Market Briefing: Coffee – 06 June 2021
– Hawaii’s coffee production dropped 15% to 22.7 million pounds in 2021
– Peru’s coffee exports fall to 5-year low in 2020/21 to 3.6 million bags
– Arabica coffee futures retreat 4½-year highs
Production
Hawaii’s coffee production dropped 15% to 22.7 million pounds, or 171,723 60-kg bags, in the 2020/21 season, from 26.8 million pounds (203,209 bags) the season before and 26.4 million in 2018/19. Farmers have struggled with the recent spread of a potentially devastating virus throughout the island, according to the US Department of Agriculture’s National Agricultural Statistics Service. Bearing acreage was estimated at 6,800, down 1% from the previous year. The average yield was 3,510 pounds per acre, down 442 pounds from the previous year.
Demand
Peru’s coffee exports fell to five-year low in 2020/21 to 3.6 million bags of coffee. There was a drop in exports to almost all of Peru’s top customers except France and Italy. Germany was been the single-largest importer of Peruvian green coffee until 2015/16; it has since been overtaken by the US. Germany’s imports of Peruvian coffee in 2020/21 retreated to a more than two-decade low of 786,444 bags from 840,466 a year earlier. The US imported 892,980 60-kg bags of green coffee in 2020/21, down from 964,809 bags the year before.
Trade
Anti-government protests in Colombia have blocked exports of around 800,000 60-kg bags of coffee in May, according to a projection from the National Federation of Coffee Growers (Fedecafe).
Ivory Coast’s coffee bean exports in April 2021 collapsed to 382 tonnes (6,367 60-kg bags) from 4,872 tonnes (81,200 bags) in the previous month and 6,588 tonnes (109,800 bags) in the same month last year, provisional port data showed.
Brazil exported 3.169 million 60-kg bags of green coffee in May 2021, down from 3.595 million in the same month last year, government data indicated.
Price
Arabica coffee futures have been retreating, with the New York contract suffering sizeable losses by Thursday (June 3), as the market moves away from the 4½-year high of 166.75 cents per pound set on Tuesday. The benchmark contract for July delivery ended down 3.55 cents at 157.60 cents per pound, close to the lower end of the day’s rather wide 156.10-162.10 trading range. Market participants said the pull-back was not unexpected, as the market had become technically overbought after the recent strong advance, but it remains supported by dry conditions in Brazil and delays to exports from Colombia. Second-month September shed 3.50 cents to 159.65 cents per pound, while the back months finished with losses between 2.80 and 3.50 cents.
(IHSmarkit)
