Softs News
Jun 01 - Robusta coffee traders fear prolonged tightness (IHSmarkit)
- Traders pin their hopes on the Brazilian crop
- Brazil’s robusta coffee exports down 60% y/y in 2022
- Asian robusta coffee production expected to remain tight
- Robusta coffee traders, having watched prices hit 15-year highs in May, are increasingly concerned that supplies of the bean variety used to make instant coffee will remain tight through to next year, Reuters reported. Brazil, the world’s fourth-largest robusta exporter after Vietnam, Indonesia and Uganda, has already begun harvesting its 2023-24 crop, and traders had been pinning their hopes on the country to plug a deficit caused by weak supply from Asia.
- However, traders and experts say robusta supplies are so tight in Asia that even 3 million 60-kg bags of exports from Brazil - the upper end of their forecasts - might not be enough to plug the gap. "If there were 5 million bags (of Brazil robusta exports) I could (see) a price fall but realistically, we are going to see unprecedented tightness that will carry on into next year," said a coffee analyst at a global trade house.
- Brazil exported just 1.508 million bags of robusta in calendar 2022, down 60% from 3.755 million the year before and as much as 4.927 million in 2020 as local roasters used more from the cheaper beans when arabica prices escalated.
- The tightness comes as top exporter Vietnam has all but run out of stock to ship this season, while No. 2 exporter Indonesia’s upcoming crop is expected to disappoint.
Another factor boosting robusta is a surge in demand for the bean that is cheaper than arabica and can be substituted in blends - something roasters have been doing at scale as arabica prices have been elevated for some two years running.
”When you switch a blend, the switch back is not that simple. It happens over a period of time. I think consumption of robusta is a lot bigger than most are assuming,” said a Europe-based trader.
Jun 01 - Increase in clove prices although Indonesia is close to harvesting (IHSmarkit)
- Low Indonesian crop in 2022 has favored a bullish trend
- Huge Indonesian purchases through Dubai and Singaporean traders
- Zanzibar has cleared out carry-over stocks
Cloves prices are in a bullish trend although harvest is close to starting in Indonesia according to the Dubai-located trader Girish Kumar in its latest market update.
Prices have ranged from 820-840 Indian rupee ($9.91-10.15/kg), incoterm excluded, this May, up from INR720-740/kg in April.
Indonesia’s industry has become a global re-exporter. There are rumors about massive Indonesian purchases of Zanzibar cloves, which might have cleared out its carry-over stocks. The tobacco industry is importing African cloves at low prices, to avoid high quotations for local crop.
Madagascar’s prices ranged from $8.3-8.5/kg CNF in the first fortnight of May and from $9-9.3/kg in the second fortnight, up from $7.5- 7.7/kg in April due to Indonesian purchases through traders in Singapore and Dubai. Madagascar had bumper crops compared with Indonesia from 2021-22 (18,000 metric tons in 2021 and 17,000 metric tons in 2022), having exported around 21,000 metric tons.
The Indian demand is weak as inventories are replenished although prices are growing due to robust international demand.
Indonesia’s harvest will take place between July-August, before the Madagascan (September). Kumar considers that prices might fall just then.
The bullish trend might rely on the disappointing 2022 Indonesian crop, which was below 100,000 metric tons, after reaching around 130,000 metric tons. The Indonesian market consumes around 100,000 metric tons, exporting the rest of its inventories. The other origins are not expanding their production. As a result, Indonesia’s 2023 production will be essential to drive prices and there might be rumors about a disappointing supply to favor speculation.
Jun 01 - Delays in EU beet sowing threaten to slow sugar output recovery
Widespread delays in sowing due to wet weather and potential pest attacks in France are threatening to limit an expected rise in the European Union's sugar output this year after farmers were encouraged to plant more by high prices, producers said. Sugar beet production in the EU is closely watched as sugar prices in the bloc are already trading near record highs following a smaller harvest and increased refining costs last year.
May 29 - Brazil's coffee crop should surprise positively and exports recover - Cecafe
Brazil's 2023 coffee crop should surprise positively and exports recover in the second half of the year, the head of exporters group Cecafe said on Friday, after shipments dropped by roughly a fifth in the first four months to end-April. Speaking at an event hosted by Cecafe, Marcio Ferreira said a good shipment pace should then be maintained in the first half of 2024.
May 26 - Asia Coffee-Prices edge up further in Vietnam; Indonesia faces supply crunch (Reuters)
- Coffee prices in Vietnam continued to rise this week, tracking gains in London robusta futures on supply concerns, while traders were scrambling to buy beans in Indonesia as those from the current harvest were limited. Farmers in Vietnam sold beans at 59,200 dong to 61,100 dong ($2.53-$2.61) per kilogramme, higher than 55,200 dong to 57,500 dong range last week.
July robusta coffee settled up $16 at $2,573, as of Wednesday’s close.
“July prices remain sky high due to concerns over short-term supplies shortage in key markets,” said a trader based in the coffee belt.
“Many exporters are afraid that they do not have enough beans to deliver in the second half of this year.”
The trader estimated a 10%-15% decrease in output in the current crop against the previous one, while the United States Agriculture Department said in its latest report production would be 6% lower. BMI, a Fitch Solutions unit, said the transition to El Niño conditions in the third quarter has stoked fears of reduced output in both Vietnam and Indonesia.
- Traders in Vietnam offered 5% black and broken-grade 2 robusta at a premium of $150-$180 per tonne to the July contract, widening from last week's $150-$160 range.
- While Indonesian Sumatra robusta coffee beans were offered at $270 premium to the September contract. The price was $140 premium to the July contract.
“The price is soaring because exporters are aggressively buying due to limited supplies,” said a trader.
- The premium was at $215 to the July contract, another trader said, up from a $170-$200 premium range a week ago.
“The increase was in line with the local market movement,” the second trader said. “Supplies are not enough, causing exporters to scramble for beans and pushing local prices to rise higher than London prices.” ($1 = 23,443 dong)
May 26 - Brazil cane crushing, sugar output beat estimates in early May
Sugarcane crushing and sugar output in Brazil's center-south beat market forecasts in the first half of May, data from industry group UNICA showed on Thursday, as mills took advantage of positive weather conditions to speed up operations. Both figures came in significantly ahead of already optmistic estimates from analysts surveyed by S&P Global Commodity Insights, as markets had forecast a perfect fortnight for mills.
May 25 - Analysts see perfect first half of May for Brazil sugar mills
Sugar mills in Brazil, the world's largest producer and exporter of the sweetener, had a very productive first half of May with no stoppages and a large sugarcane crush seen above 40 million tonnes for the fortnight, according to industry analysts. "In the center-south of Brazil no significant rains in May so far so no days lost," said Felippe Reis, crop analyst for EarthDaily Analytics.
May 24 - Sharp increase in garlic, turmeric and ginger prices in Bangladesh (IHSmarkit)
- Domestic supply dependent on India, Burma and China
- Key factors: weak domestic exchange currency, disappointing domestic crops and international supply shortage
- Bangladesh’s 2023 ginger production at around 80,000 metric tons
Bangladeshi retail prices for ginger and chili are sharply growing, due to bullish trends in India and China, their main suppliers, according to data from the Trading Corporation of Bangladesh (TCB).
The combination of weak domestic crop and international supply, inflation and falling exchange value of the taka currency against US dollar are pushing up prices at a record pace.
Bangladesh is one of the largest consumers of spices in south Asia, importing from China, India and Burma as its domestic crops cannot cover its demand. Its 2023 ginger crop was around 80,000 metric tons.
TCB listed the following average prices on 24 May 2023:
- Garlic, 140-160 Bangladeshi takas per kilo ($1.28-1.47/kg), 38-100% more month-on-month and 23% more year-on-year
- Turmeric, BDT200-280/kg, 5% more m/m and 27-43% more y/y
- Dry chili, BDT400-460/kg, stagnant m/m and BDT110-220/kg more y/y
- Ginger, BDT250-400/kg, BDT110-210 more m/m and BDT180-260 more y/y
May 24 - Slight increase in the global hazelnut supply projected due to a bumper Italian crop (IHSmarkit)
- 9% y/y growth in supply
- Ferrero is playing a key role in the Italian and Chilean production expansion
- 3% y/y fall in consumption
The 2023-24 world hazelnut supply is projected at 1.49 million (in-shell) metric tons, 9% more year-on-year, thanks to the combination of a bumper Italian crop (110,000 metric tons, 22% more y/y) and high carry-over stocks: 230,900 metric tons, 66% more y/y, according to the International Nut and Dried Fruit Council (INC). This data unveils that minor but key origins such as Azerbaijan and Georgia are controlling pests and plagues hitting their orchards and Ferrero is completing its plans to diversity supply in Chile and Italy, cutting its dependency on the Turkish industry.
- Turkey’s 2023-24 crop is forecast to fall by 2% y/y to 810,000 metric tons although its carry-over stocks are doubling y/y to 215,000 metric tons, fueling supply to 1.02 million metric tons, 10% more y/y. That means Turkish prices might start a bearish trend despite inflation and the Turkish Grain Board’s purchasing policy.
- Chile’s production is expected to grow by 20% y/y to 65,000 metric tons, as a result of the expansion of the planted area led by Ferrero, mirroring the pattern followed in Italy.
- Azerbaijan and Georgian crops are projected to grow by 9% y/y and by 25%, respectively, to 65,000 and 50,000 metric tons.
- The US crop is gradually growing due to a successful expansion plan followed by farmers in Oregon, the largest domestic origin, once they developed trees resistant to the Eastern Filbert Blight. The US 2023-24 output is projected at 77,100 metric tons, 6% more y/y.
France and Spain
- France and Spain were relevant suppliers in western Europe but, currently, their global market share is falling against emerging suppliers such as Chile, Azerbaijan or Georgia.
- France’s 2023-24 crop is expected to double y/y to 10,000 metric tons as trees are in an ‘on-year’. On the other hand, Spain is expected to drop by 64% y/y to 2,500 metric tons.
Consumption
The 2022-23 world consumption might reach 1.13 million metric tons, 3% less y/y. The demand for hazelnut-based products, confectionery particularly, was at highs during Covid-19 lockdowns. However, this slight fall and the rising available supply might cut prices, being a turning point.
May 24 - Robusta coffee prices soar amid low global supplies (IHSmarkit)
- Robusta price hit a fresh 12-year high
- Conab cuts Brazil’s robusta coffee output by 4%
- Demand for robusta remains strong
Robusta coffee futures in London posted further gains and rose to a 15-year high of $2,675 per metric ton on Tuesday amid ongoing bullish sentiment. The market received support from cuts in Brazil’s robusta production outlook and lower expected output from Indonesia in 2023-24, amid already tight supplies.
The National Commodity Supply Corporation (Conab) trimmed Brazil’s robusta coffee production in the current 2023-24 season to 16.814 million 60-kg bags, a decrease of 4% from 17.509 million bags projected in January. This is 7.6% lower than 2022-23’s volume of 18.199 million bags. This drop is attributed to the robusta coffee output in the top producer state Espirito Santo which is projected to drop 14.4% to 10.575 million bags from 12.358 million a year earlier due to erratic weather.
In Indonesia, the world’s third-largest robusta coffee producer, the production is expected to fall 20% year-over-year in 2023-24 to 8.4 million bags after excessive rain hindered flowering, according to USDA forecast. In addition, supplies remain tight partly owing to strong demand as roasters increased the proportion of robusta in blends and cut use of more expensive arabica beans to reduce costs at a time when global economic woes are leading many consumers to look for cheaper options, according to Reuters.
Market players also noted that the supplies left in the world’s top robusta producer Vietnam are very low, while newly harvested robusta supplies from Brazil haven’t reach the global market in significant volumes yet.
May 23 - Slight increase in Indian cashew exports in Q1 (IHSmarkit)
- 52% y/y increase in exports
- Main importers: the UAE, Saudi Arabia and the Netherlands
- 26% y/y fall in imports of raw cashew nuts (RCNs)
India’s cashew exports rose by 52% year-on-year in volume to 22,282 metric tons but fell by 5% y/y in value to $106.1 million in Q1 2023, according to customs data.
The main importers of cashew kernels (60% of the total volume) were the UAE, Saudi Arabia and the Netherlands, which took 39%, 12% and 11%, respectively, of the volume. India’s imports of raw cashew nuts (RCNs) fell by 26% y/y to 126,985 metric tons. The main suppliers were Tanzania, Ghana, Mozambique, which accounted for 49%, 18% and 9%, respectively.
- Analysis : Indian domestic prices are at lows due to weak demand, forcing processors to cut imports of RCNs and fuelling exports.
May 23 - Above-average rains and lower grinding volume pressure cocoa prices (IHSmarkit)
- Improved weather expected to boost the mid-crop
- Ivory Coast’s cocoa arrivals down 5.7% y/y
- Cocoa futures remain at high levels
Cocoa prices closed lower on Monday as the market expects the development of the April-to-September mid-crop to finish strong due to above-average rains in most of Ivory Coast’s main cocoa growing regions in recent days, Reuters reported.
The world’s top cocoa producer Ivory Coast is in its rainy season which runs officially from April to mid-November. Farmers said that the weather should help the trees and young fruit to develop well. Despite the improved weather, cocoa arrivals at ports are still behind last year’s pace. The arrivals reached 2.030 million metric tons of cocoa beans by 21 May since the start of the season on 1 October, down 5.7% from the same period a year ago. However, the difference year-on-year decreases as the crop progresses. In mid-April cocoa arrivals at Ivorian ports were 7% lower compared with last year.
The decline in prices was also attributed to the publication of April's Ivorian cocoa grinding data last week. The country processed 46,763 metric tons of cocoa during April, reflecting a 4.9% decrease compared with the corresponding month the previous year, according to the exporters' association GEPEX.
Cocoa futures in London started the week falling £26 ($32.35) to £2,372 per metric ton, while New York cocoa futures fell $45 to $3,023/t. However, both prices remain at high levels as the market is still concerned over the limited supplies in West Africa. Cocoa producers have been struggling due to rising production costs and low cocoa prices for several years, which have affected farmers' margins and led to a decrease in production.
May 19 - Turkish hazelnut market unmoved by inconclusive election result (IHSmarkit)
- Currency devaluation expected later
- Bumper crop forecast
- Exports still lagging behind
- The Turkish hazelnut market has continued in the same holding pattern with many speculators still expecting a depreciation in the currency after the election is officially over.
Olivier Telvi of UK trader Ronly Gida UK Limited, which represents the Turkish hazelnut processor Ronly Gida, noted that the much anticipated election on Sunday did not give a conclusive victory but with the way the voting happened it is widely expected that president Recip Erdogan is likely to win the second round on 28 May.
“In the meantime the Turkish exporter union announced a crop size for 2023 of 817,000 metric tons which would be another bumper crop. This alongside bad shipments should mean better prices ahead. However, there is still discussion of intervention from TMO (the Turkish Grain Board) which will help prevent the price from falling too much,” Telvi added.
- Sara van der Graaf of QFN Trading & Agency observed that prices and exchange rates were stable after the inconclusive election results. Van der Graaf also noted that to date Turkey exported 231,000 metric tons of shelled hazelnuts, versus 276,000 metric tons in the same period last season.
- QFN Trading listed the following currency movements for the last week:-
Euro-US dollar 1.0895 -0.57% The euro became weaker against the US dollar
US Dollar-Turkish lira 19,7103 +1.55% The US dollar became stronger against the Turkish lira
Euro-Turkish lira 21,4746 +0.98% The euro became stronger against the Turkish lira
- QFN Trading also listed the following current price indications for 2022 crop hazelnuts (class 1) on a per 100 kilo, delivered Europe (DAP) basis:-
Roasted meal 0-2mm $665 in 10kg vacuum cartons (indication in euro: €610)
Roasted diced 2-4mm $695 in 10kg vacuum cartons (indication in euro: €637)
Roasted diced 5-7mm $705 in 10kg vacuum cartons (indication in euro: €647)
Roasted diced 8-12mm $725 in 10kg vacuum cartons (indication in euro: €665)
S.r. blanched 11-13mm <10% skin $745 in 10kg vacuum cartons (indication in euro: €683)
S.r. blanched 12-14mm <10% skin $795 in 10kg vacuum cartons (indication in euro: €729)
S.r. blanched 12-14mm <5% skin $800 in 10kg vacuum cartons (indication in euro: €734)
NHK 11-13mm $625 in 10kg cartons (indication in euro: €573)
NHK 13-15mm $680 in 10kg cartons (indication in euro: €624)
For shipments per container, CFR EMP: deduction $6/100 kg (subject to final destination port)
Surcharge for extra class: $10/100 kg
May 19 - Pepper market has a steady to firm undertone (IHSmarkit )
- Prices stable for the time being but further increases expected in coming months
- European and US buyers holding back for now
- China and the Middle East were keen buyers recently
International pepper prices are viewed as steady to firm after gains in Brazilian and Vietnamese pepper prices in the last two weeks.
On 17 May, Albert Berisa of Rotterdam trader Catz International told S&P Global Commodity Insights that pepper prices from the latter two origins increased by more than 15% in the last fortnight. China in particular was quite actively purchasing along with the Middle East.
“Now, since yesterday (16 May) the market calmed down a bit,” Berisa explained. “We saw a slight reduction in prices but it was only by $15 per metric ton. The undertone is still steady to firm but it is now temporarily stable until the next buying wave will come again.”
- Berisa noted that Europe and the US were less prominent buyers than China and the Middle East.
Vietnam farmers reluctant to sell
He added: “Farmers do not want to sell below a certain price so before the price rise about a month ago we saw prices steady for a long period of time in Vietnam. The Vietnamese farmers were unwilling to release the material unless someone would pay a better price. So those who were in need of coverage, especially the exporters, had to buy in the local market and pay the price and also a certain premium, but there is no real selling pressure from Vietnam. Farmers prefer to hold onto their pepper than sell at the prices which we saw a month ago. In their opinion a more healthy price level would be 30% higher. We are now half way to that. Maybe the next 15% will follow in the next one to two months.”
Hence, at the moment any sales from Vietnam are of small volumes and on a hand to mouth basis.
“So far they still feel it’s a better investment to hold onto their pepper than to cash in. Also with the high rate of inflation etc. Also, they can easily switch because they are making good money on other crops, such as coffee, jack fruit, durian. That brings them more profit. Also, a lot of farmers have decided either to cut their pepper trees or not to replant and to plant the other crops instead because they are more remunerative,” Berisa explained.
Looking to Brazil
- Marco Van der Does of Van der Does Spice Brokers said: “Everyone is waiting a bit for Brazil to come out with their June-July crop. That will be the main change in the market. China is the biggest importer of Vietnam pepper at the moment so they are making the market.”
- Kai Jantzen of Hamburg trader Jantzen & Deeke said: “The market is quiet but very stable indeed. Only the new crop in Brazil (south, then north) could change the sentiment.”
- Pepper production from Vietnam and Brazil is expected to become lower in the coming years unless international pepper prices rebound to $5,000-6,000/t or higher. Current prices of $3,500-4,000/t are not sufficient motivation. Vietnam’s latest crop is said to be about 10% down from that of last year. Brazil’s 2023 crop was initially projected to be larger than that of 2022 but is now expected to be 10-15% lower. “So instead of a crop size of between 100,000 to 110,000 (metric tons) now probably it is going to be maybe 90,000 or 95,000 (metric tons),” Berisa said. Berisa added he expects another potential upturn in pepper prices over the next three to four months in line with next likely buying wave. European buyers will most likely delay coverage until after the summer, he suggested.
“It also depends on the stock position of each individual company,” Berisa noted. Post-Covid there was a huge buying wave which resulted in substantial stocks in Europe and the US.
Now, the market is close to the point of these stocks being used up, meaning fresh demand is imminent.
When Europe and the US next take coverage this could result in a 15-20% rise in prices from current levels, Berisa predicted.
Van der Does suggested that the next key factor is what he referred to as “the August effect” meaning the usual lull in demand in this month due to the holiday period in Europe and the US etc. added to which there is the arrival of Indonesia’s new pepper crop. “Until that time the pepper market will be sideways to maybe even firmer depending on the buying levels of China. The only difference is that again this year the output from Indonesia for Lampong and Muntok will be lower and less influential,” he concluded.
