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Coffee Market Report 9th November to 13th November 2015

COFFEE MARKET NEWS Week Ending: 13th Nov 2015




12th Nov
























Dearer Robusta? Drought in southeastern Brazil and El Nino in Indonesia will damage 2015/16 Robusta coffee output and could drive world prices higher if the dry weather persists, although a big Vietnamese crop will compensate for some of the lost output in Brazil and Indonesia.


Favourable weather in Brazilian coffee regions again put pressure on coffee prices. Reports from Sintercafe in Costa Rica forecasted a potential for 60 million bags for Brazil’s 2016 harvest. Prices continued their downward trend and the December delivery contract reached a low of 111.60-levels not seen since December 2013-but settled at 112.15 cents per pound on Friday.


Volumes have fallen away in London this week with the market still focused on the heavy build of options into this month. Like the NYC, Friday’s close was the lowest of the week.


GBP/USD: Softer US data allowed sterling to strengthen. The expectation of a Federal Reserve interest rate hike in December, which initially strengthened the US Dollar, has declined, and the Dollar has slipped back accordingly

GBP/EUR: The Euro further weakened on the back of ECB comments suggesting further quantitative easing and/or lower interest rates are imminent.




Volcafe, the Swiss-based coffee division of commodity trade house ED&F Man, has made investments in China’s burgeoning coffee industry and said on Saturday that demand growth there, and in Asia in general, is not strong enough to outweigh growing output and support prices.

Keith Flury, head of coffee research at Volcafe, told attendees at the Sintercafe coffee conference that China’s coffee consumption will reach 3 million bags in 2025, up 126 percent from current levels. “Three million bags is not lighting anyone’s house on fire,” Flury said. “While we have a lot of hope for Asia to take over the mantle of demand for coffee, they are also producing more than they need.”

Flury said expectations he had heard from some industry players for China’s annual consumption to reach as many as 20 million bags in the next 10 years were “not realistic,” in part due to a slowdown in per capita economic growth in China, which is highly correlated with rising consumption.

However, continued growth in urbanization in China would drive consumption growth, he said.


The Ethiopia Commodity Exchange (ECX) has officially launched its IBM-enabled national traceability system, known as eATTS. With numerous industry partners in the large-volume green coffee trading and buying segment, as well as collaboration with USAID, the $4.5 million (USD) program is rolling out in pilot format with this year’s harvest season. You can read more here. It is expected that there will be a slight crop decline in Sidamo and Yirgacheffe but a good harvest in Limu and Welega. The north of the country is experiencing a drought that has the potential to become the worst in decades.


Intermittent rains still occurring, weather has been more volatile than normal this year. That said, extra prime qualities are reported to be good.


India’s coffee production will not set another record like last season, but that will not prevent inventories rising to an all-time high. The USDA bureau estimated Indian coffee output in 2015-16 at 5.3m bags, down on the record 5.4m bags at which the Coffee Board of India pegs last season’s harvest. Nonetheless, it forecast India’s Coffee inventories ending the season at 2.78m bags, a rise of 90,000 bags year on year, and the highest on data going back to the 1960s, reflecting ideas of exports remaining below highs reached early in the decade.

“Exports in 2014-15 have been much lower than last year,” the bureau said, flagging a “slowdown” blamed on a cut to export incentives offered by the Vishesh Krishi Gram Udyog Yojana (VKGUY) programme. In addition to this, domestic coffee prices, while down some 20% year on year for Arabica beans, are “higher than ICE futures, making exports less competitive”.

In other news…

Cup North: We sponsored and had a stand at the Manchester coffee festival which was very well attended by roasters from all over the UK!