The National Coffee Council in El Salvador have announced that the countries coffee exports for the just completed October 2015 to September 2016 coffee year were 101,615 bags or 17.32% lower than the same period in the previous coffee year, at a total of 485,046 bags.

This relatively dismal export performance on the part of El Salvador is contrary to the regional trend as the larger producers within the Central American producer bloc that include Honduras, Guatemala, Costa Rica and Nicaragua have all reported an improved export performance, for the just completed coffee year. While with the new crop harvest already starting within the lower altitude districts of the Central American producers, the forecasts are for overall improved crops and the resulting export potential, for this new October 2016 to September 2017 coffee year.

The Uganda Coffee Development Authority have reported that the countries coffee exports for the month of September were 77,366 bags or 27.02% lower than the same month last year, at a total of 208,956 bags. This weather-related dip in exports that has been a problem for the past few months, has contributed to the countries coffee exports for the just completed October 2015 to September 2016 coffee year to have been 4.05% lower than the previous coffee year, at a total of 3.32 million bags. While in terms of income, the earnings for the just completed coffee year were 20.24% lower than the previous coffee year, at a total of 327 million U.S. dollars.

State officials in Kenya have forecasted that the countries coffee production for the present calendar year is expected to be 4.4% higher than the previous year, at a total of 783,333 bags. This number is very much in line with the majority of trade and industry forecasts, but remains a modest figure for a country that historically used to produce over 2 million bags per annum.

There are however ongoing plans in place to promote coffee production in Kenya and with increased state and private extension service programs and including distribution of new disease resistant and higher yielding varieties of coffee seedlings, so as to inspire a recovery for the Kenya coffee industry. This is however a long-term program and weather issues aside; it is likely that Kenyan coffee production and exports shall remain at close to present modest levels for the medium term. The present delay in the start to the short rains in Kenya is a factor that is not assisting, albeit that forecasts remain for coffee production for the October 2016 to September 2017 coffee year to be close to 800,000 bags.

The March to March contracts arbitrage between the London and New York markets broadened yesterday, to register this at 69.20 usc/Lb., while this equates to a 41.21% price discount for the London robusta coffee market. This arbitrage is perhaps becoming a less attractive factor for the roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 1,038 bags yesterday; to register these stocks at 1,274,471 bags. There were meanwhile a larger in number 3,414 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 26,757 bags.

The Certified Robusta coffee stocks held against the London exchange were seen to decrease by 2,167 bags or 0.09% over the week of trade leading up to Monday 24th. October, to register these stocks at 2,284,333 bags, on the day.

The commodity markets had a mixed day yesterday, but despite the negative influences of the robusta nature of the U.S. dollar at present, the overall macro commodity index had a day of buoyancy. The New York arabica coffee market was the item of the day and with a sharp increase in value and the Cocoa, London robusta Coffee, Copper, Orange Juice, Wheat, Corn, Soybean, Gold and Silver markets had a day of buoyancy, while the Oil, Natural Gas, Sugar and Cotton markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.46% higher; to see this Index registered at 421.91. The day starts with the U.S. dollar near to steady and trading at 1.216 to Sterling and 1.088 to the Euro, while North Sea Oil is steady in early trade and trading at 48.45 per barrel.

The London market started the day yesterday on a steady note and soon started to register modest buoyancy and matched by buoyancy for the New York market and with both markets taking a positive track into the afternoon trade, when the New York market lacking much in the way of selling pressure and with a positive technical picture to inspire confidence, started to attract further support. The positive nature of the New York market triggered fund buy stops that accelerated the gains and with the London market starting on a positive upside track, behind the New York market that was heading towards two year highs for the day. The London market ended the day on a positive note and with 94.4% of the earlier gains of the day intact, while the New York market ended the day on a very positive note and with 97.7% of the earlier gains of the day intact. This close albeit that both markets are tending to look overbought is likely to inspire confidence, but one might expect to see some corrective profit taking and light price fixation selling coming into play for the New York market and perhaps a steady start for the London market for early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT       NEW YORK ARABICA USc/Lb.

NOV 2153 + 21                                 DEC 164.50 + 6.60
JAN 2178 + 17                                 MAR 167.90 + 6.50
MAR 2176 + 15                                MAY 170.00 + 6.35
MAY 2177 + 16                                  JUL 171.80 + 6.25
JUL 2174 + 12                                    SEP 173.40 + 6.10
SEP 2171 + 6                                     DEC 175.50 + 5.90
NOV 2174 + 8                                  MAR 177.20 + 5.70
JAN 2172 + 14                                  MAY 178.10 + 5.60
MAR 2181 + 16                                  JUL 178.95 + 5.50
MAY 2184 + 16                                  SEP 179.80 + 5.45