May 19 - Sugar futures drop on China's reserve release (IHSmarkit )
- China will release 1 million metric tons of sugar due to high global prices
- Petrobras approves a new pricing strategy that reduces ethanol prices
- France’s sugar beet area expected to decline
Raw sugar futures closed lower on moderate trading volume as prices were pressured by external factors. China's announcement of releasing 1 million metric tons of sugar from state-owned reserves due to high prices added to the downward trend. Additionally, Brazil's Petrobras approving a new pricing strategy for diesel and gasoline, potentially reducing gasoline prices, negatively affected cane-based ethanol.
However, support came from France’s lower sugar beet forecast. France’s farm ministry forecast 2023 sugar beet plantings at 380,000 hectares, down 2,000 hectares from its April forecast, down 5.3% from 2022, and down 11.8% from the five-year average.
The most-active contract for July delivery shed 22 points to settle at 26.07 cents per pound, in dealings between 26.01 and 26.63 cents. Second-month October also declined 22 points to 25.73 cents/lb and the back months ended with losses between 24 and 30 points. Trading volume rose to 110,236 lots from 95,257 a day earlier.
White sugar futures in London also finished weaker, with the benchmark August contract falling $1.90 to a settlement at $715.00 per metric ton, having moved between $713.30 and $726.90 in the course of the day. Second-month October declined $2.80 to $704.20/t and the rest of the board finished between $3.40 cents and $16.50 down. Trading volume rose to 8,575 lots from 7,545 a day before.
The August–July white sugar premium rose to $140.25/t from $137.30 a day earlier.
May 19 - Conab lowers forecast for Brazil's 2023 coffee crop on robusta drop
Brazil's 2023 coffee crop is expected to reach 54.74 million 60-kg bags, government food and statistics agency Conab said on Thursday, slightly lowering its January forecast of 54.94 million bags due to a larger drop in robusta coffee production. The total output, nonetheless, would still represent a 7.5% increase over the previous season, driven by higher arabica coffee production despite 2023 being an "off-year" in its biennial cycle that alternates years of high and low output.
May 18 - Asia Coffee-Scarce supplies in major Asian robusta producers; prices jump to multi-yr highs (Reuters)
- Vietnam’s domestic coffee prices edged up on Thursday from a week earlier on a supplies crunch while in Indonesia premiums extended gains due to poor output from the current harvest. Farmers in Vietnam sold beans at 55,200 dong to 57,500 dong ($2.35 to $2.45) per kilogram, higher than last week's 53,200 dong-54,200 dong range.
July robusta coffee gained $101 over the past week, settling at $2,582 as of Wednesday’s close, the highest level in 12 years, Refinitiv Eikon data showed.
Some traders said Wednesday’s close even hit a 16-year high.
“It’s very hard to buy beans in Asia now to fulfil signed contracts. Prices are too high, together with that, supplies are limited,” said an exporter based in Ho Chi Minh City.
- Export prices flipped to premiums this week due to subdued activities and empty stocks, according to traders. Traders in Vietnam offered 5% black and broken-grade 2 robusta at a premium of $150-$160 per tonne to the July contract.
- Indonesia’s Sumatra robusta coffee beans were offered at a $140 premium to the July contract, compared with last week’s $60 premium.
“Prices rose from last week because beans supply was limited due to small harvests,” said a trader based in the region. “Some areas have started harvesting but yields are not large.”
Another trader offered a $170 to $200 premium range to the July-August contract, compared with last week’s $100 premium to the May-June contract.
“Limited supplies caused exporters to fight for beans and pushed local prices to rise more than global prices,” the second trader said.
May 17 - Guatemalan cardamom market holding stable after earlier spikes (IHSmarkit)
- Demand ticking along but nothing spectacular
- Hefty stocks held by traders internationally
- Green cardamoms scarcer than other grades
- Guatemalan cardamom prices have been mostly stable since initial increases of 30-40% following a spurt of demand after the Gulfood show this February. Albert Berisa of Rotterdam trader Catz International estimated that Guatemala has so far exported around 45,000 metric tons from its 2022-23 crop and has about 5,000 metric tons left to export, giving a total of 50,000 metric tons of exportable quality material.
“Prices have been stable now for a while, after the surge in prices in February, which was during the Gulfood, because then the demand was quite big,” he told S&P Global Commodity Insights.
- Berisa recalled that after the 30-40% price rises there was a downward correction, particularly on the lower grades, such as those used for grinding, in particular the mixed yellow qualities (MYQs).
“First, prices were increased for the lower grades by about 60% and now they dropped again by about 20%. So altogether, if we look at the prices before Gulfood and now, the prices for the lower grades increased by about 40% and for the more expensive ones, such as the green ones, it was about 25-30%,” Berisa explained.
S&P Global Commodities prices data on 17 May listed Guatemalan bold green cardamom of approximately 8 mm size at $15,000 per metric ton CIF Middle East. MYQs of minimum 360 grams/litre were indicated at $6,800/t CIF any destination but Berisa advised that this price should now be updated to $5,750/t CIF any destination. Guatemalan cardamom seeds were at $8,500/t CIF any destination.
Barker explained that Guatemalan bold green cardamoms were currently being offered:
- Large whole at $15.25 per kg CIF.
- Medium whole greens were at $12.25/kg CIF.
- small greens $10/kg CIF.
- Large whole pale green cardamoms were at $8.75/kg CIF.
- Medium pale greens $7.75/kg CIF.
Barker added that seeds were at $7.50/kg CIF and MYQs $4.75/kg CIF.
May 16 - Indian cumin seed prices close to reaching INR50,000/quintal level (IHSmarkit)
- 15% m/m increase in spot prices
- 15-16% increase for futures prices for deliveries from May-August 2023
- Bullish prices due to the combination of damaged crops and low carry-over stocks
- Indian cumin seed spot prices averaged 46,408 Indian rupees per quintal ($564.1/quintal) at the Unjha market (Gujarat) on 16 May 2023, 15% more month-on-month and 110% more y/y. Prices are not finding a ceiling after unseasonal rainfalls delayed the harvests in Gujarat and Rajasthan (both in the North West), having damaged orchards in both.
Indian cumin seed exports reached 40,419 metric tons valued at $128.6 million in Q1 2023, 7% less y/y in volume and 31% more y/y in value, according to customs data.
China, Bangladesh and the US were the main importers of whole cumin seeds (95% of the exported volume), accounting for 24%, 22% and 5%, respectively.
Prices might exceed the INR50,000/quintal level in Q2 as the demand is still growing strongly, particularly in China. Cumin’s price trend will be bullish in the long-term due to the combination of disappointing crops and low carry-over stocks.
May 16 - Iranian pistachio exports clearly behind the previous season (IHSmarkit)
- 47% y/y fall in seasonal exports
- Main importers: Russia and India
- 23% y/y fall in production
Iran has exported 39,000 metric tons of pistachios from October 2022-April 2023, 47.3% less year-on-year and down from 152,000 metric tons in October 2020-April 2021. Open mouth in-shells accounted for 69% of the total, according to Tehran-based Green Diamond Tree in its latest market update.
Green Diamond Tree explained that sales are slowed due to high prices.
Russia and India were the main importers, accounting for 33% and 23%, respectively.
The 2022 crop totalled 105,000 metric tons (-23% y/y) with carry-over stocks at 15,000 metric tons, bringing the total supply to 120,000 metric tons. Seasonal sales totalled 63,000 metric tons, domestic sales taking 38% of the volume.
May 16 - Coffee traders pin hopes on Brazil for robusta beans as prices soar
Coffee traders scrambling to supply roasters with robusta beans are pinning their hopes on Brazil, as prices for the bitter bean typically used to make instant coffee hit 12-year highs after exports from top producer Vietnam slid. Vietnamese farmers have almost no stock left to sell after downsizing their coffee cultivation area to grow more profitable passion fruit and durian instead, leaving the market exceedingly tight.
May 16 - More rain needed for end of Ivory Coast cocoa mid-crop
Rainfall was below average last week in most of Ivory Coast's cocoa-growing regions, where farmers said more moisture was needed to have a strong end to the April-to-September mid-crop. Ivory Coast, the world's top cocoa producer, is in its rainy season, which runs from April to November
May 15 - Cashew nut kernel market viewed as stable (IHSmarkit)
- Uncertainty prevails over consumer demand
- Spot demand expected to improve in H2 2023
- Market is close to its lowest level
Most cashew demand is covered for nearby and buyers are concentrating on the second half of 2023 and first quarter of 2024.
Dutch edible nuts broker Global Trading & Agency observed that spot stocks are available but limited as buyers remain uncertain about consumer demand during the summer and are therefore reluctant to take long positions. “Most stocks are moving nicely now so we expect more spot demand during the second half of 2023 when consumer demand is picking up,” the company added.
As prices do not decline further while demand is limited, the market is at or close to its lowest level so now might be an interesting moment to take some additional cover until Q1, 2024, Global Trading suggested.
Further comments from Global Trading on the cashew nut market and other key nut sectors can be found on its website.
In Vietnam, Ho Chi Minh City-based supplier Golden Bridge reported that there was strong demand last week for the WW240 grade. Deals were confirmed at $2.70-2.80/lb FOB. Contrasting with this, demand for the WW320 grade was quite low and its prices are reducing further.
Golden Bridge is receiving more offers from BRC packers at $2.50/lb FOB until December shipments.
The company added it is difficult to request high quality material at such low prices now.
May 15 - US almond shipments at a slower pace this April (IHSmarkit)
- Monthly decline on both domestic and export volumes versus April 2022
- Domestic seasonal shipments 6.1% behind but exports 7.6% ahead
- Total seasonal shipments 3.5% up
Californian almond shipments slowed down last month.
The ninth position report for the 2022/23 season from the Almond Board of California (ABC) showed that volumes sold overseas this April amounted to 140.43 million lbs compared with 182.81 million lbs in the same month of 2022.
This brought export volumes for the first nine months (August-April) of 2022/23 to 1.45 billion lbs, 7.6% up from the 1.34 billion lbs reached in the same period a year ago.
Domestic volumes last month were at 56.81 million lbs against 62.42 million lbs in April 2022, helping to push domestic sales for the first nine months of 2022/23 to 544.04 million lbs from 579.4 million lbs in the same stage of 2021/22 – a decrease of 6.1%.
In his monthly letter to industry members Richard Waycott, president and chief executive of the ABC, noted that the board is placing “special emphasis” on reversing the slide in domestic consumption and more information on these efforts will be revealed in the coming months.
The latest shipments brought year to date total shipments to 1.99 billion lbs from 1.92 billion lbs a year ago – an increase of 3.5%.
Waycott remarked: “Well, what charges ahead for several months needs to take a rest once in a while! This seems to have been what took place in April as the global market contemplated the different acreage estimates and crop forecasts.”
March 2023 was the second-largest total shipping month in the ABC’s history. “What a difference one month can make,” Waycott observed. Compared with a year ago, April 2023 export shipments were off by about 43 million lbs, or 23%, he noted.
Several of the ABC’s major export stars took a breather in April compared with March including China, Spain, Germany, the Netherlands, Italy, Morocco, and the UAE. However, all of these countries, except Spain and the Netherlands, are in positive territory on a year-to-date basis compared with 2021/2022.
“Understandably, total committed shipments are well off last year’s mark as buyers and sellers try to interpret the outlook for the coming crop. This will become increasingly clear as the crop matures over the next two months,” Waycott concluded.
The ABC report showed total committed shipments of 564.65 million lbs versus 754.96 million lbs at the same stage last year – a decline of 25.2% y/y.
Dutch edible nuts broker Global Trading & Agency said that an expected 2023 US almond crop of between 2.2-2.5 billion lbs would be acceptable for world supply and help the industry to reduce carry-over stock as the 2024 crop most probably (“weather depending obviously”) will be another bumper one with all the water available currently.
May 11 - Cocoa mid-crop starting to pick up (IHSmarkit)
- High soil moisture offsetting the below-average rains
- Cocoa arrivals at Ivorian ports down 6.6% y/y
- Prices might retreat in the near-term
Cocoa futures ended largely unchanged last week but posted some losses earlier in the week after hitting a 6-1/2-year high two weeks ago. Below-average rains last week in most of Ivory Coast’s cocoa growing regions has not affected crops as soil moisture was high enough to offset it.
The April-to-September mid-crop recently started to pick up due to abundant and well-developed beans in Ivory Coast, local farmers reported. However, more rain will be needed to boost harvests at the end of the mid-crop, in August and September.
Prices recovered later in the week as cocoa arrivals at top grower Ivory Coast’s ports remained behind last season's pace. Total volume of cocoa port arrivals reached 1.945 million metric tons by May 30 since the start of the season on October 1, down 6.6% from the same period last season, according to Reuters.
S&P Global Commodity Insights maintains its estimates for a global cocoa bean deficit of 125,000 metric tons for 2022-23 due to an expected decrease in output and a rise in cocoa grinding. Despite the bullish outlook for cocoa markets, prices might retreat in the near-term as the mid-crop progresses, opening better buying opportunities.
May 10 - Bumper almond crop expected in Spain (IHSmarkit)
- 71.1% y/y increase in production expected
- Conventional production to account for 84% of the harvested volume
- Forecast might be downgraded if precipitations do not recover
Spain’s 2023-24 almond crop is expected to reach 128,419 metric tons, up 71.1% y/y, according to the latest subjective estimate released by the Spanish Association of Nut and Carob Growers (Aeofruse). Conventional and organic output accounts for 84% and 16% of the total output respectively.
This increase might rely on poor productions in the two previous season due to frosts and blooming issues, trees having experiences a long-term rest.
The planted area totals 638,890 hectares, 525,840 being productive. Non-irrigated and irrigated acreage took 83% and 17%, respectively, of the productive area.
The Spanish production has a strong projection over the next five years thanks to young and irrigated orchards, which already account for 57% of the harvested volume.
However, Aeofruse has explained that it might downward this forecast if rainfalls do not recover in the short-term.
May 09 - Fall in crude oil prices drives bearish trend in guar gum (IHSmarkit)
- 2% m/m increase in spot prices
- 15% y/y fall in guar gum exports in January 2023
- 2-5% m/m fall in futures prices for deliveries from May-October 2023
India’s guar gum spot price averaged 11,796 Indian rupees per quintal ($144.3/q) at the Jodhpur wholesale market on 8 May 2023, 2% more month-on-month and 1% less year-on-year.
The combination of heavy stocks of guar seeds and weak exports of gum are expected to keep prices under pressure, according to the Indian consultancy company SMC Global Securities explained in its latest market update. Guar seed and futures gum quotations are bearish due to the fall in oil prices.
Indian guar gum exports fell by 15% y/y in volume to 34,948 metric tons and by 12% in value to $70.6 million. The main importers were the US (10,998 metric tons, -14% y/y); Russia (7,288 metric tons, -0.3% y/y) and Germany (4,126 metric tons, -16% y/y).
The daily futures market prices on India’s National Commodity & Derivatives Exchange (NCDEX) were:
Deliveries in April closed at INR 11,209/q for deliveries on 20 March, 6% less m/m
INR 11,445/q for deliveries in May 2023 on 5 May, 2% less m/m
May 09 - Low supply and strong demand boost robusta coffee prices (IHSmarkit)
- Arabica coffee prices fall despite low stocks
- Colombia’s production down 25% y/y in April
- Vietnam’s output for coffee expected to decline by 7% in 2022-23
- Arabica coffee prices ended lower last week but robusta prices remained slightly higher.
The ICO Brazilian Naturals group indicator fell to an average of $1.89 per pound, down 2.5% from the previous week and 6.3% from two weeks ago. Brazil’s 2023-24 coffee crop has started in April with some regions of Sao Paulo state already harvesting arabica coffee.
Despite the lower production, Colombian ICO’s mild arabicas group indicator ended at an average of $2.30/lb, down 2.2% from a week ago and 4.9% from $2.42/lb two weeks before. Colombia produced only 566,000 60-kg bags of coffee in April, down sharply by 25% from 750,000 in the same month last year and the lowest quantity for this month since 2011, according to data from the National Federation of Coffee Growers.
The ICO’s other mild arabicas group indicator also ended lower at $2.22/lb, down 2.8% compared to $2.29 the previous week. Arabica “C” futures on the ICE fell by 1.6% to a three-week low of $1.89/lb and 5.1% from two weeks ago despite the lower inventories as the market has recently corrected from a surge to a nearly seven-month high in mid-April. Stocks of ICE certified arabica beans fell by 22,124 bags to a four-month low of 698,868 bags in the two weeks to April 25, exchange data show.
By contrast, robusta coffee prices continued its bullish trend due to low stocks in top producer Vietnam, coupled with strong demand. The other mild robustas group indicator rose by 0.5% to $1.19/lb from a week ago and 1% from the price recorded two weeks before. Robusta coffee futures in London ended at average of $2,546 per metric ton, up 0.5% from the previous week and 2.8% from two weeks ago. In Vietnam, robusta coffee likely to fall by 7% in 2022-23 to a four-year low of 1.67 million metric tons (27.8 million 60-kg bags), according to the median estimate of exporters and traders in a Bloomberg survey.
May 08 - Australia’s 2023 almond crop estimate downgraded due to low yield (IHSmarkit)
- Australia’s 2023 production re-estimated at 117,150 metric tons, 25% less than the previous estimate
- Combination of unfavorable weather, poor quality water, floodings and bee pollination shortage
- The 2022-23 US and Spanish productions hit by drought
Australia’s 2023 almond production estimate has been downgraded by 25% to 117,150 metric tons compared with the forecast released in January 2023, according to the Almond Board of Australia (ABA). The combination of a poor pollination weather, a shortage of beehives in the state of Victoria due to restrictions after a varroa mite outbreak, unfavourable weather and poor-quality water during floodings in the Murray Darling basin has hit the yield. ABA has reported that it will release a new estimate soon.
“This will be a huge blow for growers who are already dealing with high costs of production and low global pricing,” the chief officer of ABA, Tim Jackson, said.
Australian is mirroring the US and Spain, the other two key global origins, whose 2022-23 productions have been hit by severe drought.
May 08 - Sugar prices at 11-year highs, buy or sell?
Traders, producers and analysts were mostly bullish about the outlook for already high sugar prices, as they gathered at an annual meeting this week in New York, while a few expressed caution after sugar hit a 11-1/2 year high last week. Raw sugar prices at the Intercontinental Exchange rose 37% since January to a peak of 27.41 cents per pound last week amid a short-term supply tightness and concerns over the arrival of the El Nino climate phenomenon later this year, that could disrupt crops.
May 05 - Asia Coffee-Domestic prices edge further in Vietnam, Indonesia quiet (Reuters)
- Coffee prices in Vietnam continued to inch up this week on tighter supplies as farmers ran down their inventories, while trading activities remained slow in Indonesia after Eid Al-Fitr holiday, traders said on Thursday. Farmers in Vietnam's central highlands, the country's largest coffee-growing area, sold beans at 50,800 dong to 52,800 dong ($2.17-$2.25) per kilogramme, higher than last week's 50,500 dong to 52,200 dong range.
“Trade is not really robust due to supplies crunch and post-long holiday sentiment,” said a trader based in the coffee belt.
“Shipping rates are now rising. Hence, exporters’ profit has been narrowed.”
- Traders in Vietnam offered 5% black and broken-grade 2 robusta at a discount of $120-$130 per tonne to the July contract, unchanged from a week earlier.
July robusta coffee settled at $2,424 as of Wednesday’s close.
- Coffee exports from Vietnam are estimated to have increased 1.8% in the first four months of 2023 from a year earlier to 753,000 tonnes, equivalent to 12.5 million 60-kg (130-pound) bags, official data showed. The country’s coffee shipments in April are estimated at 200,000 tonnes, valued at $474 million.
- Meanwhile, shipment of Indonesia’s Sumatra robusta coffee beans stood at 7,529.46 tonnes in March, a 55% drop on a yearly basis, trade office data showed. Sumatra coffee bean exports also dropped 37.34% on a monthly basis from 12,016.6 tonnes shipped in February.
