Weekly Market Report 28 June - 1st July
COFFEE MARKET NEWS 14th – 18th June 2010
Futures Markets:
Arabica : coffee futures had a roller coaster week falling on Tuesday as all commodity and the major equity markets experienced a sharp drop. This was caused by concerns over China’s economic slowdown and a decline in consumer confidence in the US. The technical situation remains overbought hence anticipation of a corrective move down. The strong US Dollar added to the bearish sentiment. According to Safras & Mercado, 32% of the Brazilian Arabica crop has been picked as of June 23rd. Temperatures have been normal during this season. There are reports of a cold front approaching the coffee areas on July 12th, which will be accompanied by rains (this is along range forecast hence some uncertainty).
Robusta : Although the Robusta market closed lower on Friday.Robusta coffee hit a 15-month high (since Dec 08) supported by a drawdown in stock levels. Dealers say the coffee market remains vulnerable to fund activity, attributing the recent rally to fund buying rather than any fundamental change in the supply and demand situation. In June Robusta prices rose by $357 per metric tonne.
Currency : The Pound hit a fresh 19-month high against the Euro as the 16-nation currency came under renewed pressure. The pound touched the 1.2327 Euro level, its highest level since the immediate aftermath of the financial crisis in November 2008. Markets are concerned ahead of a deadline this week for European banks to repay loans taken out a year ago at low interest rates. Against the Dollar, however, the pound remains choppy.
Futures and Currency close levels:
|
|
Monday
|
Tuesday
|
Wednesday
|
Thursday
|
Friday
|
|
NY Sep-10 c/lb
|
168.10
|
163.15
|
165.85
|
168.25
|
164.35
|
|
Lon Sep-10 $/t
|
1710
|
1715
|
1731
|
1766
|
1750
|
|
£/$
|
1.5108
|
1.4952
|
1.4889
|
1.4952
|
1.5179
|
Physical Markets:
Brazil : exports in June reached 1.64 million bags.
Colombia : as New York rallied some coffee appeared (last of the mid crop) and differentials softened to the +50 to 60 range.
Peru : DRW will be introducing ‘Uchunari’ coffee, beans eaten by wild civet cats and then collected and processed.
Mexico : Washed EP now in store. Hurricanes threatening the Caribbean costs over the weekend.
Honduras : exporters defaulting, no coffee available now until November.
Guatemala, Costa Rica, El Salvador & Nicaragua : Now out of season
India : coffee exports jumped over 42 percent to 197,693 tonnes between Oct. 1, 2009 and June 29, 2010, the state-run Coffee Board said on its website on Wednesday. India sold 20.11 billion rupees worth of coffee during the period, up from 15.31 billion rupees a year ago, data showed.
Tanzania : New Oldiani Estate (Kiran and Kongoni) coffees en route to the Port eta UK late August.
Kenya : Coffee Board has reduced crop estimates to 50,000 tonnes down from 56,000 due to a cold snap that has affected flowering. Although recent record prices may have boosted husbandry and flow of inputs (fertiliser etc) so output may remain even in our shipper’s opinion.
Rwanda : FAIRTRADEexporters defaulting, as greed overtakes long term commercial relationships.
Uganda : Exporters pumping out Robusta although differentials remain firm as demand keeps up with supply.
Indonesia : We are booking new season coffees, prices remain firm.
From London on a warm but overcast summer morning.
Alok VOHORA