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W11: Weekly Coffee & Tea Update
Global
Still Supported by Concerns About Global Supply, Coffee Extends Gains This Friday
This past Friday, March 17, the New York Stock Exchange's primary contracts saw increases thanks to the opening of the Arabica coffee futures market. May/23 was up 130 points, traded at 181.35 cents/lbp, July/23 was up 125 points, traded at 180 cents/lbp, September/23 was up by 110 points, quoted at 177.95 cents/lbp.
Coffee Market Works With Falls This Tuesday Afternoon in the US and UK
Arabica coffee futures contracts traded with devaluations on the New York Stock Exchange (Ice Futures US) this Tuesday afternoon (14), where they dropped between 265 and 280 points. On the London Stock Exchange, discussions take place while there is a trading session. Only March/23, which was up 95 points and is currently priced at 183.20 cents/lbp, produced gains. The price of the May/23 contract, which has a loss of 275 points, is 176.45 cents/lbp. When it came to July/23, it operated with a 265-point devaluation and was priced at 175.60 cents/lbp, while September/23 operated with a 280-point devaluation and was priced at 173.70 cents/lbp.
Colombia Advances at a Slow Pace, and the US and UK Markets Have a New Concern With Supply
The New York Stock Exchange's Arabica coffee futures market saw price increases to start W11. While the producer waits for improved rates and the buyer waits to close new deals, negotiations are still at a standstill. For May/23, the price increased by 140 points to 179.20 cents/lbp; for July/23, the price increased by 115 points to 178.25 cents/lbp; for September/23, the price increased by 105 points to 176.50 cents/lbp; and December/23, the price increased by 95 points to 174.65 cents/lbp. According to the National Federation of Coffee Growers, excessive rain and cloudy days will reduce harvests, causing Colombia, the second-largest exporter of Arabica coffee in the world, to see a -4.8% decline in production to 5M bags in the first half of 2023.
Brazil
Lower Supply Due to Crop Failure Limits Brazil’s Coffee Exports in the 2022/23 Season
Brazilian coffee exports have been limited this season due to the crop failure in Brazil in the 2022/23 growing season as a result of weather problems (frosts and excessive rains), as well as the reality that domestic prices have been higher than export values. On the other side, agents predict that exports will increase in the 2023/24 season. According to statistics from Cecafé, Brazil exported 2.4M bags of coffee in February, down from 3.6M on February/22, a drop of 33.3%. Shipments for the current season (July/22 through February/23) reached 24.6M bags, a 7.8% decrease from the 26.7M exported during the same time period last year.
United States
Coffee Has Financial Pressure Week and Ends With Devaluation in W11
This Friday, March 17, the New York Stock Exchange saw a depreciation in the Arabica coffee futures market. May/23 saw a decline of 345 points worth 176.60 cents/lbp; July/23 saw a decline of 330 points worth 175.45 cents per pound; and September/23 saw a decline of 310 points worth 173.75 cents per pound. As it had been all week, the uncertainty surrounding the American data had an impact on coffee prices.
With an Eye on the Macro, Coffee Follows the Day of Lows in New York in the US and London in UK
This Wednesday, March 15, saw the start of trade in the Arabica coffee futures market, along with a devaluation of the key contracts on the New York Stock Exchange. The market keeps its attention on the macro picture and the uncertainty brought on by the most recent collapse of US banks while also tracking the losses of other commodities. May/23 was down 375 points traded at 171.70 cents/lbp, July/23 was down 365 points at 171.05 cents/lbp, September/23 was down 340 points at 169.70 cents/lbp, and December/23 recorded a low of 330 points at 168 cents/lbp.
On the New York Stock Exchange, arabica coffee futures trading for this Tuesday, March 14, closed the day with losses of between 155 and 230 points. The main contracts for Conilon coffee prices also saw losses at the close of the trading day. While the May/23 contract concluded with a drop of 375 points and is priced at 175.45 cents/lbp, the March/23 contract ended with a decline of 230 points. In the case of July/23, it resulted in a 355-point depreciation and was priced at 174.70 cents/lbp.