- The Sumatra Robusta coffee beans prices this week remained unchanged at $40 premium to the July contract.
“Prices are stable as trading has just started after Eid,” said a trader.
According to another trader based in the same region, beans were at a $100 premium to the May-June contract.
“Trading has not been back to normal yet and is still a bit quiet after Eid,” the second trader said.
May 04 - Lower Indian sugar production weighs on global supply (IHSmarkit)
- Sugar prices hit 11-and-a-half year high
- India’s sugar production estimate trimmed by 10.3%
- Sugar exports from India are expected to fall by half in 2022-23
Sugar futures rose to its highest level in 11-and-a-half years last week boosted mainly by concerns over tight global nearby supplies.
Thailand’s sugarcane crushing in 2022-23 ended at 93.9 million metric tons, down 14.6% from the 110 million initially expected, and forecasts for the 2023-24 season are even lower at 74 million metric tons as farmers are switching from cane to cassava. Chinese sugar production in 2022-23 also came in well below expectation. In Brazil, 2023-24 cane crush started at a slow pace in April.
However, the scenario in India is currently one of the most bullish elements in the sugar market. The Indian Sugar Mills Association (ISMA) trimmed the sugar production to 32.8 million metric tons, down 10.1% from 36.5 million assumed at the start of the season on 1 October as cane yields were affected by erratic rainfall in India’s top producing region Maharashtra.
With that being said, the current output forecast for this season does not leave any space for additional exports above its recent quota of 6 million metric tons. With production estimated at 32.8 million metric tons and domestic consumption at 27.5 million, the exportable surplus would be 5.3 million metric tons, according to ISMA. This is well below the record of 11.2 million metric tons exported in the 2021-22 season.
In the 2023-24 season, in a scenario of normal monsoon rains, India may produce around 33-34 million metric tons of sugar due to an assumed slight increase in the planted area, which could result in exports in the range of 3-5 million metric tons. But in a scenario for poor monsoon rainfall, the government may not allow exports at all, which could increase sugar prices further.
May 04 - Cocoa prices hit seven-year high amid rising demand and tight supplies (IHSmarkit)
- Cocoa arrivals at Ivorian ports down 6.9% y/y
- High demand increases deficit projection for 2022-23
- Prices are expected to maintain the upward trend
Cocoa futures continued to climb last week, having traded above $3,000 per metric ton, the highest level in seven years. The market maintained the bullish trend as output from the top producer Ivory Coast remained lower and global cocoa grind saw an increase in the first quarter of 2023.
Cocoa arrivals at Ivorian ports remain well behind last season's pace. Total volume of cocoa port arrivals reached 1.907 million metric tons by April 30 since the start of the season on October 1, down 6.9% from the same period last season, according to Reuters.
Except for North America, all regions showed cocoa grind growth in Q1 2023, which combined processed 4.5% more than in the first quarter of 2022.
S&P Global Commodity Insights therefore raised its deficit projection to 125,000 metric tons for the current 2022-23 season, up from 91,000 expected previously. Ivory Coast and Germany were the main contributors to the increase with higher volume of cocoa grinding by 35,000 and 15,000 metric tons, respectively.
Despite the lower volume of cocoa arrivals at ports, the industry believes that these numbers will recover in the coming months as Ivory Coast’s farmers reported that soil moisture is high enough to ensure a strong April-to-September mid-crop.
However, cocoa prices are expected to continue rising due to improving economic conditions globally and the potential for El Niño later in the year.
May 03 - Indian cumin seed futures soar to record levels (IHSmarkit)
- Dwindling carry-over stocks and below normal arrivals
- Increased spot demand for coriander seed
- Downward pressure on guar seed and guar gum prices
Indian cumin seed (jeera) May futures on the National Commodity and Derivatives Exchange (NCDEX) jumped to its record level, breaching the 45,000 rupees ($550) per quintal mark at NCDEX as well as in the Unjha market in Gujarat. Cumin seed prices in Unjha were reported at INR45,180/quintal on Tuesday.
“Tighter carry-over stocks and below normal arrivals in the market pushed up the jeera prices to the record levels. Market participants showed active interest in buying activities in anticipation of a big rally in prices,” SMC Global Securities explained.
Indian cumin seed prices have doubled in the last year and are likely to move up further on prevailing supply deficit concerns. However, marginal traders are avoiding bulk buying in anticipation of a rise in seasonal supply of cumin seed in Gujarat and Rajasthan that will lead to a correction in prices.
May cumin seed futures are expected to trade in a range of INR42,000-47,500/quintal.
Coriander seed
NCDEX May coriander seed (dhaniya) prices are expected to extend their short covering on increased spot demand. Report of yield losses and crop damage in Rajasthan due to recent unseasonal rainfall has triggered short covering in the market.
Yield losses in Rajasthan and Gujarat due to unseasonal rainfall might lead to a downward revision in production. Coriander seed production is estimated to increase by 81% year-on-year to 376,000 metric tons in Gujarat during 2022-23. NCDEX May coriander seed futures are likely to trade in a range of INR6,500-6,900/quintal SMC Global Securities predicted.
Guar seed and guar gum
Guar seed May futures are likely to trade sideways to down in the wake of a sluggish demand outlook. Heavy stocks with farmers and bleak export enquiries of gum are expected to keep prices under pressure.
Guar prices will also track the downfall in crude oil prices that will hurt the demand prospects of gum. Guar seed prices will trade in a range of INR5,200-5,700/quintal in the near term while guar gum prices are likely to trade in a range of 10,500-11,800/quintal SMC Global Securities suggested.
Mentha oil
SMC Global Securities predicts that the mentha oil May contract is likely to trade down in the wake of improved weather conditions in Uttar Pradesh and Bihar for sowing.
A recent spell of rainfall in Uttar Pradesh and Bihar has proved helpful for sowing activities. Forecast of above normal rainfall in May will be helpful for sowing activities of mentha. In addition, rising imports of menthol and limited buying by China will also put pressure on prices.
Mentha oil prices are likely to trade in a range of INR955-990.
May 03 - Honduran coffee exports rise 48.7% in April 2023 (IHSmarkit)
- Coffee exports from Honduras reach 868,753 bags in April
- High exports were driven by higher demand and delayed shipments from the previous month
- Honduran exports are expected to rise to 5.10 million bags in 2022-23
Honduras exported 868,753 60-kg bags of coffee in April 2023, up 48.7% from 584,063 bags in the same month last year, according to preliminary data from the National Coffee Institute (IHCAFE). IHCAFE said that the strong rise in shipments during April was due to higher demand and delayed shipments from the previous month. This brought total exports in the first seven months of 2022–23 (October–September) to 2.880 million bags, up slightly from 2.809 million shipped in the same period last season.
The Honduran Coffee Exporters Association (ADECAFEH) projects the country to export 5.10 million 60-kg bags of coffee in the current season, up from 4.70 million in 2021–22.
May 01 - Chinese trader COFCO delivers 900,000 tns of sugar to ICE exchange
Chinese commodities trader COFCO International has delivered 900,000 tonnes of raw sugar to the International Exchange (ICE) on the expiry of the May contract, a very large amount of the product from a single company, traders said on Friday. The sugar being delivered by COFCO is all of Brazilian origin and will be made available to the companies taking delivery of the product at ports in the country, most likely the Santos port, the traders added.
Apr 27 - Asia Coffee-Vietnam discounts extend on scarce supplies, slow trade (Reuters)
- Discounts for Vietnamese coffee extended this week due to high global prices as well as scarce supplies as farmers sold most of their stocks, while premiums narrowed in Indonesia as supplies started to come in, traders said on Thursday. Farmers in Vietnam's central highlands, the country's largest coffee-growing area, sold beans at 50,500 dong to 52,200 dong ($2.15-$2.22) per kilogramme, up from 50,300 dong to 52,000 dong a week ago.
- Traders in Vietnam offered 5% black and broken-grade 2 robusta at a discount of $120-$130 per tonne to the July contract, compared with last week's discount of $30-$50.
“London prices keep rising. It hit a 12-year high on Monday due to scarce supplies,” said a trader based in the coffee belt.
“Farmers have nothing to offer now and most of the beans are now in exporters’ hands,” the trader said, adding trade was tepid.
- July robusta coffee gained $27 over the past week, settling at $2,413 as of Wednesday’s close.
- In Indonesia’s Lampung province, one trader offered robusta beans at a $40 premium to the July contract, narrower than the $100 premium two weeks ago, as new bean supplies started coming in and as the benchmark prices in London increased. Indonesian activities were muted last week for the Eid al-Fitr holidays.
- Another trader offered a $100 premium to the May and June contracts, down from $150-$160 previously as exporters still faced stiff competition with local buyers.
Apr 26 - Indian traders without African sesame seeds to deliver until June (IHSmarkit)
- Supply secured from June onwards
- Gujarat’s summer crop estimated at 145,000-160,000 metric tons
- Indian exporters ready to stabilize or cut prices 
The sesame seed harvest has concluded in Gujarat (North West, India), ranging from 145,000-160,000 metric tons when Indian traders have sold out their stocks of African sesame, according to the Indian processor and trader M. Lakhamsi Industries in its latest market update.
The company explained that the Indian industry is ready to stabilize or cut prices when the Brazilian is around the corner. South Korean demand is robust although the unexpected fall in purchased seeds in the latest auction in April due to high prices is a clear sign: “While we understand that they have a mental price cap of $2,000/metric tonne, we expect India to have the lions share in the subsequent tenders for the next 3 months and we should ship 12,000-15,000 metric tons at least,” the general manager of M. Lakhamsi, Sanjiv Sawla explained.
The supply will be secured from May-June thanks to Brazilian and new African harvests (Tanzania, Mozambique and Nigeria). Indian traders might have available shipments of African sesame seeds from June onwards.
M. Lakhamsi quoted the following FOB prices for May-June shipping:
Natural Whitish Sesame 99/1/1: $1,740/t, 22% more year-on-year.
Natural Whitish Sortex 99.95 %: $1,840/t, 11% less than in January and 18% more y/y and
Natural Jet Black Sortex 99.95%: $2,025/t, 6% more than in January and 8% more y/y
Hulled Sesame 99.98%: $2,225/t, 15% more y/y
Hulled Sesame 99.95%: $2,195/t, 4% less than in January and 15% more y/y
Apr 25 - Increase in Ghanaian cocoa purchases offset lower arrivals at Ivorian ports (IHSmarkit)
- Cocoa arrivals at Ivory Coast’s ports down 4.8% y/y
- Ghana’s cocoa purchases rise 18% on year
- Low year-on-year cocoa arrivals at Ivory Coast’s ports are being compensated by increases in Ghanaian volume of graded and sealed cocoa beans, the International Cocoa Organization (ICCO) reported in its March monthly report. Cumulative arrivals of cocoa beans in Ivorian ports reached 1.779 million metric tons as of March 31, down 4.8% or 89,000 from 1.868 million metric tons recorded in the same period of the previous season. Consequently, cocoa beans exports from the country were reported at 785,700 metric tons between October 2022 and February 2023, down 1.5% year-on-year.
- In contrast, Ghana’s volume of graded and sealed cocoa beans purchased since the start of the 2022-23 season was reported at 566,846 metric tons by March 9, up 18% or 85,360 from 481,486 metric tons in the same period of 2021-22.
- The year-on-year reduction of 89,000 metric tons in Ivory Coast’s cumulative cocoa beans arrivals combined with the increase of 85,360 metric tons in Ghanaian purchases of graded and sealed cocoa beans resulted in a slightly decrease in the supply of cocoa beans from the two-top world cocoa producers. Based on the latest available information, the total supplies of cocoa from the two producing countries is estimated to reach 2.346 million metric tons over the first half of 2022-23, slightly down by 0.2% from 2.349 million recorded in the same period last year, according to ICCO. However, it is worth noting that the current scenario is subject to change as the mid-crop progresses.
Apr 25 - Sri Lankan desiccated coconut exports closed Q1 with a sharp fall (IHSmarkit)
- 40% fall in revenues
- 11-12% m/m fall in wholesale prices
Sri Lanka’s desiccated coconut exports in the first quarter of this year (January-March 2023) reached 7,776 metric tons valued at $15.2 million, 21% less year-on-year in volume and 40% less in value. The main importers were India, the UAE and Iraq, which accounted for 18%, 12% and 9%, respectively, of the volume.
- The fresh price averaged 72.8 Sri Lankan rupees ($0.22) per coconut in coconut auctions held on 20 April, 13% less month-on-month and 13% more y/y. 
- Wholesale desiccated coconut prices ranged from 510-525 rupees/kg for fine, 11% less m/m, and from 520-530 rupees/kg for medium, 3-12% less m/m, according to the Sri Lankan Coconut Development Authority.
- Meanwhile, coconut milk international sales fell by 9% y/y in volume to 13,530 metric tons but grew by 18% y/y in value to 7.3 billion rupees. Coconut milk powder exports fell by 35% y/y to 2,610 metric tons but increased by 12% to 2.7 billion rupees.
Apr 25 - Indian turmeric prices decline further (IHSmarkit)
- Intensified arrival pressure prompts local selling
- Improved supplies of cumin seed
Indian turmeric prices on the National Commodity and Derivatives Exchange (NCDEX) dropped further due to limited buying in the local market.
- In its Commodity Daily Report (Agri) SMC Global Securities observed that fresh selling is being seen is turmeric due to surging arrival pressure at major markets. Spot prices in Nizamabad also tumbled by 1% to 6,727 rupees ($82.18) per quintal. Bleak demand against adequate supplies will keep prices under pressure, the company suggested. However, reports of crop damage in Andhra Pradesh due to untimely rainfall and improved export enquires are likely to then cap any major downfall in prices, it noted.
- The turmeric May contract is expected to trade in a range of 6,500-6,900 rupees/quintal.
Cumin seed
SMC Global Securities expects cumin seed (jeera) prices to remain under pressure, as profit booking is likely to be extended due to improved supplies in the market. Seasonal arrivals are expected to increase in the coming week which might lead to some correction in prices.
- As noted in other recent reports from SMC Global Securities, the NCDEX has also imposed event based additional surveillance margin on the running active contract of cumin seed to cap any abnormal movement in prices. However, the major trend is still bullish due to the weaker production outlook of cumin seed, SMC Global Securities added.
- It expects the NCDEX May cumin seed contract to correct towards 38,000 rupees/quintal in the near term and feels that it is likely to face resistance near 42,500 rupees/quintal. Any break up above 42,500 rupees/quintal will push the prices up to 45,000 rupees/quintal.
Coriander seed
NCDEX coriander seed (dhaniya) is expected to trade sideways as some short covering is expected on a downward revision in production.
- Fresh buying is being seen in Indian coriander seed after a continuous fall in prices. However, gains will be limited due to higher production estimates and improving supplies in Rajasthan, SMC Global Securities predicted.
- NCDEX May coriander seed futures are likely to trade in the range of 6,200-6,600 rupees/quintal.
Guar seed and guar gum
Guar seed and guar gum futures are expected to trade sideways due to the absence of fresh cues to the market.
“Demand side fundamentals are looking unsupportive as most of the millers are avoiding bulk buying due to adequate supplies in the market. Growing fear of recession and limited export demand of gum is likely to put pressure on prices,” SMC Global Securities stated.
- Guar seed prices might trade in the range of 5,400-5,900 rupees/quintal while guar gum is expected to trade in a range of 10,500-12,000 rupees/quintal.
Mentha oil
SMC Global Securities expects the mentha oil April contract to trade mixed to higher after short covering in the market supported by the weaker production outlook.
- As recently noted in other SMC Global Securities reports, a forecast of above normal temperature during April-May is likely to affect the sowing activities adversely that will support the firmness in prices. However, increased imports of menthol will cap the gains.
- The company also maintained its earlier forecast that prices are likely to hold support near 945 rupees and will honor the resistance of 990 rupees.
Apr 24 - Coffee prices rise amid lower stocks (IHSmarkit)
- ICO Brazilian Naturals group indicator hit the highest price in four months
- Robusta prices rise amid lower supply in Vietnam
- Arabica coffee prices continued to rise last week as the market was concerned over tight supplies. This sentiment was partly fueled by slow exports from some of the world’s largest exporters as well as an ongoing drop of ICE certified arabica stocks. Brazilian coffee exports fell to a five-year low of 3.088 million bags from 3.815 million a year ago. Similarly, Colombia’s March coffee exports fell 19% year-on-year to 906,000 bags. Stocks of ICE certified arabica beans decreased to four-month low of 709,612 bags in April 17.
- The ICO Brazilian Naturals group indicator rose 1.8% to $2.04 per pound from the previous week, the highest level since October 2022, and 8.8% from two weeks ago.
- In Colombia, the ICO’s mild arabicas group indicator ended at $2.45/lb, up 2.6% from a week ago and 8.2% from $2.26/lb two weeks before. Colombia produced only 799,000 bags of coffee in March, down 12.6% from 914,000 in the same month last year and the lowest quantity for this month since 2013, according to data from the National Federation of Coffee Growers.
- The ICO’s other mild arabicas group indicator also ended 2.5% higher at $2.39/lb compared to $2.33 the previous week. Arabica “C” futures on the ICE rose by 2.7% to a six-month high of $1.99/lb and 10.6% from two weeks ago amid concern over lower supplies.
- Robusta coffee prices also posted gains last week as supplies was reported tight, particularly in top producer Vietnam. The other mild robustas group indicator rose by 0.7% to $1.17/lb from a week ago and 4.8% from the price recorded two weeks before. Robusta coffee futures in London ended at USD2,454 per metric ton, up 1.4% from the previous week and 7.1% from two weeks ago.
- In Brazil, the 2023-24 arabica harvest is expected to get underway in May and will reach full steam in June and July. The supply pressure will eventually make itself felt if no frost issues arise.
Apr 24 - Sugar production in Maharashtra dropped by 17.4% (IHSmarkit)
- Maharashtra produced 10.53 million metric tons of sugar in 2022-23, down 17.4% from a record 12.753 million produced by the same date in 2021–22.
- The strong drop in production was attributed to a reduction of the recovery rate to 9.98% from 10.40% in 2021–22 and 10.50% in the previous season. There was a dry spell in June and July last year when the sugarcane needed heavy rain for its development whereas there was extended rainfall in the months of October and November beyond the monsoon season which led to the accumulation of moisture in the soil and adversely affected the sugarcane’s sugar content, local sources said.
- The area under sugarcane cultivation has been 1.45 million ha for the last two seasons. Maharashtra has 209 private and co-operative sugar mills that completed the crushing of cane last week. Some 1.06 million metric tons of sugar has been diverted to the production of ethanol in 2022–23, up slightly from 1.02 million a year earlier it was added.
Apr 20 - Asia Coffee-Vietnam export prices flip to discounts, Indonesia closed on Eid (Reuters)
- Vietnam coffee export prices slid to discounts against the international benchmark, as London robusta prices inched up this week on near-empty stocks, traders said on Thursday. The market was closed in Indonesia on account of Eid Al-Fitr. Farmers in the central highlands, Vietnam's largest coffee-growing area, sold beans at 50,300 dong to 52,000 dong ($2.14-$2.21) per kilogramme, edging up from 49,400 dong to 51,500 dong range a week ago.
- Traders in Vietnam offered 5% black and broken-grade 2 robusta at a discount range of $30-$50 per tonne to the July contract. The prices were $40-$50 premium to the same contract. "The prices are too high now, while no beans are available," said a trader based in the coffee belt, adding that no deals were being sealed at the current rates. Another trader based in the same region said farmers were downsizing their coffee cultivation area and growing passion fruits and durian instead.
“These trees take five years to bear fruits for harvest, but many are still cutting down coffee trees for the transition,” the trader added.
- July robusta coffee gained $54 over the past week, settling at $2,386 as of Wednesday’s close.
Apr 20 - Cocoa grinding rises in the first quarter of 2023 (IHSmarkit)
- Brazil’s first quarter cocoa grinding up 15% y/y
- Asian cocoa grinding also rises
- Cocoa grinding in Brazil, the world’s fifth largest chocolate market, rose 15% in the first quarter of the year to 64,016 metric tons from the same period a year ago, according to the industry group AIPC. AIPC also reported a significant increase on Brazilian cocoa imports to 34,781 metric tons in first quarter compared to only 3,003 metric tons in similar period a year earlier, while cocoa production in the country fell by 6.5% to 27,046 metric tons. Asia’s cocoa grinding amount in the first quarter was also released this week, having increased by more than 4% year-on-year to 222,028 metric tons, according to the Cocoa Association of Asia.
