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Breaking down the global coffee market-September 22nd to 26th
Our latest coffee market report looks at the week from September 22nd to 26th, analysing the prices of beans, as well as futures and currency levels around the world.
This week, we analysed the goings-on in some of the world's biggest coffee-growing countries, including Brazil, Kenya, Uganda, Vietnam, Nicaragua and Tanzania, seeing how their harvests were performing and exactly how many beans they were shipping out to traders like us at DR Wakefield.
Currency values
With the previous week seeing the vote on Scottish independence taking place, dramatic fluctuations were seen in the value of the pound sterling. It might have been expected that following the announcement of the 'no' result, the next week may not experience any significant changes.
However, the pound to euro conversion rate reached a 26-month high during the week, creeping up to €1.2845.
This is in contrast to the euro to dollar rate, which dropped to its lowest level for 22 months, with a value of $1.2697.
Pound to dollar conversions also fell, coming in at just $1.6274.
The value of Arabica beans fluctuated up and down throughout the week, with these being fairly significant in some cases, with rises and falls of eight cents or more. The five-day trading period ended with the price of this coffee variety being an average of eight cents higher than at the beginning of the week.
In a similar fashion to the previous Monday to Friday, the price of Robusta beans went up and down in line with New York market values, but in not quite as dramatic a way as the week earlier.
Coffee volumes
The Brazilian market was largely dictated by the weather throughout the week-long trading period, with anticipation for rain to arrive in the country's main coffee-growing regions, which have been somewhat damaged due to droughts.
However, it is hoped that the arrival of this wetter weather will trigger the flowering of next year's harvest, providing some much-needed growth for the country's coffee plants.
Kenya is also awaiting its next harvest, with beans expected to be yielded some time in November or December, ready for shipping overseas from January 2015. The week did see the price of some of the East African country's top coffee fall in value at auction by around five per cent, but with the main harvest still yet to come in, only time will tell how prices for those beans will fare.
Elsewhere in the East African bean basket, Tanzania saw 18,648 of the 19,576 bags it offered at auction purchased, showing that the country's coffee remains popular among traders. As the fourth-largest producer of Arabica beans in Africa, Tanzania experienced fluctuations in the value of its coffee throughout the week.
In Uganda, figures have now been released detailing how many bags were sold in total during August, with 268,033 60 kg sacks shipped overseas, indicating a decrease from the 318,338 exported in the same month of the previous year.
Nicaragua also saw its exports fall in August, with a decline of 15.2 per cent being reported by Cetrex, which is the country's national export centre. Some 135,429 60 kg bags were shipped out of Nicaragua during the month, while the 2013-14 harvest season – which has now entered its final four weeks – has so far produced 1.624 million bags for the country. This marks a decrease of 11.9 per cent compared to the 2012-13 season.
Finally, Vietnam's coffee harvest is also expected to fall, continuing what appears to be something of a trend this season.
The vice-chairman of Vicofa, the country's coffee and cocoa association, Do Ha Nam explained to the International Coffee Organization that Vietnam's harvest is expected to decrease to around 25 million bags of beans this year.
Arabica and Robusta performance
As mentioned earlier, the values of both Arabica and Robusta beans fluctuated somewhat between September 22nd and 26th, potentially affecting the worth of the harvest in countries that specialise in producing just one of these varieties.
Despite the weekly – and sometimes even daily – fluctuations within the global coffee trading market, we at DR Wakefield like to keep a close eye on things to ensure we are providing our roasters and blenders with the best coffee at the right price.