With Slow Trading, Coffee Starts Week With Losses in New York
Arabica coffee futures trading on the New York Stock Exchange began W11 with a devaluation for the major contracts. The market concluded the week with a weekly low despite the fact that only a limited amount of goods were exported from Brazil and Colombia in W10. The industry is still keeping an eye on how Brazilian crops are growing in preparation for the 2023 harvest. Since the producer waits for better pricing and the buyer waits to finalise new deals, negotiations are still at a standstill. May/23 was down 80 points, trading at 177 cents/lbp, July/23 was down 90 points, worth 175.15 cents/lbp, September/23 was down by 190 points, worth 171.80 cents/lbp.
Vietnam
Coffee price in Vietnam today, March 18, 2023: A sharp drop of USD 0.034/kg
Compared to yesterday, the price of coffee on the domestic market fell by USD 0.034/kg today, March 18. In particular, the cost of Lam Dong coffee is currently USD 1.96/kg (VND 46,000/kg) in the three districts of Di Linh, Bao Loc, and Lam Ha. Today's coffee price in Dak Lak's Cu M'gar district was USD 1.97/kg (46,400 VND/kg). The price of coffee today in Ea H'leo and Buon Ho districts is USD 1.97/kg (46,300 VND/kg).
Vietnamese Coffee With the Goal of Conquering the World Market
Even though the total export volume in the first two months of 2023 was just 342,352MT, cumulative exports experienced a reduction with a decline of 7.8% YoY. Vietnam's February export rebound is anticipated to increase the market's existing supply, especially as other countries such as Indonesia and Brazil are also preparing to supply the new crop year. As of this morning, the price of green coffee beans in the Central Highlands and Southern Provinces jumped significantly by USD 0.021/kg on the domestic market, following the general trend of global pricing.
Agricultural Product Prices on March 17, 2023 in Vietnam: Coffee Decreased by USD 0.0085/kg
On March 17, the domestic coffee price in the provinces of the Central Highlands decreased by USD 0.0085/kg. In particular, the cost of green coffee beans (also known as fresh green coffee) is currently between USD 1.96-1.97/kg in Lam Dong province's districts of Bao Loc, Di Linh, and Lam Ha.
Coffee and Pepper Markets on March 16
Coffee In the domestic market, the price of coffee simultaneously lost another 200 VND/kg. Lam Dong has the lowest price; Dak Lak closed the highest level; Gia Lai is priced at 46,600 VND/kg and Dak Nong is at 46,500 VND/kg. In the world market, the price of robusta for May 2023 on the London floor had a series of consecutive declines with a decrease of 11 USD, or 0.53%, to 2,069 USD/ton – the lowest level in a month.
Coffee and Peppercorn Prices on March 15, 2023
Particularly, coffee costs USD 1.98/kg (46,500 VND/kg) in the Di Linh area of Lam Dong. Prices for coffee in Bao Loc (Lam Dong) and Lam Ha (Lam Dong) are USD 1.97/kg (46,400 VND/kg). The current price of coffee in Dak Lak's Cu M'gar district is USD 1.99/kg (46,900 VND/kg). Coffee is currently available for buy in the Ea H'leo area of Buon Ho (Dak Lak) for USD 1.99/kg (46800 VND/kg). The cost of coffee is currently USD 1.99/kg (46,800 VND/kg) in Pleiku (Gia Lai) and La Grai (Gia Lai).
Arabica Coffee and Peppercorn Prices on March 14, 2023
On March 14, coffee prices simultaneously decreased by USD 0.013/kg (300 VND/kg). Specifically, coffee costs USD 2.00/kg (47,100 VND/kg) in the Di Linh district of Lam Dong. Prices for coffee in Bao Loc (Lam Dong) and Lam Ha (Lam Dong) are USD 2.00/kg (47,000 VND/kg). The current price of coffee in Dak Lak's Cu M'gar district is USD 2.02/kg (47,500 VND/kg). The current price of coffee in Ea H'leo district (Dak Lak), Buon Ho (Dak Lak), is USD 2.01/kg (47,400 VND/kg).
