Therefore the combined exports from Brazil for the month of November were 217,702 bags or 6.91% higher than the same month last year, at a total of 3,366,826 bags. In terms of value these exports for the month of November were 125.8 million U.S. dollars or 20.16% lower than the same month last year, at a total of 498.3 million U.S. dollars. However in terms of the presently soft Brazil Real, the value of these exports in terms of domestic currency still remain a positive factor and allow for the Brazil coffee farmers to retain some degree of profitability from their coffee sales.

During the same announcement, the Brazil Coffee Exporters Association have forecast that with the exports for the year so far and with the countries weak currency having assisted to encourage active export selling, that the annual coffee exports for 2015 might possibly exceed the 36.3 million bags that were exported last year. One might comment however that included within these exports were relatively high volumes of conilon robusta coffee stocks that have assisted to fill the gap within the consumer markets that has been caused by the internal market price resistance within Vietnam, which has resulted in significantly lower robusta coffee exports from Vietnam this year and likewise, the significant rise in Vietnam stocks.

However with the prospects for a smaller conilon robusta coffee production in the coming year, one might expect that it shall similarly reduce exports of Brazil robusta coffees and a more modest overall export performance during the coming year. Making note that dedicated consumer market demand for Brazil coffees is more related to the Brazil arabica coffees that make up for a significant percentage of the blends within the southern European, Scandinavian and Japanese markets, with true demand for Brazil coffees being closer to 32 million bags per annum, rather than the volumes that have been exported over the past two years. To make one estimate in terms of assessing deficit or surplus crops in Brazil that the more accurate demand for Brazil domestic and export consumption would be something in the order of 52 million to 53 million per annum, which is a figure less than most of the early forecasts for the next 2016 new Brazil crop.

The Agricultural Ministry in Vietnam is reported to have assessed that with the relatively soft robusta coffee prices during this year that approximately 30,000 hectares of coffee farm land have been cut back and replaced with more profitable crops, which would probably account for approximately 5% of the land under coffee. This would therefore not a significant dip in coffee producing land for the country and with most probably such farms that have been cut down related to those with lower yielding aged trees that were due anyhow to be replanted, it is unlikely to do much damage to the Vietnam coffee export potential in the coming years. It is however an indication that perhaps Vietnam with a new crop now peaking and forecast to be close to 29 million bags, is perhaps due to settle back a little in the coming years in terms of world coffee market supply and share. But there is nevertheless in terms of Asian production, still the prospects for rising supply from the neighbouring countries such as Laos and Myanmar.

The March on March contracts arbitrage between the markets broadened yesterday, to register this at 56.27 usc/Lb., while this equates to a 44.38% price discount for the London robusta coffee market. This arbitrage remaining relatively attractive to roasters in comparison to arabica coffee prices, but is perhaps due to widen further in time and when Vietnam stocks start to impact in more volume upon the fortunes of the London market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to remain unchanged yesterday; to register these stocks at 1,817,523 bags. There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 0 bags.

The Certified Robusta coffee stocks held against the London market were seen to decline by 333 bags on Tuesday 8th. December; to see these stocks registered at 3,328,833 bags.

The U.S. dollar lost a little weight yesterday and this has assisted for a degree of buoyancy within many commodity markets yesterday, to see the overall macro commodity index take a more positive stance for the day. The Sugar, Cocoa, New York arabica Coffee, Cotton, Copper, Orange Juice, Wheat, Gold, Silver and Platinum markets had a day of buoyancy, while the Oil, Natural Gas, London robusta Coffee, Corn and Soybean markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.74% higher to see this Index registered at 380.80. The day starts with the U.S. Dollar steady in early trade and trading at 1.517 to Sterling and 1.100 to the Euro, while North Sea Oil is showing a degree of buoyancy in early trade and is selling at 39.00 per barrel.

The London market started the day yesterday on a marginally softer note, while the New York market started with early buoyancy and with both markets taking this track into the afternoon trade, when the London market recovered back to par and the New York market maintained its positive stance. Trade within both markets was however lacklustre and thin in nature for most of the day and the markets took an erratic track for the rest of the day, with the New York market maintaining its positive stance and the London market bouncing around mostly below par. The London market ended the day on a modestly negative note but having recovered 80% of its earlier losses of the day on the close, while the New York market ended the day on a positive note and with 64% of the earlier gains of the day intact. This relatively positive close is likely to inspire some degree of modest confidence and one might expect to see with the weaker U.S. dollar in play and the marginally firmer nature of the Brazil Reais, a follow through steady start for early trade today against the prices set yesterday, as follows:

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

JAN 1526 – 5                                            DEC     123.85 + 1.60
MAR 1555 – 2                                          MAR    126.80 + 1.60
MAY 1582 – 2                                          MAY   128.90 + 1.55
JUL 1606 – 3                                              JUL    130.85 + 1.55
SEP 1626 – 4                                             SEP     132.70 + 1.50
NOV 1646 – 3                                           DEC    135.25 + 1.40
JAN 1664 – 1                                            MAR   137.75 + 1.30
MAR 1682 – 1                                          MAY   139.50 + 1.25
MAY 1705 unch                                         JUL   141.15 + 1.30
JUL 1737 unch                                           SEP   142.60 + 1.40