Good morning all and hope everybody had a great holiday break and if you’re still on break, the rest of us envy you.
The market’s holiday-shortened week began with a dramatic 10 cent drop and Monday, and subsequently bobbed back close to where it started before closing the week down a few cents on Thursday. The open interest declined slightly as long speculative positions were covered on that Monday. Roasters took advantage to add some priced coverage at the apparent bargain price in the mid-220’s. Certified stocks, which we should stress are a small subset of the overall stock position, did decline on the week with NY stocks (arabicas) down about 7,000 bags and Robustas down more dramatically, by about 40,000 bags. Most of the certified stock action takes place in Europe (Antwerp specifically) as the warehouses there have aggressively gone after the certified stock storage business….creating something of a windful for roasters over there who can use those coffees that are far cheaper than fresh coffee shipped from origin.
The technical trend of the market remains upwards, if a bit less decisively so than a few weeks ago. The March vs May NY Switch, which not long ago had gone from a 1 cent premium to a ¼ cent discount is now back out to a small premium as another sign of tightness in the coffee market.
Finally, it’s hard not to mention the latest surge in Covid cases and wonder how it might affect our industry. Certainly, the logistics issues that we continue to struggle with will continue to plague us if we cannot operate ships, ports, trucks, and warehouses at full capacity. Those in the coffee away from home sectors are likely to be disproportionately impacted, again, as people hunker down. There are hopeful signs from South Africa that this surge may not last nearly as long as previous ones – so many more people are protected today via vaccination or actual previous infection – so let’s hope for the best even if we prepare for the worst.
Recent arrivals for your consideration include:
• Colombians (Supremo and Excelso)
• Just in, a Sidamo Natural Grade 3
• Sumatra Mandehling DP, Fair Trade Organic
• Guatemala Hard Bean EP
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All the best,
The Armenia Team