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

COFFEE MARKET NEWS Week Ending: 13th March 2015

9th Mar

10th Mar 11th Mar

12th Mar

13th Mar

NYC

137.00

135.05

131.75

132.20

129.80

LIFFE

1871

1856

1820

1768

1708

GBP / USD

1.508

1.508

1.500

1.487

1.477

 

 

 

 

 

Commentary

Another negative week for the terminals this week as increased dollar strength (or rather further Real weakness in Brazil) has led to continued negativity. With no macro news to push the market higher, we continue on the bearish path – even though we sit in over sold territory.

London – The negative sentiment has flowed in to London pushing levels down to the low 1700’s!

GBP / USD The pound has come under pressure from the USD for the past couple of weeks, sitting comfortably under the 1.50 level for some time now.

GBP/EURO with continued fears of a Greek Exit / new bailout for Greece, the Euro has taken a pounding this week and is at 7 year lows!

Origins

Brazil – Could the crop be sold already? For the larger screen 17/18 grades it could look like a possibility! Finding offers for these grades is proving difficult, with only the smaller 14/16 or 16+ looking available. The perils of a drought riddled crop = small beans. All other grades seem aplenty, although at firm differentials – remarkable given that the currency weakness in Brazil has more than compensated for the fall in New York – resulting in producers realising similar price levels to last year.

Kenya – With still good volumes available in Kenya at the weekly auctions, prices have been on the rise – with the end in sight, and the potential for a long off cycle before coffee flows again for the Fly Crop, exporters seem to be filling their boots – either an apparent tactic to go long in anticipation of future demand, or that some still haven’t covered all their shorts, and are getting a little nervous…..

Colombia / Honduras / Guatemala – All suffering similar fates – external business is grinding to a halt. Coffee remains in the hands of producers / middlemen, and exporters unable to replace the shipments due to firm asking prices. Colombia differentials now in double digits, Guatemala exports are 25% lower with most of that coffee still in the hands of intermediaries. Honduras also seeing firmer asking prices or no offers at all as producers wait for better terminal market prices.

Ethiopia – There are rumours that the country is running out of USD – in part due to the lack of coffee exports, earning the cherished foreign currency. It seems government meddling has dropped a clanger on this one – informing producers the price of coffee will be high on the back of ill informed decisions based on the Brazilian drought has led co operatives to ‘overpay’ for the cherry. Lower NYC prices have made the FOB outright prices of Ethiopian coffee incredibly high, and Roasters are simply not putting up with it! Many seem sidelined while they wait for the situation to rectify itself. The Government itself is now trying to push exporters to sell coffee – the stalemate continues.