ending: 13th February 2015

9th Feb

10th Feb

11th Feb

12th Feb

13th Feb

NYC

167.60

159.40

159.45

164.55

163.20

LIFFE

1944

1937

1942

1988

2009

GBP / USD

1.5245

1.5260

1.5246

1.5394

1.5397

 

 

 

 

 

Commentary

The NYC has been evolving in a tight range between 160 and 170. The daily action has been dominated by switches and the index rolls are taking places with 1 and half week to go prior to FND (first notice day) for the March contract. Despite a new low of 158.40 on that particular month, the market couldn’t resist re-visiting its old friend“160”.  It is also likely that any move above 170 will be capped by origin sales and lack of conviction from specs.  Monday, 16th of Feb 2015 is bank holiday in US, so the NYC will be closed, let’s see what Tuesday 17th of Feb 2015 will bring for us.

Completely different things were happening in LIFFE as the price broke 2000$/mt. Overall the week closed ~60$/MT higher than the Monday opening. Unfortunately no bank holiday in UK (sad face) so LIFFE keeps working as normal.

Global coffee exports reached a record high in the 2014 calendar year at 111.7 million 60-kg bags, driven primarily by shipments from top grower Brazil, the International Coffee Organization (ICO) said in its monthly newsletter.

On the FX markets, Sterling was boosted by the BoE (Bank of England) Inflation Report with GBP/USD rising to a 6-week high of $1.5414 while GBP/EUR hit €1.3563.

Origin Activity

Brazil – An unprecedented drought reduced Brazil’s coffee production in 2014 and stunted tree branch growth for the upcoming 2015-16 crop. Below-normal rains followed as the 2015-16 crop flowered and its cherries developed on the trees. On Friday, large Brazilian exporter Terra Forte said in its first report of the year that Brazil will harvest 47.28 million 60-kg bags of coffee in 2015-16, up from 46.78 million bags in 2014-15. While it was Brazil’s arabica crop that was hurt by dry conditions last year, recent forecasts are calling for falling robusta crops as these growing regions are negatively impacted.

Colombia – coffee sector needs a complete overhaul to recover from a huge loss of global market share, says a government-commissioned report seen by Reuters whose recommendations include deregulation of exports and the introduction of a minimum price. Despite the undisputed quality of its mild arabica coffees, Colombia now supplies only a tenth of global exports versus 18 percent around 1990, prompting fierce debate over what steps one of the country’s largest employment providers should take to regain share.

Kenya – it was fairly busy week in Nairobi as it was holding the AFCA (African fine coffees association), one of other traders Will was attending the show, so just waiting him to come back with the overview of it. You will hear about early next week.

Vietnam – the world’s largest robusta producer, exported 132,400 tonnes (2.2 million 60-kg bags) of coffee in January, a drop of 5.6 percent from a year earlier, the Vietnam Customs said on Thursday, below market expectations. The January volume brought Vietnam’s coffee export shipment in October 2014-January 2015, the first four months of the current 2014/2015 crop year, to 427,600 tonnes, up 2 percent from a year ago, based on government data.