In Vietnam, Agricultural Prices on March 13, 2023 Had Coffee and Pepper Remain at a High Level
Specifically, coffee costs USD 2.01/kg (47,400 VND/kg) in the Di Linh district of Lam Dong. Prices for coffee in Bao Loc (Lam Dong) and Lam Ha (Lam Dong) are USD 2.01/kg (47,300 VND/kg). The current price of coffee in Dak Lak's Cu M'gar district is USD 2.03/kg (47,800 VND/kg). The cost of coffee today in Ea H'leo district of Buon Ho (Dak Lak) was USD 2.03/kg (47,700 VND/kg). The cost of coffee is currently USD 2.03/kg (47,700 VND/kg) in Pleiku (Gia Lai) and La Grai (Gia Lai). The cost is less expensive in Chu Prong district (Gia Lai), where it costs USD 2.02/kg (47,600 VND/kg).
Indonesia
Low Supply of the Green Coffee Beans in Indonesia for Q1 Due to Weather Conditions
Green coffee beans from Indonesian farmers in Southern Sumatera are still in short supply till mid-March 2023. The Sumatran city of Lampung's coffee producers forecast that the first quarter of 2023 would see less farmer-produced coffee than the first quarter of 2022. It is caused by weather patterns with consistent, heavy rain from December 2022 through W11. The coffee supply in the Southern Sumatera region is predicted to decrease by 30% YoY in Q1 of 2023 if the current weather pattern persists.
Colombia
The uncertainty surrounding the world's supply of coffee continues to cause significant volatility on the New York Stock Exchange despite Brazil's return on the rainy season. Now that La Niña has ended, the focus is shifting to the potential for an El Niño in the second half. The National Federation of Coffee Growers (FNC) reports that after three years of continuous rains punishing the coffee plantations, producers in Colombia are awaiting confirmation of the climatic phenomenon. However, at first, the change in rainfall patterns may be advantageous for the nation.
Australia
Climate Change Increasing Systemic Shocks’ to Coffee Production
Climate change will likely result in growing and "ongoing systemic shocks" to the world's coffee industry's ability to produce coffee. In other words, more coffee-producing regions are simultaneously experiencing the negative effects of climate change. The study pays particular attention to the effects of El Niño, La Niña , and the Madden-Julian oscillation (MJO) on tropical regions around the world where coffee is grown. Coffee production should prepare for ongoing systemic shocks in response to spatially compounding climate hazards since climate change projections indicate a continued rise in temperatures in the tropics is likely.
Tanzania
New Coffee Auction System Boosted Coffee Prices in Kagera Region, Tanzania
Tanzanian coffee auction prices were boosted from the 2021/22 season at USD 0.68/kg and improved to USD 0.87/kg during the 2022/23 season following the government’s decision of giving the Tanzania Coffee Board (TCB) the mandate to supervise coffee auctions, previously supervised by the cooperative unions, something which denied companies access to buying coffee and limited trustworthiness of the coffee auctions. According to the Tanzania Coffee Industry Development Strategy 2021, the auction system has multiple advantages, including better prices and export control. An estimated 50K MT of coffee was put for auctions in the region for the 2022/23 season.
Kenya
Farmers Borrow USD 529,950 From Coffee Fund in 2 Months
One of the highest absorption rates since the fund's inception three years ago was achieved in the last two months when farmers received low-cost loans from the revolving coffee cherry fund totaling USD 529,950. The increase in usage, according to Co-operatives Cabinet Secretary Simon Chelugui, is due to greater public awareness of the funds and the easing of the strict criteria that had previously prevented farmers from accessing them. The amount collected in January and February, USD 529,000, was higher than the amount absorbed by farmers during the fiscal year 2020/21.
Tea
Kenya
Kenya Expands Its Bulk Tea and Coffee Market to Slovakia
Kenya has entered into a bilateral agreement with Slovakia to allow its tea and coffee export. This is good news to Kenyan farmers and processors of black tea and coffee beans as they seek to expand their export destinations away from their traditional markets of Pakistan and Egypt, which are currently facing hard economic times occasioned by an acute shortage of US dollars currency.
