RNY Market Watch: November Coffee C Market Price

Welcome to our November edition of RNY Market Watch! Andrew Blyth & Tom McLaughlin are here to provide you with all the insight on the November Coffee C Market Price.

The market has continued to be very volatile since our last report making new market lows week after week.  Looking back only 60 days, the market was trading above $2.30/lb on September 26. Then, with some positive news from Brazil, prices began to crack and traded down to $1.54/lb last week marking a 20-month low in the market.

Contributing Factors to the November Coffee C Market Price

Several factors help to explain this dramatic drop in prices.  A steady supply of coffee exports over the last couple of months from the world’s largest coffee producer, Brazil, has eased concerns about supply shortages. Add to this worries of a global recession brought on by inflation numbers not seen in 40 years. This could certainly affect demand as consumers limit trips to cafes and restaurants.

Another important factor recently has been the increase in ICE Certified* coffees in warehouses. The last 18 months saw the number of certified bags of coffee drop from 2.2 million bags to 380,000. The drop over this period was one reason coffee prices jumped higher and stayed over $2/lb for such a long time. However, in the last month, the number of certified bags has increased to 530,105. More importantly, there are another 543,512 bags pending grading to be certified. It is believed that most of this coffee is past-crop coffee sitting in warehouses in Europe. Regardless of the coffee type or storage location, an increase in certified stocks tells the market that the global supply of coffee is just fine.  

This doesn’t mean the coffee supply chain is problem free. Unfortunately, there are still some supply challenges. October coffee exports for Vietnam, Colombia, Honduras, and Guatemala were all lower on a year-over-year basis. Suffice it to say, we will continue to see price fluctuations for the foreseeable future.

Are your coffee needs covered?

For now, use this opportunity to extend the coverage of your more popular offerings. Make sure you have your share of good cupping Centrals to cover you through the lean first quarter. Good Guatemala and Costa Rica SHB’s will run short and demand for early deliveries in March or April will be high. Contact us and talk to your traders about what you’ll need to carry you through. We have lots of tools to assist with your forecasting needs.