- Earlier in the week, Ivory Coast also recorded increase in cocoa grinding volume by 32.9% year-on-year in March to 69,567 metric tons, which brought total grinding volume in the 2022-23 season so far to 361,762 metric tons, up 15.3% from the same period a year ago.
Apr 20 - Concerns about Vietnamese purchases of African processed cashews (IHSmarkit)
- Proposal to set a 25% tariff on the import of processed cashews
- The Vietnamese Cashew Association (Vinacas) considers that African processed cashew exports might undermine investments of Vietnamese processors. Vinacas explained that many African countries are raising exports taxes on raw cashew nuts (RCNs), fuelling investment in processing plants, gaining market share against the Vietnamese. In addition, India, the largest global consumer, imposes a 25% tariff on imports of processed cashews to protect its domestic industry, cutting Vietnamese sales.
- As a result, Vinacas has proposed imposing a 25% tariff on imports of processed cashews for those origins which do not agree to cancel tariffs on exports of RCNs.
Apr 19 - Sugar beet area to increase modestly in Europe (IHSmarkit)
- EU sugar beet area expected to rise by 2.7% in 2023-24
- Beet area expected to increase 5.7% in non-EU countries
- 2023-24 sugar output projected to recover from the current season
- S&P Global Commodity Insights projects a slight increase in the European Union’s sugar beet area in 2023 to around 1.35 million ha, only 2.7% above last year’s area of 1.32 million ha.
- France’s area under beet cultivation is forecast by the Agriculture Ministry to reach 381,762 ha, down 4.9% from 401,596 ha in 2022 due to a ban on the treatment of seeds with neonicotinoids.
- However, the expected increase in Poland’s beet area offsets a similar-sized reduction in France. The area under beet in Poland, the EU's third-largest producer, is projected to reach 257,000 ha in 2023, up 34,000 ha from last year and the highest since 2005-06 amid improved yield and higher beet prices.
- Outside the EU, Russia farmers had sown sugar beets on 198,700 ha as of April 10, which is 1.7% more than last year, represents about a fifth of the 1.04 million ha estimated to be sown this season. If realized, this would be up another 1.5% year-over-year and the third straight increase.
- All in all, the areas under beet in the eight European beet growing countries outside the EU are forecast to rise by 5.7% to a four-year high of 1.70 million ha amid increases in all countries due to higher sugar and beet prices. This could result in Europe’s total sugar production recovering to 29.2 million metric tons in 2023-24 after a drop by 2.0 million metric tons to 27.7 million in the current 2022-23 season. Of this total, EU is expected to produce 15.8 million metric tons, which would still be significantly below 17.0 million in 2021-22.
Apr 19 - Vietnam finishes pepper harvest with record exports to China (IHSmarkit)
- Vietnam’s pepper exports rose by 36% y/y in Q1 2023
- Harvests in Malaysia, Indonesia and southern Brazil to take place from May-August
- Vietnam has finished the pepper harvest and has exported 18,900 metric tons to China in Q1 2023, a record, thanks to its consumption recovery once the Covid-19 restrictions have concluded, according to trading sources. Vietnam’s international sales totalled 76,000 metric tons in Q1 2023, 36% more year-on-year. The 2023 Vietnamese pepper output is expected to be at around 200,000 metric tons (+16% y/y), as initially projected
- Cambodia is still harvesting. Meanwhile, Indonesia, Malaysia and southern Brazil will continue from June-September.
- Prices have gradually grown since December 2022. This trend might accelerate if Vietnam clears out its 2023 crop in H2, cutting carry-over stocks. S&P Global Commodity Insights listed the following CIF quotations in the week ending 13 April 2023:
Vietnamese black pepper: $3,400/metric ton for min 500 g/l, stagnant month-on-month and 28% less y/y
Vietnamese white pepper: $5,000/t for min 500 g/l, $50 up m/m and 28% less y/y
Indonesian black pepper: $3,900/t for Lampong min 550 g/l (stagnant m/m and -19% y/y)
Indonesian white pepper: $6,200/t for Muntok FAQ (+3% m/m and -17% y/y)
Malaysian black pepper: $3,800/t for Sarawak black label (stagnant m/m and -22% y/y)
Malaysian white pepper: $6,000/t for Sarawak faq (stagnant m/m and -19% y/y)
Brazilian black pepper: $3,400/t for grade 1 (+3% m/m and -23% y/y)
Apr 19 - Germany’s sugar production ends down at six-year low in 2022-23 (IHSmarkit)
- Germany produced only 3,865,245 metric tons of beet white sugar in the 2022-23 campaign, down 15.0% from 4,547,150 last year and the lowest since 2016-17, the German Sugar Industry Association (WVZ) said.
- Beet deliveries to the factories fell 13.4% to 25.362 million tons from 29.283 million a year ago as a sharp drop of the beet yield more than offset a slight increase of the area under cultivation. The average beet yield dropped 14.7% to 70.3 metric tons per ha from 82.4 a year ago and the sugar content of the beets decreased to 17.53% from 17.58% last year. This was both significantly below five-year averages of 75.1 tons per ha and 17.98%, respectively. This resulted in a theoretical sugar yield per ha of only 12.32 tons, down from a very high 14.49 last year but also below the five-year average of 13.47.
- Area under cultivation was up 1.6% at 360,691 ha from 355,164. The numbers include the sugar equivalent of beets processed into ethanol.
Apr 19 - Indian coriander seed prices declined further on positive production view (IHSmarkit)
- Subdued demand in the domestic market
- Sharp upturn in arrivals will add to downward pricing pressure
- Indian coriander seed (dhaniya) prices traded extended losses this March following the higher production outlook for 2023.
- In its monthly Spices Report Indian firm SMC Global Securities observed that increased imports from Russia and heavy stocks kept the demand subdued for coriander seed in the domestic market. Prices have fallen by more than 45% from the peak of 13,000 Indian rupees ($158.58) per quintal reported in April 2022, the company noted.
Price outlook
- Indian coriander seed May prices on the National Commodity and Derivatives Exchange are likely to trade sideways to down due to surging arrival pressure at major trading centers, SMC Global Securities forecast.
- Millers and stockists are avoiding bulk buying in expectation of a further fall in prices. Overall production of Indian coriander seed is estimated to be higher by about 18-20% this year due to larger area that will drive the prices down due to higher supply outlook. However, losses are likely to be limited in view of yield losses in Rajasthan caused by unseasonal rainfall and hailstorms this March, SMC Global Securities stated.
- Overall production is likely to be revised down due to recent crop damage in Rajasthan. Technically, prices are likely to find support near 6,000-6,100 rupees/quintal and can witness upside recovery from those levels.
- Prices are expected to honor the resistance of 7,500 rupees/quintal.
Apr 18 - Ivory Coast’s cocoa grinding rise 32.9% on year (IHSmarkit)
- Cocoa price hits 6-1/2-year high
- Cocoa arrivals at Ivorian ports down 7.1% y/y
- Below average rainfall is expected to impact the mid-crop
- Cocoa futures in London rose to 2,240 pounds per metric ton on Monday, the highest level since October 2016. Prices maintained the bullish trend amid a tight supply in the nearby market and increased demand.
- In the top producer Ivory Coast, cocoa arrivals at ports have been well behind last season's pace. Total volume of cocoa port arrivals reached 1.829 million metric tons by April 16 since the start of the season on October 1, down 7.1% from the same period last season, according to Reuters. The volume of Ivory Coast’s cocoa grinding was up 32.9% year-on-year in March at 69,567 metric tons, according to data from the exporters association GEPEX. This brought total grinding volume in the 2022-23 season so far to 361,762 metric tons, up 15.3% from the same period a year ago.
- Below-average rains last week in most of Ivory Coast’s cocoa growing regions raised fears of tight supply and poor quality for the April-to-September mid-crop, Reuters reported.
Apr 18 - Rally in Indian cumin seed prices (IHSmarkit)
- 23% m/m increase in spot prices
- Futures prices for deliveries from April-July 2023 rose by 29% m/m
- Indian cumin seed prices are not finding a ceiling after being stabilized at highs between January-February 2023. Unseasonal rainfalls are delaying harvests in Gujarat and Rajasthan (both in the North West), having damaged orchards in both, according to the Indian firm SMC Global Securities in its latest market update. Indian cumin seed spot prices averaged 40,478 Indian rupees per quintal ($494.5/quintal) at the Unjha market (Gujarat) on 17 April 2023, 23% more month-on-month and 84% more y/y.
- Prices were stabilized at highs when the cumin harvest was close to concluding as the 2022-23 crop is projected to grow by 7% y/y to 434,500 metric tonnes.
- Indian cumin seed exports reached 8,717 tonnes valued at $25.8 million in January 2023, 41% less y/y in volume and 18% less y/y in value, according to customs data.
- Bangladesh, Brazil and the US were the main importers of whole cumin seeds (95% of the exported volume), accounting for 18%, 9% and 8%, respectively.
Apr 18 - Bullish prices for Indonesian cloves with harvest delayed due to rains (IHSmarkit)
- 2% y/y fall in Madagascan clove prices
- Indonesia’s clove commercial season is close to reaching its key period after the Ramadan festival although harvesting is delayed due to heavy rains, strong demand pushing up prices, according to trading sources.
- Indian purchasers and the domestic cigarette industry have a strong demand for cloves.
- Madagascar
Madagascan farmers and exporters are waiting for higher prices, holding stocks.
Madagascar cloves were quoted at $8,800/metric ton CIF EMP, stagnant month-on-month and 2% less y/y
- Sri Lanka
The Sri Lankan harvest has finished. International demand is quiet, waiting for the Indonesian industry to start shipping cloves between June-July.
Apr 17 - Brazil's 2023/24 coffee crop looking good, 65 mln-bag view reasonable - report
The 2023/24 Brazilian coffee crop, whose harvest is about to start, is looking healthy and able to deliver good yields, indicating that a market-consensus view of an output around 65 million 60-kg bags is reasonable, a report said on Friday. According to Florida-based consultancy Coffee Trading Academy (CTA), whose analyst Igor Bragato toured some coffee areas last week, the Brazilian 2023/24 coffee crop "will not break any records, but it does look to be a substantial improvement over 2022/23 and a very healthy off-year".
Apr 14 - Asia Coffee-Vietnam supplies thin as farmers run out of beans (Reuters)
- Trade in Vietnam’s coffee market was hit by a beans shortage as farmers had almost no beans left to offer, traders said on Thursday, while Indonesian farmers refrained from selling hoping the prices could rise in the near future. Farmers in the central highlands, Vietnam's largest coffee-growing area, sold beans at 49,400 dong to 51,500 dong ($2.11-$2.20) per kilogramme, compared with 48,800 dong to 51,000 dong range offered a week ago.
“Farmers have almost nothing left to sell while there is still demand,” said a trader based in the coffee belt.
“Coffee trees of the new crop year are growing but if it doesn’t rain next month, the trees will face drought.”
- July robusta coffee gained $58 over the past week, settling at $2,332 as of Wednesday’s close.
- Vietnam’s coffee exports in March stood at 210,372 tonnes, up 5.2% from the month before, government customs data showed. Coffee export revenue for the month reached $482 million, up 10.9% against February. Traders in Vietnam offered 5% black and broken-grade 2 robusta at a premium range of $40-$50 per tonne to the July contract, unchanged from last week.
- Meanwhile, in Indonesia’s Lampung province, one trader offered Sumatran robusta beans at $100 premium to the July contract, higher than last week’s $80 premium to the same contract. Supplies built up from the current mini harvest, but traders said farmers refrained from selling on relatively low prices.
“Farmers are hoping for better prices so they are not releasing many beans,” one trader said. Another trader offered $150 to $160 premium to May to June contract, unchanged from last week.
Apr 13 - TMO still absent from hazelnut market (IHSmarkit)
- Supply remains low
- Most large confectioners and retailers thought to be covered for Q2-Q3
- The Turkish Grain Board (TMO) did not intervene in the country’s hazelnut market this week despite expectations that it would do so.
Olivier Telvi of UK trader Ronly Gida UK Limited, which represents Turkish hazelnut processor Ronly Gida, remarked that this absence of the TMO has prompted new rumours that it will not make an announcement until after the election.
“The upcoming election keeps the whole country in a state of anticipation which also effects the hazelnut market with sellers holding their material as a euro/US dollar hedge in the face of a potential Turkish lira collapse in Q2,” Telvi added.
In its latest market report Olam Nuts observed: “Most of Turkey experienced a cold spell last week. The freezing temperatures indeed have had some impact on the hazelnut growing regions as well, but only in small pockets. While the exact damage is still being ascertained, we can safely assume that the impact is not widespread, and the crop growth will be normal in most areas in Turkey.”
- Despite a large crop estimate of 850,000 metric tons by the Black Sea exporter’s association and continued weak demand, Turkey market witnessed some strengthening.
Supply continues to be low, and farmers do not wish to sell their balance inventories. Trades are being concluded around TRY114-115 ($5.90-5.95) per kg. In-shell availability remains constrained, thereby limiting any downside to the prices.
Olam Nuts noted that the Turkish lira has been slightly weak and has crossed the TRY19.25/$1.00 mark. The market expects greater volatility as the election period approaches.
Apr 13 - Brazilian coffee exports fall to five-year low in March 2023 (Cecafe & IHSmarkit)
- Brazil exported 2.781 million 60-kg bags of green coffee in March 2023, down sharply from 3.451 million in the same month last year, according to data from exporters association Cecafe. Exports of arabica coffee were down at 2.674 million bags from 3.315 million a year ago, while robusta shipments decreased to 107,267 bags from 135,661. This brought total green coffee exports in the now-completed 2022–23 (April–March) crop year to 33.226 million bags, down from 35.852 million shipped in 2021–22 and as much as 42.077 million in 2020–21.
- Shipments of roast and ground as well as soluble coffee were down at 307,110 bags in March 2023 from 364,581 a year ago, which means that Brazil's total coffee exports during March fell to a five-year low of 3.088 million bags from 3.815 million a year ago.
- Brazil’s total coffee exports in coffee year 2022–23 decreased to 36.942 million bags from 39.951 million a year earlier and 46.228 million in 2020–21. Cecafe also said that the drop in March reflects the off-season of the biennial production cycle and reduced stocks after two smaller harvests in 2021 and 2022, which were substantially affected by a long drought followed by the worst frost in the last 27 years.
- However, March shipments were 9% higher than in January and 27% higher than in February as narrower differentials against "C" coffee futures encouraged producers to accelerate the marketing of the remaining coffee. It is possible that this will minimize the drop in volumes in the April-June quarter, it was added.
Apr 13 - Sharp fall in Nigerian sesame seed exports (IHSmarkit)
- 31% y/y fall in exported volume
- China was the main importer, accounting for 32% of the volume
- Nigeria’s 2022 sesame seed exports fell by 31% year-on-year to 297,000 metric tons but increased by 19% in value to $329.0 million, due to rising prices. The FOB price averaged $1,753/t, 26% more y/y.
The main importers were China, Greece and Japan, accounting for 32%, 28% and 16%, respectively of the volume. Greece became a re-exporter of Nigerian sesame in eastern Europe and the Middle East, cleaning the seeds.
Traditionally, sesame is cultivated in northern origins, farmers alternating sesame seeds and sorghum every season.
Currently, sesame seeds are the main exported agricultural commodity in Nigeria, overtaking cashews and ginger.
Apr 13 - Slight fall in Spanish almond prices (IHSmarkit)
- Fall in prices average 5-10 euro cents
- Main importers: France, Germany and Italy
- The Spanish almond market has been quiet and prices fell due to the bearish trend led by California, according to the Spanish trader Hispania Nuts in its latest market update.
DDP Prices average €4.15/kg ($4.54/kg) for Comunas and €4.20/kg for Guaras in March, down from €4.30/kg for both in February.
Organic almonds were quoted at €6.50/kg, most players considering they will be stabilized at this level. Wholesale prices for Marconas closed at €6.60/kg in March, five cents less than in February.
- Seasonal almond products exports (kernels plus flours and creams) totalled 65,680 metric tons from August-December 2022, 9% less year-on-year. The main importers were France (15,071 metric tons, -14% y/y), Germany (14,729 metric tons, -7% y/y) and Italy (11,343 metric tons, -7% y/y).
Apr 11 - France’s fresh potato prices remain pricey (IHSmarkit)
- The price remained at €790 per metric ton fob ($862.51/t fob) (+27% y/y) since late March
- Europe sees a tight market for good quality potatoes
- France’s exports expanded by 18% y/y in 2022
France’s fresh potato prices remain elevated and firm in April amid a tight market for quality produce.
Yellow skin washed potatoes, class one, +35mm box (12.5 kg), stood at a 12-month high of €790 per metric ton fob ($862.51/t fob) (+27% y/y) at France’s Rungis wholesale market between 22 March-6 April. The 12-month lowest point of €600 occurred in the period of late April to mid-June in 2022. In early September 2022, the price surged by 25% m/m to €750/t fob. The market transaction was described as “lively in anticipation of the Easter weekend” on 6 April.
French early organic potatoes were quoted at €4.36 per kilo in late March, up 6% y/y.
In late March, the flows on the market went down to all destinations, including to Spain, where buyers seem more interested in lower priced Egyptian offering.
A Belgian source commented that: "There are Egyptian early potatoes on the eastern and southern European markets and some Cypriot ones in Belgian stores. We'll try to work with local crops for as long as possible, but the early potatoes have to fill the gap somehow. These potatoes always characterize the period around Easter.”
The challenging growing season means many European packers struggle to control quality of potatoes in the cold store. “Monitoring storage quality and getting the right batches out at the right time is vital. Though, I think that's the general market situation,” he added.
France exported over 2.9 million metric tons of fresh potatoes in 2022, 18% up y/y, with Belgium accounting for over one third of the total exports. France’s shipments to most main European markets increased significantly y/y in 2022
Apr 11 - Ivorian cashew shipments at lows in early harvest stage (IHSmarkit)
- Indian importers set to raise imports of African raw cashew nuts
- Bumper crops in west Africa might cut prices
Ivory Coast’s cashew crop flows are slowing at an early harvest stage. Meanwhile, Vietnamese are close to purchasing the Cambodian crop and Indian traders will continue to import African raw cashew nuts (RCNs), as its domestic crop does not match the demand from processors, according to Olam Nuts in its latest market update.
The kernel prices have increased by 3% month-on-month as the Indian and Vietnamese processor are focused on supplying the spot demand to avoid logistics bottlenecks.
Olam considers that prices for kernels will be bullish as the kernel availability has not improved and processors are purchasing hand-to-month. On the other hand, bumper crop in west Africa might push down prices for RCNs in the mid and long-term.
Grade A BRC packers were selling WW240 at $2.70-2.73/pounds fob and WW320 at $2.55-2.58/pounds fob for May and June shipments in the week ending on 10 April, both quotations stagnant m/m, according to the Vietnamese trader Golden Bridge in its latest market update.
Apr 10 - Slight fall in Indian guar gum spot prices (IHSmarkit)
- 22% y/y fall in guar gum exports in January 2023
- Gradual recovery in futures prices for deliveries between August-September 2023
India’s guar gum spot price averaged 11,499 Indian rupees per quintal ($140.3/quintal) at the Jodhpur wholesale market on 10 April 2023, 4% less month-on-month and 7% less year-on-year.
Indian guar gum exports started weak in 2023, with 15,570 metric tonnes valued at $31.7 million, 22% less y/y in volume and 19% less in value. The main importers were the US, Russia and Germany, accounting for 35%, 16% and 10%, respectively, of the volume.
Apr 10 - Monthly Prices Report: Seeds and Pulses (IHSmarkit)
- Beans
In its March 2023 report, the USDA’s 2022 dry edible bean production remained unchanged at 1.17 million metric tons, up 14% y/y from 1.03 million mt in 2021. In March 2023, the EU estimated its broad/field bean production to increase 3% y/y from 1.13 million mt in 2021 to 1.16 million mt in 2022 and forecasted the figure to increase another 8% y/y to 1.25 million mt in 2023.
