COFFEE MARKETS
Export volumes fall as major producers reduce volumes Arabica will be required to supply the local market, potentially reducing availability 250 over the next year. In Vietnam, exports were estimated to be lower by 5.9% to 1.65 million bags. 200 This would suggest that significant stocks of coffee are building up in Vietnam, which 150 could help alleviate supply issues over the next year. In Colombia, exports dropped by nearly 100 60% to just 489,000 bags as a truck drivers strike disrupted the internal movement of 50 coffee. However, following the resolution of this strike, it is expected that the flow of exports should have resumed in August, Colombian Milds Other Milds Brazilian Naturals Robustas although a lack of rainfall due to El Niño is © 2016 International Coffee Organization (www.ico.org) expected to reduce output towards the end of the year. WORLD Export volumes coffee of the green Arabica 300,000 bags Robusta–prices were relativelyofstable overinthe million course of month, with and the monthly average Indonesia has been recording theincreasing month of dramatically, of roasted and Arabica soluble and less than 40,000 for July the 6threduced consecutive month. Prices of the three group indicators all fell consistently lower exports since the recording thetolowest monthlytheir volume since supply bagsoutlook. of Robusta. This was due narrowed to low compared July, reflecting respective The arbitrage therefore beginning of its crop year in April, as the October withitshipments totallinghigh justcompared domestic stocks thatofwere nearly exhausted slightly,2011, although remains relatively to the course the previous year. 2016/17 crop also seems to have been badly 7.7 million bags, 22% less than the volumes in Brazil, with the 2016/17 crop due to affected by El Niño. Total exports for the lastGraph year,3:according to a report byand the start to 30-day marketvolatility shortly. However, Arbitrage between New York Graphcoming 4: Rolling of the ICO first third of its crop year (April to July) are markets (ICO). International London Coffee futures Organisation concerns over the Robusta composite indicatorsupply, price which is down by over 45% to 1.5 million bags. Brazilian exports were 33.1% lower than mostly 140 15%used for domestic consumption, and last year to 1.9 million bags, comprising 1.6 it is therefore likely that some lower grade US cents/lb
Graph 2: ICO group indicator daily prices
100 80
Volatility (%)
US cents/lb
120
10%
NETWORK 60
5%
40 20
© 2016 International Coffee Organization (www.ico.org)
0%
© 2016 International Coffee Organization (www.ico.org)
July saw a dramatic reduction in monthly export volumes, with #OpportuntiesInBreakfastCereals
shipments totalling just 7.7 million bags, 22% less than the same month last year and the lowest monthly volume since October 2011. Several major producers recorded lower exports, although for slightly different David reasons.Kamau, the CEO at leading breakfast
cereals manufacturer, Proctor & Allan, was In Brazil, exports were 33.1% lower than last year on 1.9 million bags, comprising 1.6 million one of the key speakers at AFMASS Eastern & of green Arabica (down -26.3%), 300,000 bags of roasted and soluble (-10.3%) and less than Central Africa 2016. 40,000 bags of Robusta (-90.9%). This reinforces the idea that domestic stocks are nearly
exhausted in Brazil, with the 2016/17 crop due to start coming to market shortly. However,
You can join the top business leaders like 2 Coffee Market Report – August 2016 Kamau at the next edition of the event to learn of the key trends and opportunities in Africa’s industry. Contact us today for great speaking and panel discussion opportunities at next year’s event
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MILLING & BAKING AFRICA | SEPTEMBER/OCTOBER 2016
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