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5-8-2023 Armenia Coffee Report

Good Monday to all,

It’s a lovely Spring morning here. We deserve it after all the rain we have been getting. Cup of Tarrazu this morning. Flowery coffee for a flowery time.

ICE coffee opened later than normal today for another bank holiday in London. God save the King.

The market continued to consolidate until the Friday session where it worked higher and gave us the high for the week. What we saw during the week were funds turned sellers and trade turn buyers as the market tested the lower end of the recent range. A couple of days below the 200 day moving average and then quickly back above it by the end of the week.

COT issued on Friday May 5 for trading as of Tuesday May 2nd showed long funds selling 1,797 lots to stand at 37,758 lots while short funds also sold adding 856 lots to stand at 20,557 lots short. Trade bought about 2700 lots in total as roasters need to catch up.

ICE warehouse stocks fell to 657,297 bags with nothing pending grading still. I was talking to a friend the other day who doesn’t understand why the stocks haven’t dropped quicker than they have. With a backward market and Brazil not at all aggressive, they should, especially the Brazils in Antwerp, represent good value to the market. He feels we’re going to come in one day and find out a large part of them are spoken for. Would be interesting to see the market react.

US Federal Reserve raised interest rates 25 basis points during the week. Meantime the Brazil Real still under 5 at 4.95693 and the Colombia Peso down to 4499.7.

Production in Colombia fell 25% to 566,000 bags in April. Exports fell 15% to 719,000 bags. Year to date exports were 3.4 million bags down 15% from the almost 4 million one year prior. Increased rainfall following 3 years of La Nina and lower fertilization levels were blamed.

Feels like the market is back in a 180-190 range for the time being. How can we help you today?

All the best,
The Armenia Team