Amid rising bean production, producer prices for dark red kidney beans EXW US fell 2% y/y from $46.5/cwt in February to $45.67/cwt in March. In March, average prices for the black eye, black turtle, Cannelini 'Alubia', and dark red small kidney 'Type' varieties remained unchanged at GBP 1,165, 1,595, 1,204, and 981/mt, respectively.
Chickpeas
- Canadian chickpea prices fell on increased production, despite smaller areas. Canada’s chickpea production rose 41% y/y from 91,000 metric tons in 2021/22 to 128,000 metric tons in 2022/23 and is projected to grow another 33% y/y to 170,000 metric tons in 2023/24. Canadian 9mm Kabuli chickpea prices CPT Saskatchewan dropped 11% m/m from $804/mt in February to $717/mt in March. Similarly, prices for the same variety on a FCA Saskatchewan basis fell from $52.19/cwt in February to $49.65/cwt in March, down 5% m/m. Prices for 7-8mm chickpeas EXW United Kingdom fell 9% m/m from GBP1,395/mt in February to GBP1,275/mt in March.
- Lentils
Canadian lentil prices were mixed amid increasing production. Canada’s lentil production surged 44% y/y from 1.59 million mt in 2021/22 to 2.30 million mt in 2022/23 and is expected to increase 15% y/y further to 2.65 million mt in 2023/24.
- Canadian red lentil prices FCA Saskatchewan rose 11% m/m from CAD30.75/cwt in February to CAD34/cwt in March. Canadian large green lentil prices also increased from CAD48.81/cwt in February to CAD51.5/cwt in March, up 3% m/m. Prices for Canadian small green lentils dropped from CAD46/cwt in February to CAD44.7/cwt in March, down 3% m/m.
Price Focus
- Canada’s total chickpea supply is expected to fall amid low carry-in stocks and steady increase in production. Prices have been decreasing over the past couple of months but are expected to stay higher than last year, due to lower global supplies of chickpeas.
- Canada’s lentil output projections are favorable, with production forecast to rise in two consecutive crop years, contributing to total supply. As such, prices are expected to decrease due to higher world supply and carry-out stocks.
Apr 07 - Asia Coffee-Domestic prices edge higher in Vietnam on scarce supplies (Reuters)
- Vietnamese coffee prices rose this week tracking higher prices in London due to limited stocks, while premiums dropped in Indonesia after trading activities started to increase, traders said on Thursday. Farmers in the central highlands, Vietnam's largest coffee-growing area, sold beans COFVN-DAK at 48,800 dong to 51,000 dong ($2.08 to $2.2) per kilogramme, compared with last week's 47,700 dong to 48,800 dong range.
“Domestic prices reached highest level in years due to the scarcity of the beans,” a trader based in the coffee belt said.
“Farmers are not selling. Growers are turning to other trees such as passion fruit for better profit.”
- July robusta coffee gained $84 over the past week, settling at $2,255 as of Wednesday’s close.
“The increase in domestic prices was in line with London movement,” another trader based in the area said. “Only those who were in need of beans seal the contract at the moment as prices are high now.”
- Traders in Vietnam offered 5% black and broken-grade 2 robusta at a premium range of $40-$50 per tonne to the July contract, up from the $20-$30 premium range last week.
- Indonesia’s Sumatran robusta coffee beans were quoted at an $80 premium to the July contract this week, a drop from the $160 premium last week.
“Prices fell as trading has started to flourish and terminal prices are rising,” a trader said.
- Another trader said that for the May-June contract, beans were offered at a $150-$160 premium range, down from last week’s $160-$170 premium.
Indonesia shipped 12,016.6 tonnes of Sumatra robusta coffee beans from Lampung province in February, data from the local trade office showed. ($1 = 23,451 dong)
Apr 05 - Bolivia strengthens its sesame industry with record revenues in 2022 (IHSmarkit)
- 7% y/y increase in revenues in 2022
- Main importers: China and Japan
- Bolivia’s 2022 sesame seed exports reached 12,030 metric tons valued at a record of $23.8 million, 9% less year-on-year in volume and 7% more y/y. The main importers were China, Japan and the Netherlands, accounting for 33%, 12% and 12%, respectively, of the volume.
- Bolivia started to expand sesame production in 2018, farmers being encouraged by agreements between the former and China to export other agricultural commodities such as sesame. In addition, rising prices have accelerated this trend, once Paraguay focused on supplying markets willing to pay high prices for high quality product, such as South Korea, Japan and Taiwan and Brazil, the latter doing this by relying on its free trade agreement with India.
- A sharp fall in the Paraguayan sesame seed supply due to severe drought in recent years has favored Japan and EU members increasing their imports, Bolivia exporting to the EU through the Paraguay river (Plata basin) as Paraguay does and to Japan through Peruvian and Chilean ports in the Pacific Ocean.
Apr 04 - Honduran coffee exports rise 14.4% in March 2023 (IHSmarkit)
- Honduras exported 841,411 60-kg bags of coffee in March 2023, up 14.4% from 735,246 in the same month last year, according to preliminary data from the National Coffee Institute (IHCAFE). An IHCAFE official attributed the increase during the month to higher global demand. This brought total exports in the first six months of 2022–23 (October–September) to 2.218 million bags, which is in line with the 2.225 million shipped in the same period a year ago.
- Honduras plans to export some 5.52 million 60-kg bags of coffee during the current 2022–23 season, up from 4.70 million shipped in the previous harvest.
Apr 03 - Cocoa arrivals at Ivorian ports are expected to pick up from mid-April (IHSmarkit)
- Cocoa futures hit the highest level since 2020
- Ivory Coast’s cocoa arrivals at ports down almost 5% y/y
- Last week, NY cocoa prices rose to the highest level since 2020 of $2,963 per metric ton as port arrivals in Ivory Coast decreased compared to last year’s numbers.
- Cocoa arrivals at Ivorian ports reached 1.779 million metric tons as of March 31 since the start of the season on October 1, down 4.8% from the same period last year, Reuters reported.
- However, below average rain mixed with sun last week in most of Ivory Coast’s cocoa growing regions provided good conditions for the start of the April-to-September mid-crop. Recent rains in the country have improved the soil moisture content which will help the crop develop well, according to local farmers. With that being said, farmers estimate that significant volumes of cocoa beans will start arriving at ports from mid-April.
Apr 03 - IFE 2023: Vanillabazaar raises concerns over trade flows from Madagascar
- Government controls are proving challenging
- Company pleased to exhibit at the IFE though
- There is underlying demand for vanilla but the political situation in Madagascar (such as stringent rules on exports etc. and the setting of a minimum export price) is hampering trade flows, Sakina Jodiyawalla (pictured below), director of Vanillabazaar told S&P Global Commodity Insights at the IFE (International Food & Drink Event) last month.
“A lot of product is being kept as stock,” Jodiyawalla observed. “The western world wants the price to be lower (than the government’s set minimum export price of $250 per kilo). Only 200 tonnes has been exported by Madagascar since November to now, so there are big questions and it is worrying.”
- The Madagascar vanilla market has been subjected to stringent government controls since summer 2022. The official minimum export price for vanilla beans was set at $250 per kilo but it is well known that former trading took place at lower levels than this. In January 2023, trade sources reported that the average price was probably around $175/kg fob.
- Madagascar tax office officials have insisted that each of the country’s vanilla exporters must be in full compliance with domestic laws in terms of foreign currencies repatriation and corporate income tax based on the imposed minimum export price. In view of the fact that most exporters had not sold at the real minimum price, the fees some are having to pay are hefty, sometimes counting for millions of US dollars.
- Jodiyawalla noted that elections are coming up in Madagascar this November and one topic of debate is whether there be a price crash on the country’s vanilla. In the meantime, a few stakeholders are trying to control the market. “It is difficult to plan because you don’t want to be sitting on a lot of stock only to find that the price has crashed,” she added. Vanillabazaar is a regular IFE exhibitor. “It’s always good to be here,” Jodiyawalla remarked. “We’ve got a couple of good leads to follow up on after the show.”
Apr 03 - White sugar futures hit six-year high
- White sugar futures in London hit six-year-high on March 28 with the most-active May contract touching $619.40 per metric ton in the course of the session before settling at $616.20/t. The prices were supported by concerns over scarce near-term supplies and strengthening crude oil prices.
- In New York, raw sugar futures also posted significant gains in recent days as lower-than-expected crops in India, Thailand and EU continued to underpin prices, according to Reuters. However, the most-active May contract ended six points down at 21.25 cents per pound on March 29 compared to the previous session, due to the near start of the harvest in the Centre-South region of Brazil, which is expected to progress faster than last season as the weather has dried up.
- S&P Global Commodity Insights lowered its estimate for the 2022/23 (October/September) world sugar surplus to 1.0 million metric tons (MMt) from 2.7 MMt in the previous forecast published in February. Global sugar production is seen at 190 MMt, 1.9 MMt less than before due to downward revisions of the production for China, India, Mexico, and Russia. Meanwhile, the consumption estimate is now seen 0.2 MMt higher than before at 188.2 MMt.
Apr 03 - Czech poppyseed prices stabilized despite weak demand
- Czech blue poppyseed prices have stabilized despite weak demand, as farmers cut the planted area due to rising prices for other crops such as sunflower or rapeseeds once the Russia-Ukraine war started, according to trading sources.
- Traditionally, eastern European countries increased their demand for poppyseeds in the weeks before Easter (bakery and confectionery). However, high prices have slowed sales and farmers have started to plant the new season when there are still around 6,000-7,000 metric tons of poppyseeds warehoused.
- The Czech blue poppyseed crop has been gradually falling due to severe drought in recent years, dropping from around 30,000t to 19,000t from 2020-22.
- Cfr European blue poppyseed price averaged US$3,395/t in March 2023, stagnant month-on-month and slightly down from $3,368/t in March 2022, according to S&P Global Commodity Insights.
Mar 31 - IFE 2023: Natural Vanilla promotes range of extracts and pastes
- Product grown in Papua New Guinea but manufactured in Australia
- Stand visitors keen on sugar-free vanilla extract offering
- Premium vanilla extracts and pastes were promoted by Natural Vanilla of Australia at the IFE (International Food & Drink Event) last week (20-22 March).
- The company produces its products from vanilla grown in Papua New Guinea. Owen Henderson (pictured below), managing director and founder of Natural Vanilla told S&P Global Commodity Insights that the quality of Papua New Guinea’s vanilla has improved significantly in recent years and is now to a favorable level, making it a viable alternative to that from Madagascar. The firm was promoting its five main liquid vanilla products and four types of vanilla powders.
- Henderson added that the company’s sugar-free vanilla extract was attracting a lot of interest at the show.
“We’re more focused to foodservice – such as bakeries and food manufacturers – and we’ve had a few of these enquiries,” he explained. “People are quite happy to try something different from Madagascar vanilla.”
- Papua New Guinea’s vanilla uses the Tahitian vanilla pod, which Henderson described as having a fruitier flavour profile than other types of vanilla. This was Natural Vanilla’s first time exhibiting at the IFE but it has had a UK sales office for the last five years. Henderson added that the volume of UK sales are large enough now to warrant setting up stocks in the country. Export volumes in general are increasing, he said.
Mar 30 - Asia Coffee-Thin supplies in major Asian robusta producers (Reuters)
- Coffee supplies tightened in Vietnam this week as farmers who had already sold most of their stocks refrained from releasing the remaining beans, while rainfall in Indonesia hit output there, traders said on Thursday.
Farmers in the central highlands, Vietnam's largest coffee-growing area, sold beans at 47,700 dong to 48,800 dong ($2.03-$2.08) per kilogramme, compared with 46,000 dong to 48,500 dong range a week ago.
- Traders in Vietnam offered 5% black and broken-grade 2 robusta at a premium range of $20-$30 per tonne to the July contract. Traders offered a $10-$20 discount range last week to the May contract.
“Demand is healthy, but both Vietnam and Indonesia have very few beans to offer,” said a trader based in the coffee belt.
“We are monitoring the weather condition closely to prepare for possible drought this year. At this point it hasn’t rained yet.”
- July robusta coffee settled down $9, at $2,145 on Wednesday.
- Coffee exports from Vietnam are estimated to have decreased 1.6% in the first quarter of 2023 from a year earlier to 572,000 tonnes, equivalent to 9.5 million 60-kg (130-pound) bags, official data showed.
- In Indonesia, Sumatran robusta coffee beans this week were offered at $160 premium to the July contract, up from a $70 premium to the May contract last week.
“Higher price was because of limited supplies. Exporters are fighting over coffee in the market,” the trader said. “Rainfalls were the reason for beans scarcity and shorter harvest time.”
- Another trader said for the May-June contract, the beans were offered at a $160-$170 premium range, up from last week’s $100-$120 premium, as the rupiah strengthened, while local exporters could also sell at $200 for May contracts. ($1 = 23,484 dong)
Mar 27 - Market Briefing: Cocoa (IHSmarkit)
- Ivory Coast cocoa grinding up 16% y/y
- Nigerian cocoa exports down by almost 6% y/y
- NY cocoa futures hit 2 1/4 year high
Production
- Cocoa arrivals at ports in Ivory Coast reached 1.706 million tonnes as of 12 March since the start of the season on 1 October, down 4.8% from the same period last season, indicating tight supplies in the short term, according to Reuters. However, recent rains indicate a potential recovery of local output. S&P Global Commodity Insights expects arrivals to accelerate from April onwards.
Demand
- Ivory Coast’s cocoa grind rose 16% year-on-year in February to 58,452 tonnes, according to the exporter’s association GEPEX. This brought total grind from the start of the 2022/23 season on 1 October to 292,195 tonnes, up almost 12% from last season.
Trade
- The Cocoa Association of Nigeria reported that Nigeria’s January cocoa exports fell 5.9% year-on-year to 43,405 tonnes. Nigeria is the world’s fifth-largest cocoa bean producer.
Prices
- Cocoa prices posted gains this week with the New York cocoa futures climbing to a 2-1/4 year high of $2,874 per tonne on Wednesday. This rise was attributed partly to a slump in the dollar index on the same day. Also, lower exports from Nigeria and a tight supply from Ivory Coast have supported cocoa prices this week. However, cocoa futures in New York ended $6 lower on Thursday at $2,868 due to the dollar recovery.
- Cocoa futures also declined in London after the British pound rallied to a 7-week high against the dollar. The benchmark May contract settled down 26 pounds at 2,120 pounds per tonne on Thursday.
Mar 24 - Indian cashew processors set to focus on the domestic market
- 4% fall in Indian cashew exports in January 2023
- Record RCN imports of 1.37 million tonnes in 2022, 57.3% more y/y
Indian cashews export data reveals that the domestic market is gradually raising its weight against exports.
The country’s cashew exports this January reached 4,497 tonnes valued at $33.4 million, 4% less year-on-year in volume and 11% less in value, after dropping to 45,740 tonnes (-15% y/y), $33.4 million (-11.5% y/y) worth in 2022, a record-low.
The main importers in January 2023 were the UAE and Saudi Arabia, accounting for 43% and 11%, respectively, of the volume, as their traders started to replenish stocks to cover consumption during the Ramadan festival. Imports recorded 49,350 tonnes in January 2023, 41% more y/y, with Tanzania supplying 38.725 tonnes (+90% y/y), 78.4% more y/y. Imports reached a record of 1.37 million tonnes of raw cashew nuts (RCNs), 57.3% more y/y.
India’s domestic consumption is exceeding pre-Covid 19 levels and fuelling imports of African RCNs, pushing up prices, making exports focused on the Middle East due to logistics proximity.
Mar 23 - Uganda’s coffee exports rise 6.3% in February 2023 (IHSmarkit)
- Uganda exported 478,646 60-kg bags of coffee in February 2023, up 6.3% from 450,412 in the same month last year but below a forecast of 480,000 bags issued last month, the state-run Uganda Coffee Development Authority (UCDA) said. February’s shipments consisted of 373,559 bags of robusta (up 5.8% from 353,039 a year ago) and 105,087 bags of arabica beans (up 7.9% from 97,373 bags).
- This brought total coffee exports in the first five months of 2022-23 (October-September) to 2,293,683 bags, which is still down 4.5% from 2,400,452 bags in the same period last year due to poor shipments in the first three months of the season. Robusta coffee exports are down 5.3% so far this season at 1,878,710 bags from 1,984,433, while arabica shipments are only fractionally lower at 414,973 bags compared with 416,019.
- UCDA projected coffee exports to reach 458,000 bags in March. The main harvesting season in central and eastern regions, which started in October, will be at its tail end. Exporters are likely to continue to draw down stocks to fulfill contractual obligations with buyers abroad, it said. Prospects for the harvest in March-June are seen favourable, owing to above-average rainfall in most parts of Uganda in late 2022. The month of February was characterized by dry spells across all coffee growing regions, causing moisture stress on newly planted coffee, it added. Northern and Greater Masaka were extremely dry with blowing dry winds and few scattered showers in Greater Masaka. The South western region received generally near normal rainfall across the sub regions.
Mar 22 - Sri Lankan desiccated coconut prices above the Indonesian herald a falling market share (IHSmarkit)
- 17% fall in Sri Lankan exported volume
- Sri Lankan prices were 9% higher than the Indonesian in February
- Sri Lankan desiccated coconut exports were weak in January-February 2023 as prices for fresh coconuts are rising due to supply shortages, pushing up quotations for processed products such as desiccated coconut or coconut milk.
- Indonesian desiccated coconut might recover its global market share lost against the Sri Lankan in Q2-Q3 2022, when the latter experiences a sharp fall in its domestic exchange currency, cutting its international prices.
- Sri Lanka’s desiccated coconut exports reached 5,000 tonnes valued at $9.5 million in January-February 2023, 17% less year-on-year in volume and 42% less in value, due to fresh supply shortage and prices stabilised at highs. The main importers were India, the UAE and the US, which accounted for 17%, 13% and 9%, respectively, of the volume.
- The fresh price averaged LKR82.2 ($0.24) per coconut in coconut auctions held on 16 March, 2% more month-on-month and 27% more y/y.  Wholesale desiccated coconut prices ranged from LKR515-590/kg, stagnant m/m, and from LKR535-600/kg for medium (also unchanged m/m) on 7 March, according to the Sri Lankan Coconut Development Authority.
Sri Lankan desiccated coconut price averaged $1,527/tonne fob in February, 7% less m/m and 37% less y/y.
Philippines and Indonesia
- Philippines and Indonesia are the main global suppliers of desiccated coconut. Philippine exports rose by 12% y/y in volume to 156,990 tonnes and by 58% in value to $369.9 million in 2022. The main importers were the US and the Netherlands, accounting for 27% and 21%, respectively, of the volume.
- Philippine prices averaged $1,874/tonne fob in February 2023, stagnant m/m and 31% less y/y.
- Indonesian international sales fell by 21% y/y in volume to 110,455 tonnes valued at $149.4 million in 2022. The main importers were Singapore, Germany and Russia, accounting for 28%, 8% and 6%, respectively. Indonesian prices averaged $1,400/tonne fob in February, stagnant m/m and 36% less y/y.
Analysis
- Weak prices for Sri Lankan desiccated coconut due to the fall in rupee value against the US dollar fuelled exports against Indonesia, which traditionally sold with discounts against Philippines and Sri Lanka. This trend is changing with Indonesian prices below the Sri Lankan, as the former is suffering a fresh supply shortage and it needs to import fresh coconut for processing.
Mar 21 - Gradual growth in Indian cumin seed prices after being stabilised at highs (IHSmarkit)
- Futures prices for deliveries from March-June 2023 rose by 9-11% m/m
- 41% y/y fall in whole cumin seed exports in January 2023
- Indian cumin seed prices are not finding a ceiling after being stabilised at highs between January-February 2023. Carry-over stocks are cleared out and prices are starting the bullish trend forecast previously. Indian cumin seed spot prices averaged INR 32,833 per quintal ($ 398.1/quintal) at the Unjha market (Gujarat, North-West) on 21 March 2023, 7% more month-on-month and 59% more y/y.
