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Good morning and happy Monday one and all!

Buying would beget buying we said last week and that’s just what happened.  Sometimes the market just needs a little spark and once through upside resistance around 98.00 in Dec, the market used the next 2 days to have strong moves upward as short-term players were brought in to buy the market.  There was some overhead origin selling noted to offset it somewhat, though again, differentials for the most part, did not improve it was mostly pricing of already completed business.

Subsequent consolidation in the next few days could be expected as the market looked for further direction.  Major overhead resistance now resides around the 200 day ma 1.0650 or so.  Watch the macro plays in the next few days.  Attacks on Saudi Arabia’s oil production facilities has the oil market setting one day records for up moves.  Perhaps some of that could find its way into our market as well just a rising commodities tide tied to currency and related matters.

Vietnam reported exports in the first eight months of 2019 were estimated at 1.17 million tons worth about 2 billion USD, down 11.8 percent in volume and 21.4 percent in value over the same period of 2018, according to Agro Processing and Market Development Authority under the Ministry of Agriculture and Rural Development.

And on Friday, Sept 13 EMBRAPA (Brazil) issued the following press release, which we quote below:

– Brazilian participation in coffee exports was 32%, Vietnam 22% and Colombia 11% in the period from October 2018 to July 2019.

From October 2018 to July 2019, world exports of green coffee reached a physical volume equivalent to 99.86 million 60kg bags, representing 91.3% of the total volume of coffee exported in the world. Brazil, the largest producer, exporter and second largest consumer of coffee, exported the equivalent of 31.83 million bags of coffee, which represents a growth of 38.4% compared to the same period last year, and more than that. globally account for 31.9% of all green coffee exports in that period. Exports from Vietnam, the world’s second largest coffee producer and exporter, reached 22 million bags, representing 22% of the total. As for Colombia, the third largest producer and exporter, foreign sales increased by 7.1% and totaled 10.52 million bags exported, corresponding to 10,

As a result, if the ranking of the five largest green coffee exporting countries is established in the period under analysis, it is noted that Honduras ranks fourth, having sold 6.29 million bags, despite having reduced sales to the outside by 2.3%. And fifth, Uganda, which exported 3.6 million bags, even though it also experienced a 3.1% drop in exports. Finally, it should be noted that the main importing countries were the United States, followed by Germany, Belgium, Italy and Japan. And while the total volume sold to these five countries reached 32.48 million 60kg bags, which corresponded to 32.5% of all green coffee exports in the period.

With regard to the world coffee exports scenario, only in these ten months analyzed, as mentioned above, sales of green coffee accounted for 91.3% of total exports, with a volume of 99.86 million 60kg bags. Despite this significant percentage, it should be noted that this performance is slightly below that observed three decades ago, when green coffee exports accounted for about 95% of total exports, thus indicating that much of the value added continues to be implemented. in importing countries. In contrast, exports of instant coffee totaled 9.06 million bags and accounted for 8.3% of the total, while those of roasted coffee reached only 487.08 bags, equivalent to 0.4% of exports.

The data and statistical figures on the performance of world coffee growing that allowed these analyzes to be carried out were based on the ICO Coffee Market Report August 2019, which is produced and released monthly. This Report is available in full for consultation at the Coffee Observatory of the Research Coffee Consortium, coordinated by Embrapa Cafe. It should be clarified that the coffee year for the ICO covers the period from October to September, and that the coffees are classified according to their origin, in the Colombian Mild, Other Mild, Brazilian Natural and Robust types.

According to the aforementioned Report, ‘Brazilian Natural’ type coffees contributed to this positive export performance, which increased by 27.6% when exporting 35.08 million bags in the period from October 2018 to July 2019. In addition, ‘Colombian Mild’ coffees increased their foreign sales by 7.6% to 12.59 million bags shipped. And ‘Robustas’ coffees, which also had a 6.9% increase in exports, reaching a physical volume of 38.90 million bags. However, exports from the ‘Other Milds’ reached 22.83 million bags, a decrease of 3.7% compared to the volume exported in the previous period.

As for roasted coffee exports, according to the figures of the August 2019 Coffee Market Report, among the exporting countries, Mexico, Colombia, Vietnam, Brazil and the Dominican Republic, in this order, were the largest exporters of this type of industrialized coffee. Total volume accounted for 92.7% of roasted coffee exports in the first ten months of coffee year 2018-2019. Mexico exported the equivalent of a volume of 183.83 thousand bags of roasted coffee and Colombia 124.56 thousand bags.

Vietnam’s roasted coffee exports fell 19.8% to 116.40 thousand bags exported, and Brazil, which exported 15.87 thousand bags, had a reduction of 1.1%. Those in the Dominican Republic, however, increased 45.9% to 11.05 thousand bags. The United States was the main destination for roasted coffee, accounting for about 60% of imports in the first ten months of coffee year 2018-2019.

Brazil also stood out in this period as the largest exporter of instant coffee by selling abroad the equivalent of 3.29 million 60kg bags, a volume that represented a growth of 10.7% over the same period last year. India also exported 1.59 million bags of this type of coffee, 10.3% lower compared to the first ten months of coffee year 2017-2018.

In the same context, Vietnam’s instant coffee exports grew 48% to 1.06 million bags, Indonesia’s exports fell 20.5% to 990.28 bags, and finally Mexico’s exported instant coffee had reduction of 6.5%, with 674.99 thousand bags, also compared to the previous period. On the side of importers, the United States, the Russian Federation, the Philippines, Germany and Poland were the main destinations for soluble exports from October 2018 to July 2019.

We have some Colombia and Guatemala FTO either just arrived or just in the warehouse (depending on when you read this).  We have an RFA Certified Sumatra Mandheling Gr 1 DP just arrived on Saturday, not yet stripped by Continental, and a container of Vietnam WP that arrived on Sunday.  We have some Sidamo Gr 4 in the warehouse and a really nice lot, we bought because we loved the PSS, arriving on the 23rd.  Of course we have our usual standards, New Guinea Sigri AA, Sumatra Mandheling both FTO and conventional, Costa Rica Tarrazu “La Pastora”, Guatemala Antigua “Pastoral” and conventional SHB,  RFA Brazil 2/3 and Brazil 2/3 Scr 17/18, Colombia EP, Supremo and RFA EP, Honduras Marcala FTO,  and some very nice Kenya AA and AB, along with Panama Boquete “Indian Baru”.  We’d love to send you some samples of these really great coffees.


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The Armenia Team