« back to blog

2-14-2022 Armenia Coffee Report

Good morning and happy Monday to all,

Congratulations to our friends in LA and all who rooted for the LA Rams. It was a really enjoyable Super Bowl coming right down to the wire.

We’re sorry we haven’t forgotten about you and this blog. We too have recently had our struggles with Covid here at Armenia Coffee as so many have over the last 2 years. All is well that ended well and we’re all back now, ready to serve if we can.

It’s been an interesting period on the C. After a good consolidation in the March, the last week saw the market jump over 250 aggressively. Options and currency factors helped a lot, but so have fundamentals. Certified stocks are now down to 1,035,410 with 40,337 bags pending
certification. Brazil’s which were over 1,000,000 bags at one point are down to 369,968 bags with just 251,306 bags in Antwerp. Here in NY, other than 50,826 bags of Brazil there are just 570 bags of Burundi, 566 bags of Honduras and 285 bags of Rwanda.

Additionally coffee exports from Brazil fell 12% in January to 3.2 million bags. Again, exports fell due to difficulties in logistics. Containers and space on vessels both lacking, and it continues to this day with no changes in sight. And it’s not just in Brazil. Every origin is struggling with the same problems.

And finally, the Brazilian Real has been strong against the dollar now 5.20157 as we write this.

The disaggregated Commitments of traders issued Friday Feb 11 for trading as of Tuesday Feb 8 showed long funds added aggressively to their existing long by 3601 lots to 61238 lots while short fund also bought about 573 lots to stand at 5890 lots short. Big number trade added just over 8000 lots of short into the spike up to 250 and we’d expect they added more on the following day when we spiked up to 259.50.

This is no doubt that this is one of the hardest markets to trade and plan for we’ve seen in a very long time. Market structure, unsure freight rates, difficulty acquiring containers and vessel confirmations, difficulties landing ships on the West Coast, trucking being very difficult once the coffee is here in the States. Interesting times indeed with no real answers in sight, should lead to continued market volatility.

Please check out the offer list that accompanies this message and see if there’s anything we can help with.

All the best,
The Armenia Team