- Prices have stabilised at highs when the cumin harvest is close to concluding and prices falling because the 2022-23 crop is projected to grow by 7% y/y to 434,500 tonnes. However, prices may start a bullish trend in Q2 as carry-over stocks are at minimums of 30,000 tonnes, 66% less y/y due to a disappointing 2021-22 output. Cumin seed exports reached 8,717 tonnes valued at $25.8 million in January 2023, 41% less y/y in volume and 18% less y/y in value, according to customs data. Bangladesh, Brazil and the US were the main importers of whole cumin seeds (95% of the exported volume), accounting for 18%, 9% and 8%, respectively.
Mar 21 - Sugar : Half of Thai mills have finished crush
- Daily cane crushing has fallen to around 250,000 tonnes and Thailand's total cane crush hit 92.658 million tonnes as of March 19, up from 87.362 million processed by the same time last year, industry data show. This means that crushing has now passed last season’s total of 92.071 million tonnes.
- Sugar production has reached 10.998 million tonnes, raw value, which is 1.275 million more than was produced by the same time a year ago. Besides the larger amount of cane crushed sugar output is aided this season by a record sugar extraction rate of 11.87% in raw value terms, up from 11.13% a year ago. Some 24 out of 57 sugar mills had ended cane crushing by March 18. The rate of mill closures suggests that the total crush may reach around 95 million tonnes this season.
Mar 20 - Cocoa prices fall for the second straight week (IHSmarkit)
- Strong dollar pressures cocoa prices
- Recent rains in Ivory Coast indicates a potential output recovery
- EU cocoa paste price down 1.5% week-on-week
Despite the tight supply in recent weeks, cocoa prices ended lower last week due to strong dollar and overall weakness in commodity markets.
- Ivorian cocoa beans price fell to an average of EUR 2,657/tonne CIF Northern Europe last week, down 1.4% from EUR 2,690 the week before and also down 2.5% from two weeks ago. Unseasonably heavy rains in cocoa-growing regions, indicating a potential recovery of local output, have also pressured cocoa prices. The differential was flat at EUR 300/tonne.
- Similarly, Ghanaian cocoa beans ended 1.2% down at an average of EUR 2,714/tonne CIF UK from EUR 2,746 the previous week and 2.8% from EUR 2,793 two weeks ago. The differential price was flat at an average of EUR 350 per tonne compared to the previous week but was lower from EUR 360 recorded two weeks earlier.
- Cocoa bean from Nigeria fell by 1.4% last week, with an average of EUR 2,452/tonne CIF Northern Europe against EUR 2,487 the week before and 0.7% lower from two weeks ago. The Nigerian price differential remained at EUR 120 per tonne CIF Northern Europe, the same level since December.
- EU cocoa butter prices declined to an average of EUR 5,558/tonne CIF Northern Europe last week, down by 1.5% from a week ago.
- EU cocoa paste prices ended at EUR 3,983, also down by 1.5% from the previous week.
- Meanwhile, EU powder prices was flat at EUR 3,000/tonne.
Mar 17 - Asia Coffee-Vietnam domestic prices edge down, tight supplies in Indonesia (Reuters)
- Vietnam’s domestic coffee prices fell from last week following the global trend, while in Indonesia supplies from the ongoing mini harvest were scarce due to unfavourable weather, traders said on Thursday. Farmers in the central highlands, Vietnam's largest coffee-growing area, sold beans at 46,300 dong to 47,400 dong ($1.96-$2.01) per kg, down from last week's 47,400 dong to 48,500 dong range.
“That the global prices are falling following not very supportive news from banking sector has dragged down domestic prices although the impact on beans here was nominal,” said a trader based in the coffee belt.
“Farmers have very few beans left to offer and trade is still very tepid as no one is selling.”
- Another trader in the same region said coffee trees were blossoming while the weather remained dry.
“It’s still sunny at the moment but if it does not rain next month, it will be worrisome.”
- One trader in Vietnam offered 5% black and broken-grade 2 robusta at a discount of $20 per tonne to the May contract. Another trader offered the same price as the London price to the same contract.
- Meanwhile, Indonesia’s Sumatra robusta coffee beans this week were offered at a $135 premium to the July contract, compared with a $70 premium to the May contract.
“The increase was due to the drastic fall in London prices and the bean shortage during the mini harvest caused by heavy rains,” one of the traders said.
Another trader said coffee prices slightly changed this week, quoted at a $100 to $120 premium to the May and June contracts, compared with a $100 premium last week to the May contract.
Mar 16 - Daily Cocoa Futures Market Report (H.C.C.O)
Yesterday's worrying news from the Swiss banking sector almost exclusively affected the New York cocoa market. While investors see the US$ as a safe haven, the New York market came under pressure accordingly. The May 23 lost $56 in the session and found good support near the next support at $2600, ending with a loss of $42 and a close at $2616. London was unimpressed by the outside influences and ended the day down GBP -5 at GBP 2048. The New York downtrend was thus confirmed again, where we continue to see good support at $2600, followed by $2570. Since the beginning of this very selling wave and spurred on by the firm US$ , the May / May 23 arbitrage narrowed from GBP 186 LDN discount to now GBP -127.
Mar 14 - Indian guar gum prices stabilised at around INR12,000/quintal (IHSmarlit)
- 2022 saw a 13% y/y fall in Indian exports
- 9-11% fall in India’s futures prices for deliveries between July-August
- Mexico set to develop guar gum industry taking advantage of logistics advantage
- Indian guar seed spot prices have stabilised at around INR5,500/quintal ($67.0/quintal), stabilising guar gum prices at around INR 12,000/quintal due to subdued demand in the domestic market, according to the Indian consultant SMC Global Securities in its latest market update.
- India’s guar gum spot price averaged INR12,05.50 per quintal at the Jodhpur wholesale market on 13 March 2023, 1% less month-on-month and 4% more year-on-year.
- Indian guar gum exports rose by 13.0% y/y to 248,090 tonnes, valued at $489.6 million (+53% y/y) in 2022. The US (78,210 tonnes, +15.76% y/y), Russia (35,946 tonnes, +14.5% y/y) and Germany (29,553 tonnes, +11.9% y/y) were the main importers, accounting for 31%, 14% and 12% (volume), respectively.
Mar 13 - Arabica coffee prices fall on higher supply (IHSmarkit)
- Higher stocks pressure prices
- The ICO Brazilian Naturals group indicator falls 2.6% week-on-week
- Robusta coffee prices end almost flat
- Arabica coffee prices extended losses last week, due partly to near-term supplies from Brazil and Colombia. The ICO Brazilian Naturals group indicator fell 2.6% to USD1.89/lb from USD1.94 the previous week and 6.6% from five-month high USD2.02 two weeks ago, the highest level since October. In Colombia, the ICO’s mild arabicas group indicator decreased by 2.8% to USD2.26/lb from USD2.32/lb the week before and 7.4% from USD2.44/lb two weeks ago.
- The ICO’s other mild arabicas group indicator also ended lower last week at USD2.22/lb compared to USD2.30/lb the previous week and from USD2.38 two weeks ago. Arabica “C” futures on the ICE ended 2.5% lower at an average closing price of USD1.80/lb and 7.2% from two weeks ago, due partly to an increase on ICE certified arabica stocks.
- Meanwhile, robusta prices ended almost unchanged from the two previous weeks. ICE futures fell slightly to an average closing price of USD2,135/tonne, down 0.4% from USD2,144/tonne recorded a week ago. Meanwhile, the other mild robustas group indicator hardly changed from the previous week’s USD1.07/lb, settling at USD1.08/lb. The prices were supported tight supplies in Vietnam, according to Reuters.
Mar 13 - Global hazelnut supply estimate downgraded due to falling crops in Italy, Georgia and Spain (IHSmarkit)
- US hazelnut production estimate upgraded as domestic pests are under control
- Unfavourable weather and drought cuts yield in Italy and Spain
- The 2022-23 global hazelnut crop estimate has been downgraded by 16,800 (in-shell) tonnes to 1.368 million tonnes despite an excellent crop in the US, the fall being driven by Italy, Georgia and Spain, according to the International Nut and Dried Fruit Council (INC). The 2022-23 US hazelnut crop is projected at 72,400 tonnes, 17% more than the USDA estimate and 5% more year-on-year, thanks to excellent growing conditions, brown marmorated sting bug being under control. Oregon’s hazelnut industry, the main origin, has been focused on selling in the domestic market due to weak prices in Asia, particularly in China.
- Italy’s crop forecast has been cut by 10% to 90,000 tonnes (+80% y/y). Winter temperatures have been warmer than usual, cutting slightly the average yield.
- Important origins such as Georgia and Spain have been also reduced. Georgia’s estimate has been lowered by 28% y/y to 40,000 tonnes due to unfavourable weather and Spain by 33% to 7,000 tonnes (+40% y/y) due to severe drought.
- Turkey’s crop estimate is still forecast at 830,000 tonnes (+5% y/y), projecting carry-over stocks of 120,000 tonnes (+14% y/y). The INC reported that Turkish prices rose by 30% m/m between January-February, slowing exports.
Mar 09 - Asia Coffee-Tight supplies in Vietnam; Indonesia prices rise (Reuters)
- Trading activities remained dull in Vietnam due to a lack of beans as farmers refrained from releasing remaining stockpiles, while prices rose in Indonesia as unfavourable weather hit mini harvest supplies, traders said on Thursday. Farmers in the central highlands, Vietnam's largest coffee-growing area, sold beans at 47,400 dong to 48,500 dong (2.00 to $2.05) per kg, compared with the 46,700 dong to 48,800 dong range a week ago.
“Output this year is lower. Farmers have already sold most of their stockpiles,” said a trader based in the coffee belt.
“They are reluctant to sell the rest of their beans and cashing in from pepper instead.”
Another trader based in the same region said many coffee growers were switching to durian trees as those trees were reported to be more profitable although it takes the durian at least 5 years to bear fruit.
“Coffee growing area may reduce as a result of that,” the second trader said.
“But that does not necessarily mean the output will be lower. With new variety and advanced irrigation system, if weather condition allows, the output will not be impacted.”
- Traders in Vietnam offered 5% black and broken-grade 2 robusta at a discount range of $30-$40 per tonne to the May contract.
Vietnam’s coffee exports in February stood at 200,056 tonnes, up 40.3% from the month before, government customs data showed.
- Meanwhile, Indonesia’s Lampung Sumatran robusta coffee bean prices rose this week as heavy rainfall in the reason affected mini harvest output.
“Heavy rains have caused many coffee cherries to fall off,” one trader said, adding not many beans produced in this mini harvest.
Sumatran robusta beans were offered at $70 premium to the May contract this week, up from last week’s $50 premium, the trader said.
Another trader offered $100 premium to the May and June contract. ($1 = 23,695 dong)
Mar 08 - Fall in Iranian saffron exports due to disappointing supply (IHSmarkit)
- 41.4% fall in exports in January-October 2022
- Main importers: the UAE and Spain
Iran’s saffron exports fell by 41.4% year-on-year in volume to 134.2 tonnes but rose by 21.3% to $134.2 million in January-October 2022, as the 2021-22 crop halved y/y to 160 tonnes, cutting supply availability and pushing up prices. The main importers were the UAE and Spain, accounting for 39% and 22%, respectively, of the volume.
- There is no available Iranian saffron export data from May-January 2019 and in 2020. However, 2021-22 data unveils how the gradual fall in production is affecting the global industry, where Iran is the main supplier with around 90% of the total supply.
The 2020-21 crop reached a record of around 330 tonnes, falling in the following season due to heatwaves and severe drought despite the planted area expansion. The 2022-23 crop may be between 200-300 tonnes as dry conditions continue to hit the average yield.
Mar 08 - Vietnam cashew crop is falling short of expectations (IHSmarkit)
- Volume lower than hoped for and quality is disappointing
- African cashew prices did not fall as much as wanted by buyers
- Reduced availability of cashew kernels in Vietnam
- Despite predictions for a good cashew crop in Vietnam the figures on collections so far are poor both in terms of quantity and quality. Ho Chi Minh City-based supplier Golden Bridge noted: “At present, factories have to buy at VND27,000 ($1.13) for an out-turn of 26% – too low. Shell is thick but kernel inside is small, immature.”
- Even though new crops in African countries are confirmed to be good, their prices did not drop even more than last year because their governments imposed floor prices to support farmers. “It is impossible to buy African nuts and have profits against kernel prices now,” Golden Bridge observed.
- In the local market, there are fewer kernels available because processors have substantially reduced capacity so in the short term trading factories will face difficulties in collecting and offering.
Mar 08 - ICCO raises global cocoa output 4% for 2022/23 (IHSmarkit)
- Global production is expected to increase 4% y/y
- Cocoa grinding estimated to fall in Europe and America
- Production is likely to face challenges
- Global cocoa supply is expected to rise by 4% year-on-year to 5.02 million tonnes, according to the first International Cocoa Organization (ICCO) forecast for the 2022/23 season (October/September). Africa is estimated to account for 75% of total production, followed by the Americas with a share of 19%, and Asia and Oceania at 6%.
- Meanwhile, global cocoa grinding forecast was lowered by 0.6% to 5.03 million tonnes. Europe’s cocoa demand is expected to drop by 2.4% to 1.801 million tonnes, and the Americas by 1.2% to 922,000 tonnes. In contrast, grindings for Africa are anticipated to rise by above 1% to 1.149 million tonnes. Asia and Oceania’s cocoa grinding is also estimated to increase to 1.157 million tonnes, up more than 1% from last season.
- The organization expects the 2022/23 season to result in a supply deficit of 60,000 tonnes, which would still be well below the 287,000 tonnes of deficit estimated for the 2021/22 season.
- Despite the forecast of higher production in most major producing countries, the ICCO reported challenges for world production from the current global economy. An example is inflation which has caused an increase in the prices of imported inputs, putting financial pressure on cocoa farmers and reducing farm investments. Coupled with that, weather variations and cuts in government subsidies are likely to pose challenges to global production.
Mar 07 - Indonesia records fall in nutmeg and mace exports (IHSmarkit)
- 2022 volumes reflect downturn in production after adverse weather
- High demand from India for Indonesian mace in recent weeks
Indonesian nutmeg and mace exports declined by 15.9% last year to 22,232 tonnes.
GTA statistics show that the country’s nutmeg and mace exports are usually in the range of 19,000-22,000 tonnes but in 2021 they reached 26,461 tonnes.
Albert Berisa of Rotterdam trader Catz International told S&P Global Commodity Insights that it is most likely that the year-on-year fall in Indonesia’s exports in 2022 was the result of reduced production arising from the regular excessive rainfall in the country last year.
“Indonesia has had rainfall for a long period time, which is to do with climate change of course. Also, the rains have been unseasonal and for longer than usual. This is having an effect on various crops, including nutmeg. The problem is that this reduces the possibility for drying, especially in the remote areas. So in the initial stage it is difficult to dry the mace and nutmeg. That is also creating a delay for the goods to arrive in the various producing areas of the processors,” Berisa explained.
Mar 07 - Colombia’s coffee production climbed above one million bags in February 2023 (IHSmarkit)
- Production of washed arabica coffee in February 2023 was 1.025 million 60-kg bags, up 10.5% the same month in the preceding year, according to the National Federation of Coffee Growers (Fedecafe). Production figures are starting to show signs of recovery following wet weather caused by a prolonged La Niña phenomenon, the federation said. This brought total production in the first five months of 2022/23 (October/September) to 4.822 million bags, down 9.4% from the same period last year.
- Exports during December were down at 928,000 bags from 983,000 a year ago. This brought total exports so far in 2022/23 to 4.594 million bags, compared with 5.304 million a year ago.
Mar 06 - India’s sugar production forecast lowered to 33.6 million tonnes (IHSmarkit)
- S&P Global Commodity Insights has reduced India’s 2022/23 sugar production estimates by 650,000 tonnes to 33.6 million tonnes. This will be down 2.1 million tonnes year on year.
- The reduction was driven primarily by the production cuts in western producing states Maharashtra and to a smaller extent in Karnataka for a combined total of 1.15 million tonnes. This was partly offset by increases in production in Uttar Pradesh and small other states by 500,000 tonnes. Sugar output for 2022/23 until February is estimated at 25.7 million tonnes, up 400,000 from the same time last year. Sugar cane crushing is entering its final stages at the start of March in Maharashtra and Karnataka.
Mar 06 - Fall in Indian turmeric prices steepens despite minimum level set by the government (IHSmarkit)
- 5% growth in exports
- 5-10% fall in futures prices
- The Indian spot fob unpolished turmeric price averaged INR 6,526/quintal ($79.8/quintal) at the Nizamabad market (Telangana state, South Central) on 3 March 2023, 6% less month-on-month and 24% less year-on-year. The polished product price averaged INR6,924/quintal, 4% less m/m and 24% less y/y.
- Huge carry-over stocks of 170,000 tonnes are halting bullish trends, Indian processors cutting prices to sell out them.
- India’s global sales reached 160,665 tonnes, 5% more y/y, worth $208.1 million, in 2022, 4% more y/y in value. The main importers were Bangladesh, the UAE and Iran, taking 18%, 12% and 6%, respectively, of the volume.
Mar 04 - Market Briefing: Dried Fruit and Nuts (IHSmarkit)
- Global 2022-23 pistachio production projected to fall by 5% y/y
- 7% m/m and y/y fall in US peanut inventories due to processing recovery
- 27.6% y/y growth in South African macadamia exports
Production
- The global 2022-23 pistachio production is expected to fall by 5% year-on-year to 791,000 tonnes as the US and Iran, the main global suppliers, are having ‘off-years’ (most nut trees alternate one season with high yield and the following with a low one). The US pistachio crop is projected at 401,000 tonnes, 23% less y/y. The Iranian output is forecast at 106,000 tonnes, 21% less y/y.
- Australia’s production of nuts reached 287,079 kernel tonnes, 12% more y/y on 104,605 hectares (+5% y/y), valued at A$1.38 billion ($931.9 million) (+16% y/y) in the 2021-22 season, almonds, macadamias, walnuts and pistachios being the largest crops. The almond crop rose by 16% y/y to 143,805 tonnes; macadamias did that by 4% to 17,481 tonnes; walnuts reached 14,341 tonnes, 5% more y/y; and pistachios grow by 64% to 3,600 tonnes.
Demand
- The global 2022-23 pistachio consumption is expected to be stagnant at 763,000 tonnes, with weak demand in China offsetting the growth in the EU.
- Processing recovery is cutting US peanut stocks, which fell by 7% m/m and y/y to 4.63 billion lbs in January 2023.
Trade
- Global sales of US pecans were 9.2 million in-shell basis pounds this January, 49.3% more y/y, bringing seasonal data (September 2022-January 2023) to 33.8 million lbs, 5% less y/y. Shelled shipments fell by 40% y/y to 2.53 million lbs in January 2023. The main shelled importers were Israel with 448,500 lbs (+88% y/y) and Canada with 445,970 lbs (up from 176,130 lbs in January 2022) in January 2023. In-shell exports reached 6.12 million lbs, six times more y/y, thanks to recovery in Chinese consumption. China was the only purchaser in January 2023
- South Africa achieved a 27.6% increase in its macadamia nut exports in 2022 to 40,049 tonnes (HS codes 080261, in-shell, fresh or dried and 080262, shelled, fresh or dried). Despite recurring Covid-19 lockdowns in China, South Africa generated a massive 138.2% surge in its shipments to the Asian country to 26,534 tonnes. 
Prices
- Brazil nut processors are starting to negotiate full containers with European and US importers, with prices ranging from $2.65-2.80/lb for deliveries in June, 15-20% less month-on-month. This is quite close to the red line set by Bolivian processors: $2.60/lb fob, considered as a quotation to cover the production and logistics costs.
- Trading sources quoted the following Turkish hazelnut dap prices in the week ending on 2 March:
Roasted diced 8-12mm, $740 in 10kg vacuum cartons (€696), 5% less m/m and 10% more y/y      
S.r. blanched 11-13mm <10% skin, $740 in 10kg vacuum cartons (€696), 11% less/mm and 9% more y/y
S.r. blanched 12-14mm <10% skin, $770 in 10kg vacuum cartons (€724), 11% less m/m and 13% more y/y
NHK 13-15mm, $695 in 10kg cartons (€653), 9% less m/m and 19% more y/y 
Mar 04 - Market Briefing: Spices and Exotics (IHSmarkit)
- Madagascar cloves crop fell below expectations
- Guatemala increased cardamom exports by 42% last year
- Strong demand helps underpin cloves prices
Production
- India’s 2022-23 coriander seed production is expected to increase by 19% y/y to 950,000 tonnes.
- The latest Comoros cloves crop was very good due to favourable weather at an estimated 6,000 tonnes plus compared with a ‘normal’ crop of about 3,500-4,000 tonnes. The Zanzibar crop was also ‘normal’ at about 4,000 tonnes. However, the Madagascar cloves crop fell to an estimated 11,000-12,000 tonnes from earlier expectations of 15,000 tonnes and 22,000-23,000 tonnes the previous year (2021-22). In addition, for the third consecutive year, the Indonesian crop was very short, being estimated at about 55,000-60,000 tonnes, which is not even half of what this origin achieves when it has a good crop.
- Morocco’s 2023 honey crop is expected to fall year-on-year below 6,000 tonnes after falling by 10% year-on-year to 6,530 tonnes in 2022, far from the government long-term goal of 50,000 tonnes, as severe drought is undermining average yield in most origins.
Demand
- Guatemala boosted export demand for its cardamom last year (see Trade below).
- China achieved a near 7% rise in its honey exports in 2022 (see Trade below).
- Demand for cloves has continued to be strong over the last few weeks and a lot of business with India and the Middle East was concluded in late February at Gulfood in Dubai. However, with the current high prices, demand from India has slowed down slightly in the last week.
Trade
- Indian cumin seed exports closed 2022 at 189,330 tonnes valued at $491.9 million, 22% less y/y in volume and 15% more in value.
- Indian coriander seed exports in 2022 fell by 16% y/y in volume to 43,530 tonnes but grew by 13% in value to $730 million.
- Guatemala increased its cardamom exports by 42% last year to 53,167 tonnes. Guatemala’s shipments to Saudi Arabia rose 15.7% y/y to 11,355 tonnes while those to the UAE were 43.4% higher at 9,895 tonnes and those to Jordan were a massive 239.6% up at 7,695 tonnes.
- China recorded a 6.9% increase in honey exports last year to 156,002 tonnes as it remained the competitively priced origin and particularly popular with European importers. The UK continued to rank as China’s biggest purchaser in 2022 at 34,261 tonnes, although this was 8.9% down from the volumes acquired by the UK in 2021.
Prices
- International cloves demand has been strong so far this year and this has resulted in prices remaining high after some increases in recent weeks. Latest price indications from European traders put Indonesian cloves around $8,750 per tonne cfr Singapore this week and Madagascar cloves in the range of $8,700/tonne cif Singapore. A few weeks earlier Madagacscar cloves were indicated at $8,400/tonne cif Singapore.
- Indian cumin seed spot prices averaged INR31,609 per quintal ($381.7/quintal) at the Unjha market (Gujarat, North-West) on 20 February 2023, stagnant month-on-month and 51% more y/y.
- The Indian coriander seed spot price averaged INR7,177/quintal ($86.5/quintal) at the Kota (Rajasthan, North India) wholesale market on 27 February 2023, 14% less month-on-month and 32% less year-on-year, mirroring levels prior to the Russia-Ukraine war.
Mar 03 - Asia Coffee-Domestic prices narrow in Vietnam; premiums rise in Indonesia (Reuters)
- Domestic robusta prices in Vietnam narrowed slightly this week on thin supply, while premiums in Indonesia rose amid expectations of lower output from the mini harvest, traders said on Thursday. Farmers in the central highlands, Vietnam's largest coffee-growing area, sold beans COFVN-DAK at 46,700 dong to 48,800 dong ($1.97 to $2.06) per kg, compared with last week's 45,000 dong to 49,500 dong range. Coffee exports from Vietnam are estimated to have decreased 13.1% in the first two months of 2023 from a year earlier to 323,000 tonnes, equivalent to 5 million 60-kg (130-pound) bags, the General Statistics Office said.
“The news about coffee exports from Vietnam in the first two months of this year lower than the year before was a push for London prices to rise after some falling sessions,” said an exporter based in Ho Chi Minh City, adding trade remained tepid.
- May robusta futures on ICE settled up $37, at $2,177 per tonne as of Wednesday’s close, Refinitiv data showed.
- Meanwhile, prices of Indonesia’s Sumatran robusta beans in Lampung province this week rose amid expectation of lower output from the mini harvest. One trader offered $50 premium to the May contract this week, up from $40 premium to the March contract last week. Another trader offered $100 to $120 premium to the April and May contracts this week, up from $50 to $60 premiums to the same contracts a week ago.
“Coffee prices rose slightly due to heavy rains which caused the coffee cherries to fall off,” one of the traders said. “Output from this mini harvest may not be much.”
- Indonesia exported 15,006.2 tonnes of Sumatran robusta coffee beans from the province of Lampung in January, down 32.58% from the same month last year, data from the local trade office showed. ($1 = 23,705 dong)
Mar 02 - US ethanol production falls, stockpiles tumble from 11-month high (AgriCensus)
- US ethanol production fell by 26,000 barrels per day (b/d) in the week ending February 24, while stockpiles dropped from an 11-month high, data published by the US Energy Information Administration (EIA) showed Wednesday. Total ethanol production across the US decreased to 1.003 million b/d in the reporting week, down from 1.029 b/d a week earlier.
- The weekly decline was unexpected by analysts, who projected a move in a 5,000-barrel increase-to- 5,000-decrease range. Total ethanol production in the Midwest – home to over 90% of total US ethanol production capacity – dropped by 26,000 b/d to 958,000 b/d, according to the EIA. Over the week, full production equated to the consumption of 2.58 million mt of corn, down from 2.65 million mt a week earlier.
- Meanwhile, ethanol stockpiles tumbled by 800,000 barrels to 24.8 million barrels in the period covered by the report, down from 25.6 which is the highest level since the week ended April 1, 2022. The stockpile decrease was unexpected by analysts surveyed before the report, who had called for a gain of between 100,000 to 200,000 barrels.
- Margins calculated through a model from Iowa State University showed that the estimated return over operating costs for the average Midwest-based plant rose in the week ending February 24 to $0.27/gallon, up from $0.14/gallon a week earlier. Corn prices for the week meanwhile tumbled by around $0.28 during the week to an average of $6.57/bu.
- Finished ethanol prices rose to $2.09 in the week ending February 24, up from $2.03 a week earlier.
Mar 01 - Global cloves prices held high by strong demand (IHSmarkit)
- Mixed production results
- Stocks dwindling after heavy buying by India and the Middle East
- International cloves demand has been strong so far this year and this has resulted in prices remaining high after some increases in recent weeks. The production scenario is mixed with favourable 2022-23 crops from a number of origins but disappointing ones elsewhere. Either way, the underlying supply is expected to be limited by April based on estimated exports so far and dwindling carry-over stocks.
- Latest price indications from European traders put Indonesian cloves around $8,750 per tonne cfr Singapore this week and Madagascar cloves in the range of $8,700/tonne cif Singapore. A few weeks earlier Madagascar cloves were indicated at $8,400/tonne cif Singapore.
- The latest Comoros cloves crop was very good due to favourable weather at an estimated 6,000 tonnes plus compared with a “normal” crop of about 3,500-4,000 tonnes in previous years. The Zanzibar crop was also described as normal at about 4,000 tonnes.
- However, the Madagascar cloves crop fell short of expectations for 15,000 tonnes versus 22,000-23,000 tonnes the previous year.
- Emmanuel Nee, head of the ingredients department at French trader Touton , told S&P Global Commodity Insights: “At the end of the day I believe we maybe have 11,000 or 12,000 tonnes from Madagascar.” In addition, for the third consecutive year, the Indonesian crop was very short, being estimated at about 55,000-60,000 tonnes, which is not even half of what this origin achieves when it has a good crop. Brazil’s contribution to the world supply is negligible, its 2022-23 crop (harvesting of which should finish in March or April) being pegged at no more than 2,000 tonnes. Most of this was sold to the US and South America mainly for the production of cloves powder. Quality is said to be very poor. .
Mar 01 - Coffee prices recover amid changes in the crop perspectives (IHSmarkit)
- Brazil’s 2022/23 crop may not be as large as had been predicted
- Global coffee output is expected to increase slightly compared to last season
- Consumption is estimated to rise 1.9% y/y
- Arabica coffee prices reached the lowest level in January since early May 2021 as favourable crop weather in top producer Brazil with steady showers boosted the outlook for the next harvest. Some forecasters even predicted a Brazilian 2023/24 coffee crop of as much as 75 million bags until a few weeks ago. However, there is now increasing worry that there was too much rainfall in Brazil in recent weeks and months, leading to the proliferation of pests and diseases. The market now expects that the 2023/24 crop will not be as large as had been predicted.
- As a result, the most-active arabica contract for May delivery hit a four-month high of 194.15 cents per pound last week and robusta futures have also risen back to a five-month high of $2,208 due to strong demand from roasters who are increasing the robusta share in their blends to escape high arabica prices.
- Against this background, S&P Global Commodity Insights estimates that world coffee production for 2022/23 may rise to 165.2 million 60-kg bags, up almost 1% from 163.6 million produced in 2021/22 and way below 176.6 million in 2020/21. Arabica output is expected to drop for the second straight year to just 88.4 million bags in 2022/23 from 88.9 million last year. Meanwhile, robusta production is seen expanding to 76.8 million bags from 74.7 million the year before.
- Global consumption in 2022/23 is forecast to rise 1.9% to 167.5 million bags, which means there will be a deficit of 2.3 million bags in the new season compared with a deficit of 0.8 million in the 2021/22, partly due to social interactions in China which are expected to increase in 2023 after the relaxation of the Chinese government's COVID policies. Also, global coffee demand has proved to be rather income-inelastic in recent crises in terms of overall consumption.
- Exports are estimated to fall to 129.2 million bags from 136.0 million the year before due to lower shipments in Vietnam, Ethiopia and Peru. The market will also keep a close watch on the economic situation in Brazil after the return into office of President Lula. If the market loses faith in the new government’s economic agenda this may lead to a depreciation of the country's currency against the US dollar. A weaker Brazilian real usually pressures coffee prices as it increases returns in local currency from dollar-denominated coffee sales
Feb 28 - AISTA revises down projection of sugar production to 33.5 million tonnes in 2022-23 season (Accord Fintech)
- The All India Sugar Trade Association (AISTA) in its second estimate has said that India's sugar production is projected to decline by 1 million tonne to 33.5 million tonnes in the ongoing 2022-23 season (October-September) as compared to its earlier estimate of 34.5 million tonnes, on account of lower sugarcane yields and sugar recovery. Based on revised figures, the country's sugar production is likely to remain down by 2.3 million tonnes than the actual output of 35.8 million tonnes achieved in the 2021-22 season. It said the revised estimate of sugar production excludes diversion of sucrose for ethanol making. Consequently, sugar production in Maharasthra is estimated to be lower at 11.3 million tonnes in the current season as against 13.7 million tonnes in 2021-22 season. The output in Karnataka is likely to be drop slightly to 5.5 million tonnes as against 6.2 million tonnes in the said period. In Uttar Pradesh, sugar output is estimated to be slightly higher at 10.8 million tonnes in 2022-23 season as against 10.2 million tonnes in the previous season.
- According to the association, the decline in production in Maharasthra and Karnataka is mainly due to lower sugarcane yield and recovery rate. A good number of sugar factories in Maharashtra have started closing down or have already closed down or are able to operate only one or two shifts. This shows clear signs of tapering off of the season. In Western Uttar Pradesh, the sucrose recovery has been lower.
- Based on the revised estimates, AISTA said about 39.5 million tonnes of stock would be available that will include 6 million tonnes of opening stock. Domestic consumption would be 27.5 million tonnes and exports would be 6 million tonnes in the current season. The closing stock would be 6 million tonnes. India is one of the major sugar producing countries in the world.
Feb 28 - EAEU countries increase beet sugar production 9% to 6.5 mln t this season - Soyuzrossakhar
- Sugar refineries in Eurasian Economic Union (EAEU) countries have finished processing sugar beet from the 2022 harvest, producing 6.5 million tonnes of sugar, 9% more than from the previous year's beet harvest, industry association Soyuzrossakhar said.
"Taking into account sugar produced from already imported raw sugar, as well as expected amounts of raw sugar imports by EAEU countries before the start of processing of sugar beet from the new harvest in August of this year, the needs of the internal EAEU market will be completed covered this season (August 2022-July 2023)," the association said in a press release.
- There were 65 sugar refineries operating in Russia this season and they processed 43.28 million tonnes of sugar beet, 5.84 million tonnes more than in the previous season. They produced 5.9 million tonnes of beet sugar, 9% more than in the previous season. After finishing sugar beet processing, the refineries will continue to process beet molasses, syrup and raw cane sugar, from which they might produce about another 190,000 tonnes of sugar.
- Sugar beet processing has concluded in Belarus, Kyrgyzstan and Kazakhstan, but two refineries in Kazakhstan are continuing to process raw sugar.
Feb 27 - Uganda’s coffee exports rise 23.0% in January 2023 (IHSmarkit)
- Coffee exports in January 2023 reached 494,226 60-kg bags, up 23.0% from 401,892 bags in the same month a year earlier and also above its forecast of 400,000 bags issued last month, the state-run Uganda Coffee Development Authority (UCDA) said. Shipments included 412,282 bags of robusta beans (up 30.9% from 314,945) and 81,944 bags of arabicas (down 5.8% from 86,947).
- UCDA said that most regions experienced drought conditions but exports during January were higher than last year as exporters offloaded coffee from their warehouses due to the recovery in robusta prices. Arabica exports were lower than last year due to the off-year of the biennial arabica tree cycle. This brought total exports in the first four months of 2022/23 (October/September) to 1,815,037 bags, down 6.9% from 1,950,040 in the same period last year. Robusta exports were down 7.7% at 1,505,151 bags from 1,631,394, while arabica shipments fell 2.8% to 309,886 bags from 318,646.
- The UCDA expects exports of 480,000 bags in February. The main harvesting season in Central and Eastern regions which started in October is likely to begin tailing off in February due to a short main harvest. Exporters are likely to continue to sell stocks to fulfill contractual obligations with buyers abroad. UCDA said the month of January 2023 was characterised by dry conditions especially in Northern and Western regions with light scattered showers received in Elgon, Central, Rwenzori and Eastern regions. This caused moisture stress on newly-planted coffee fields. Greater Masaka was exceptionally dry with occasional rains that were erratic thus destroying crops. However, South-western received near normal rainfall across the sub regions which favoured farming activities. Notable was the high infestation of Black Coffee Twig Borer (BCTB) in most coffee regions. Coffee leaf rust increased slightly above the economic injury level in Elgon, while mealy bugs in old un-stumped trees were observed in Northern, Elgon and Western regions, it added.
Feb 27 - 2022/23 world sugar surplus shrinks to 2.7 million tonnes (IHSmarkit)
- The February update of our world sugar balance forecast shows a reduction of the 2022/23 (October/September) world sugar surplus to 2.7 million tonnes from 2.9 million in the previous forecast published in January, while the deficit in 2021/22 has risen to 3.5 million tonnes from 3.0 million.
- World sugar output in 2022/23 is now seen at 191.9 million tonnes - 0.1 million less than before due to marginal adjustments here and there. The forecasts for top producers including Brazil, India and Thailand remained all unchanged.
- Apparent consumption in 2022/23 is now seen 0.3 million tonnes higher than before at 188.0 million, also due to minor changes for some countries. The allowance for unrecorded disappearance (the difference between world exports and imports) is 1.2 million tonnes (1.4 million).
- The larger deficit in 2021/22 is caused by a minor reduction of global production in 2021/22 (October/September) by 0.1 million tonnes to 184.7 million tonnes coupled with an upward revision of global consumption by 0.3 million tonnes to 186.0 million tonnes.
Feb 24 - Market Briefing: Spices and Exotics (IHSmarkit)
- Vietnam’s 2022-23 pepper production expected to increase by 9% y/y 
- 15% y/y increase in US honey sales 
- Madagascar’s 2022-23 vanilla official export price: $250/kg 
Production
- Vietnam’s 2022-23 pepper crop is expected to be up from that of last year at 205,000 tonnes, 9% more year-on-year, thanks to favourable weather. Brazil’s pepper production is projected at 108,000 tonnes in the 2022-23 season, 4,000 tonnes up from the previous season.
- Iran’s cumin seed crop may rise by 12% year-on-year to 9,500 tonnes as average rainfall has grown. However, this production level is very far from 17,000 tonnes reached in 2020.
- The Ethiopian government aims to produce around 350,000 tonnes of sesame seeds in the 2022-23 season due to high prices, although most players do not think it can achieve this. Its 2021 production plummeted to 190,000 tonnes (-14% y/y) and to 170,000 tonnes in 2022, far from 300,000 tonnes reached in the 2018-19 season, as many farmers have cut the planted acreage to lows due to civil war. 
Demand
- Global pepper consumption is projected at 530,000 tonnes (+5% y/y) in the 2022-23 season, 10,000 tonnes down from carry-over stocks. That might offset bullish price trends, although the 2021-22 production fell to 498,000 tonnes, down 3,000 tonnes from the previous season.
- The US honey sales are estimated at a record of $920 million from December 2021-November 2022, 15.4% more y/y, although the volume was stagnant due to rising prices for organic and conventional product.
Trade
- Vietnam’s pepper exports in January 2023 fell by 20% y/y to 12,553 tonnes valued at $43.2 million, 41% less y/y. The US, the UAE and India were the main importers, accounting for 26%, 5% and 4%, respectively, of the total volume. Brazilian international sales of pepper this January fell by 20% y/y to 6,350 tonnes in volume but fell by 46% in value to $17.0 million. Vietnam, Egypt and Pakistan were the main purchasers, whose importers traditionally purchase with strong discounts, took 28%, 12% and 8% of the volume. 
- Indian sesame seed exports were 219,906 tonnes, worth $392.6 million, in January-November 2022, 6% less y/y in volume and 5% more in value. The main importers were South Korea, China and the US, which took 19%, 7% and 6%, respectively.
- Ethiopian sesame seed exports closed 2022 with a record low of 108,710 tonnes (-42% y/y) valued at $184.05 million (-36% y/y). The main importers were Israel, the UAE and Singapore, taking 38.6%, 16.9% and 10.7%, respectively.
- Peru’s chilli exports rose by 13% y/y in volume to 44,660 tonnes and by 22% in value to $141.6 million in 2022. Mexico was the driver of the growth, importing 19,010 tonnes (+62% y/y). Mexico has imposed restrictions on Chinese chilli due to quality problems, strengthening Peru’s role as a key supplier.
Price
- Madagascar’s government has updated its rules for the 2022-23 vanilla season, maintaining the export price at $250/kg fob and forcing authorised exporters to sell out licensed volume in a 15-day period once they sign agreements. In addition, it authorises to sell vanilla cuts at $140/kg (until 10% of the licensed volume) if the exporter can justify that international markets are forcing them to do so.
- India’s new sesame seed (whitish) spot price averaged INR18,800/quintal ($227.9/quintal) at the Unjha wholesale market (Gujarat, north-east) on 10 February, 8% more m/m and 64% more y/y. 
Forward view
- Vietnamese pepper harvest is in full swing, the industry forecasting a 12% y/y growth thanks to favourable weather although the final data will be revealed around May-June. This projection has already driven bearish price trends.
- Sustainability projects and rules are already drawing a new global commercial route map, with key emerging importers such as Mexico or South Africa willing to pay higher prices if suppliers fulfil their quality requests. In addition, key European retailers, such as Albert Heijn, are cutting the use of air transport services for imports to minimise their CO2 footprints and encouraging European farmers to increase their productions of spices such as ginger, traditionally developed in Asia and Latin America.
Feb 24 - Market Briefing: Dried Fruit and Nuts (IHSmarkit)
- Australian macadamia output projected to be 13.2% higher y/y
- US maintains seasonal lead on almond shipments
- Chinese peanut prices rose after the New Year as expected
Production
- Australia’s 2023 macadamia production is expected to reach 60,000 tonnes at 3.5% moisture (64,400 in-shell tonnes at 10% moisture), 13.2% more year-on-year.
- It continues to be difficult to collect raw peanuts in China, due to the very short supply this year. Total production (2022 crop) is about 20% less than that of the previous year.
- The combination of recent frosts and earlier persistent severe drought and heatwaves has raised concerns for the 2023 peanut crop in Argentina.
- The situation for Chinese apples is becoming increasingly difficult. The factories cannot obtain enough suitable apples to transform into dried product.
Demand
- Rotterdam trader Catz International observed last week that there has been increased dried fruit and nut trading lately as stocks in general are decreasing. However, it cautioned that buyers have been operating very carefully as they first wish to sell their earlier bought positions.
- Peanut demand in China is strong due to retail consumption. All the crushing factories are said to be buying their materials at high prices.
- The US is maintaining a decent level of overseas demand for its almonds, pistachios and walnuts (see Trade below). However, its raisin shipments are lagging behind mainly due to competitive pricing from rival origins.
- Chilean walnuts are attracting strong export demand (see Trade below).
Trade
- Total US almond shipments for the first six months of the 2022/23 season (August-January) were 2.6% up y/y at 1.27 billion lbs from 1.23 billion lbs earlier. Export shipments increased this January from those of the same month a year ago, helping to push the seasonal export total 7.2% ahead y/y to 908.27 million lbs and offsetting a continued shortfall in domestic shipments.
- Australia’s almond shipments reached 10,799 kernel weight equivalence tonnes in December 2022, 41.6% more year-on-year, bringing seasonal shipments (March-December 2022) to 115,554 tonnes, 11% more y/y.
- US pistachio shipments reached a record of 31,821 (short) tons in January 2023, 29% more year-on-year, bringing seasonal sales (September-January) to 165,710 tons, 2% more y/y. The impetus was from exports, which rose by 64% y/y to 21,643 tons this January, with seasonal international sales totalling 117,079 tons, 4% more y/y. Domestic sales totalled 10,678 tons this January (-10% y/y), bringing the seasonal data to 48,630 tons, 2% less y/y.
- Californian walnut shipments reached 67.7 million lbs this January, 26% more year-on-year, bringing seasonal sales (September-January) to 255.8 million lbs, 4% more y/y.
- Chilean walnut exports reached 5,823 (in-shell equivalent) tonnes in January 2023, up from 1,742 tonnes in January 2022, bringing shipments in the 2022-23 season (21 March-31 January) to 174,948 tonnes, 19% more y/y.
- Vietnam’s exports of cashew kernels declined to 26,910 tonnes this January, 35.5% down from the volumes exported in the same month a year ago. Local suppliers attributed the January 2023 fall to the impact of the annual Tet holiday.
- California’s raisin shipments were 15,690 (short) tons this January, 15% less year-on-year, bringing seasonal (August 2022-January 2023) sales to 101,410 tons, 11% less y/y.
Price
- Chinese peanut prices increased after the Chinese new year, as predicted. Hebei Cofco Rotterdam reported that prices for Chinese raw and blanched Virginia and Hsuji type peanuts have risen by $100-150 per tonne from the levels of one month ago. The red skin peanut variety has reached the highest level in its history of around $2,750/tonne cif.
- Spanish Comunas almond prices fell by €0.40-0.50 ($0.42-0.53) per kg to €3.80/kg between December-January when Californian prices increased by $0.10/lb to $1.55-1.60/lb in the Spanish market. This means that Californian almonds are sold at €3.65/3.70/kg, a €0.10 difference with the Spanish, far from the difference of around €0.70 reached in Q4 2022.
Forward view
- Current high prices for peanuts in China are expected to encourage the country’s farmers to grow more peanuts this year and it is hoped that the price will be lower in Q4 2023. Until then, Chinese peanut prices are unlikely to decrease.
- The US looks set for another season of higher almond shipments (even if the end result is only marginally ahead) despite earlier logistical challenges. US almond prices should remain relatively stable for the time being, until there are clearer indications on the state of the bloom and therefore potential size and quality of the 2023 crop.
- Contrasting with the outlook for US almonds, it looks inevitable that the country’s shipments of raisins will end up behind this season, based on the pace recorded so far.
Feb 24 - Asia Coffee-Domestic prices hit record high in Vietnam; premiums drop in Indonesia (Reuters)
- Domestic coffee prices in Vietnam, the world’s biggest robusta beans supplier, hovered near a 6-month high on Thursday, tracking a surge in global prices and limited supplies, while premiums dropped in Indonesia as new beans started to build up. Farmers in the central highlands, Vietnam's largest coffee-growing area, sold beans at 45,000 dong to 49,500 dong ($1.89 to $2.08) per kg, up from 43,700 dong to 44,500 dong last week.
“London prices have skyrocketed in the past week,” said a trader based in the coffee belt. “But farmers don’t seem to benefit from such high prices. Trade is very tepid.”
May robusta futures on ICE gained $133, at $2,205 per tonne as of Wednesday’s close, the highest level since October last year, Refinitiv data showed.
- Another trader said farmers in some areas of the coffee belt were switching to durian trees on hopes of better gains.
“Durian prices are going up day by day so they are cutting down coffee trees to have a place for durian.”
- In Indonesia’s Lampung province, price differentials narrowed amid higher benchmark prices and as new supply started to build up in the southern part of Sumatra island.
- Sumatran robusta beans were offered at $40 premium to the March contract this week, down from $90 premium last week.
- Another trader offered $50 to $60 premium to the April and May contracts, down from $130 to $150 premium to the same contracts last week.
“Prices dropped due to higher London prices and more bean supplies,” one of the traders said.
The main coffee bean harvest in the southern Sumatra region typically falls around mid-year, but some area usually have a mini harvest a few months earlier. ($1 = 23,800 dong)
Feb 23 - Sri Lankan desiccated coconut industry started 2023 with weak exports with prices at highs (IHSmarkit)
- 23% fall in exported volume
- Main importers: India, the UAE and the US
Sri Lanka’s desiccated coconut exports reached 2,359 tonnes valued at $4.39 million in January 2023, 23% less year-on-year in volume and 47% less in value, due to fresh supply shortage and prices stabilized at highs. The sharp fall in rupee value against US dollar due to Sri Lanka’s bankruptcy and International Monetary Fund intervention raised sales but at low prices, particularly in H2 2022.
- The main importers were India, the UAE and the US, which accounted for 16%, 13% and 8%, respectively, of the volume.
- The fresh price averaged LKR80.7 ($0.22) per coconut in coconut auctions held on 16 February, 4% less month-on-month and 43% more y/y. The robust increase in price is due to a combination of inflation, the fall in the Sri Lankan rupee against the US dollar and supply scarcity.
- Wholesale desiccated coconut prices ranged from LKR550-580 for fine (stagnant m/m) and from LKR580-600/kg for medium (unchanged m/m) on 7 February, according to the Sri Lankan Coconut Development Authority.
Feb 23 - Fairtrade farmers need the support of UK shoppers as inflation soars ( DJ )
- As the rising cost of living continues to squeeze household budgets and inflation runs at a 40-year high, getting value for money has never been more important. Waitrose’s recent headline-grabbing decision to slash prices across hundreds of grocery favourites is just one example of how UK retailers are responding to the economic challenges facing shoppers.
But while affordability and fair pricing is important for people in the UK, it is essential for farmers and agricultural workers overseas. Many farmers across the world rely on the lifeline provided by Fairtrade, which setsa minimum price and provides a premium to deliver social, business and environmental benefits in the community, helping them to continue to produce goods amid a cost of living crisis and climate emergency. Now, more than ever, they need people in the UK to continue to buy their products.
- After last year’s COP27 summit, we know our planet will be a much hotter place in the coming decade. Communities in climate-vulnerable nations will be left to the mercy of unpredictable weather events caused by climate change. These include extreme temperatures, devastating droughts, hurricanes and floods.
- Cocoa farmers in Ghana told us during their last harvest that they don’t see a future in the crop because it’s so difficult to grow. Research backs this up. A 2021 Fairtrade report shows not just cocoa farmers are affected: coffee, banana and tea farmers in origins ranging from the Caribbean and Central America to India are reporting the same problems.
- Meanwhile, 93% of Fairtrade coffee farmers surveyed in Kenya said they were already experiencing the effects of climate change, and reported more erratic rainfall and an increase in pests and diseases such as thrips and coffee berry disease. This is the future farmers around the world now face, and it endangers their ability to grow our favourite foods.
- The UK imports 40% of our food, and around 15% from low-income countries – so we, as a nation of shoppers and traders, have a vested interest in a continuous supply of good-quality imports. If farming doesn’t pay, there’s no guarantee producers will keep growing cocoa and coffee, for example, and UK shoppers might have to face a future in which these popular products are harder to come by. We’ve seen the impact of this most starkly in coffee, where low prices, poverty and climate change have caused more Latin American farmers than ever to move north in search of better lives. Backing farmers by paying fair prices helps equip them to tackle these problems, and research demonstrates greater economic resilience within Fairtrade organisations.
- Ghanaian cocoa farmer Emmanuel Obinim explained the scale of the challenge to us recently. He described how Fairtrade provides him with valuable protection, but even so, over recent months he has found staples like bread, fertiliser and oil are rapidly becoming unaffordable. He emphasised that farming has always been hard, but hotter temperatures mean the cocoa beans he produces are smaller and generate less income – his yield has dropped from 50 bags to just 17 and it continues to fall.
- I am a firm believer that choosing Fairtrade is a simple way to take direct action for everyone during this difficult time. Without support from British businesses and consumers for fairer prices today, farmers like Emmanuel will find it even harder to tackle the economic challenges of the future. So as Fairtrade Fortnight kicks off, my message is this: shoppers need to choose Fairtrade products when they can, and businesses must continue to invest in equitable, sustainable and ethical supply chains to secure the future of our favourite foods.
Feb 22 - Cote d'Ivoire's cocoa regulator expects exporters to honour contracts ( DJ )
- Conseil du Café-Cacao (CCC), Cote d’Ivoire’s cocoa regulator, has issued a statement that it expects the country’s cocoa exporters to fulfill their contracts despite supply chain issues at ports.
The CCC said it was responding to international media reports, including ConfectioneryNews , that cocoa exporters in the world’s top producing country were close to defaulting on their contracts due to a lack of beans from the October-to-March main harvest.
- Exporters informed the CCC that arrivals at its main ports stood at 34,000 tonnes for the week to 12 February, versus 66,000 tonnes during the same period last season. Reasons for the shortage have been caused by climate change, swollen root virus (a disease that affects cocoa pods in West Africa), dock worker strikes at the main Ivorian port of San Pedro last year - and a shortage of fertilizer due to the ongoing war in Ukraine.
- The regulator told local media outlets that although some domestic exporters were behind on purchases and at risk of default due to bean shortages, current rainfall levels should reverse the trend by the month-end.
“The CCC wishes to reassure and inform all stakeholders in the cocoa value chain of the cocoa sector that everything is being done to facilitate the supply of beans,” it said in a statement.
- It added that measures would be taken to limit extra purchases and stock-building while other exporters struggle to meet their requirements. According to financialpost.com, rainfall was below-average in most of Cote d’Ivoire’s cocoa-growing regions last week. Several farmers said more downpours would be needed before the end of this month or early March to help the upcoming mid-crop reach its maximum potential.
Feb 20 - Rwanda Coffee Prices Fell 35% on Week (DJ)
- The average price of Rwandan coffee sold for export fell by 35% in the week ended Friday, the country's agricultural export board said Monday.
- Coffee beans sold for an average price of $3.40 a kilogram, down from $5.20 a kilogram in the prior week, the board said. The country exported 184.2 metric tons of coffee for $626,545 compared with 167.8 tons sold for $887,884 the week prior.
- The U.K., China, and Zambia were the main importers of Rwandan coffee during the week, the board said.
- Almost all coffee produced in Rwanda is arabica and mostly for export. Coffee is Rwanda's main export and accounts for around 60% of its foreign-exchange earnings.
- Rwanda's coffee production is forecast to fall by 7.1% in 2023 to 325,000 60-kilogram bags, according to the U.S. Agriculture Department.
Feb 17 - Asia Coffee-Vietnam trade sluggish amid growing demand, thin supplies in Indonesia (Reuters)
- Trading activities remained subdued in Vietnam on limited domestic supplies, although buyers were in favour of the country’s robusta due to thin supplies in rival Indonesia, traders said on Thursday.
Farmers in the Central Highlands, Vietnam's largest coffee-growing area, sold beans at 43,700 dong to 44,500 dong ($1.85-$1.88) per kilogramme, higher than last week's 42,400 dong to 44,000 dong range.
“Output this crop season is 30% lower than the previous one. So, supplies from farmers are running low now,” a Central Highlands-based trader said.
“Although demand is high, trade has not picked up.”
- Another trader said farmers in some areas of the coffee belt were replacing the old coffee trees with the new ones for better output.
“It will take the new trees three years to bear the fruit,” the trader said. “The output may be at that level or even slightly lower in the next few years.”
- May robusta futures on ICE settled down $21, at $2,049 per tonne as of Wednesday’s close.
- Indonesia’s Sumatran robusta coffee beans were offered at $90 premium to the March contract, down from $110 premium last week as supply started to increase, a trader said.
“... Although it (supply) is limited, it is better than the previous month,” the trader said.
Another trader quoted $130 to $150 premium to the April and May contracts, slightly lower than last week’s $140-$150 premium to the January and February contract.
Feb 15 - Spanish almond industry cuts prices to recover market share against California ( IHSmarkit )
- Average price difference has fallen by $0.5-0.8/kg between Spanish and Californian almonds from December-January
- Ramadan festival in North Africa, key to fuel Spanish sales
- The Spanish almond industry has lowered prices to recover market share lost against the Californian in the EU as prices of the former were much higher than the latter, according to the Spanish trader Hispania Nuts in its latest market update.
- Spanish Comunas have fallen by €0.40-0.50 ($0.42-0.53) per kg to €3.80/kg between December-January when Californian prices increased by $0.10/lb to $1.55-1.60/lb in the Spanish market, a key delivery market due to its strong processing activity, thanks to record US exports to Asian and Middle East markets against the European markets, which are still quiet. That means that Californian almonds are sold at €3.65/3.70/kg, a €0.10 difference with the Spanish, far from the difference of around €0.70 reached in Q4 2022.
- European markets have still abundant stocks, waiting for Californian bloom and initial production forecasts to launch bids in Q1 2023. That means, Spanish prices will rely on two factors:
Price trends led by California
Campaigns to cover the demand during the Ramadan in North Africa and the Easter festivals in Europe
There are not production estimates for Spain’s 2023 output. Rainfalls have been abundant in Q4 but not enough to conclude with drought effects and irrigation restrictions.
Feb 15 - Weak Indian demand for guar seeds cuts gum prices ( IHSmarkit )
- 11% m/m fall in spot prices
- Exports closed 2022 with a 13% increase
- 14% m/m fall in futures prices for deliveries from March-June
- Indian guar gum spot prices have started a bearish trend due to weak domestic demand for seeds, although it is not expected to fall below INR12,000/quintal ($145.14/quintal), according to the Indian consultant SMC Global Securities in its latest market update. India’s guar gum spot price averaged INR12,317.9 per quintal ($169.3/quintal) at the Jodhpur wholesale market on 14 February 2023, 11% less month-on-month and 1% more year-on-year.
- Indian guar gum exports rose by 13.0% y/y to 248,090 tonnes, valued at $489.6 million (+53% y/y) in 2022. The US (78,210 tonnes, +15.76% y/y), Russia (35,946 tonnes, +14.5% y/y) and Germany (29,553 tonnes, +11.9% y/y) were the main importers, accounting for 31%, 14% and 12% (volume), respectively.
Feb 15 - West African in-shell cashew season gets under way ( IHSmarkit )
- Ghana prices are higher than expected
- Ivory Coast has raised minimum farmer price from year-ago levels
- India had a strong kernel consumption season
The West African in-shell cashew season has opened in Ghana on the basis of smaller volume trades which are well above earlier price expectations. In its January market report Olam Nuts observed that processors in India have been very active, while Vietnam processors have been on their annual Tet break and most of the industry resumed work in the week of its report, so activity there was nil.
The company also commented on the Ivorian government’s recent declaration of CFA315/kg ($0.51/kg) as the minimum farmer price against CFA305/kg last year, noting that converted to in-shell this is about $30.00/tonne higher versus last year, including the export levy. The factor which is still unknown is the cost of production increase as the shell realisation is not at the same levels as last year, Olam Nuts added. Nigeria is expecting a better crop than last year in which there was a reduction of more than 30%.
- So far the weather conditions remain favourable across all cashew growing areas including Asia. It’s yet to be seen if the sun drying period will also be favourable for the cashew sector. Last year, ongoing showers severely impacted the crop quality.
Cashew kernels
- Cashew kernel demand is focused on spot and nearby shipments.
“With in-shell pricing yet to be discovered it’s not a big surprise to see limited forward offers as risk appetite across the industry is low due to so many unknown factors from cost of production to funding. Kernel processors in Vietnam will have a very tight working capital season ahead and loans are limited. This may lead to a constant spot coverage from an in-shell perspective which results in tight kernel supply,” Olam Nuts remarked.
- The company observed that main destination markets remained inactive during January, with coverage beyond March/April being extremely low. The tendering season in Europe is around the corner and demand will start popping in from the US, particularly on both snacking and ingredient items.
“India has had a tremendous kernel consumption season and beaten all-time records with more than 1.0 million tonnes of in-shell imports. China is likely to enter this season without any further Covid-19 restrictions, which resulted in already better activity versus last year same period,” Olam Nuts noted.
It added that the Middle East is another emerging and growing market and currently in the middle of its main Ramadan coverage season which will start in the last week of March.
The spot kernel market is still trading at a disparity versus new crop in-shell pricing. This phenomenon worked out last year due to better shell realisation into the energy industry. This year there might not be this benefit for the kernel processors, so at this point the downside looks very limited.
Feb 15 - StoneX projects Brazil’s 2023/24 coffee output to rise 4.3%
- Farmers are expected to harvest 62.3 million 60-kg bags of coffee in the 2023/24 season (July/June), 4.3% more than 59.8 million in the previous year, broker and consultancy StoneX said after completing a tour to main producing areas. StoneX projected production of
- arabica coffee at 40.7 million bags, 6.4% above 2022/23.
- robusta coffee at 21.6 million bags, only 0.6% higher.
It found that the crop, although larger than the last, will not grow as initially expected as effects from a dry period in the second half of last year hurt the flowering stage.
There were very good rains from December onwards, but that will not much change the size of the crop.
The brokerage visited around 100 municipalities in the states of Bahia, Espirito Santo, Rondônia, Minas Gerais and São Paulo.
Despite the inversion of the biennial arabica cycle, after drought and frost in recent harvests, the company ruled out the possibility that this year's production could surpass the historic mark of 2020 (67.6 million bags), when the arabica crop totaled 47.6 million bags. The consultancy said that the southern region of Minas Gerais, Brazil's main coffee producer, was "greatly impacted by the dry climate and, mainly, by the frost" of 2021. It also recalled that the Cerrado of Minas Gerais was one of the most affected regions of the 2021 frost, "which drastically changed the production trend in the region and the biennial cycle of coffee".
With regard to robusta, StoneX pointed to an expectation of a 1.6% drop in output in the main producing state, Espírito Santo, to 15.1 million bags. On the other hand, it expects increases in the harvests of Rondônia and Bahia.
The harvest usually starts around April or May for the robusta type, and around June or July for arabica.
Feb 14 - Madagascan government maintains minimum vanilla price at $250/kg (IHSmarkit)
- Authorisations to sell at $140/kg until 10% of authorised volume
- 15-day period to sell out licensed volume once exporter signs agreement
Madagascar’s government has updated its rules for the 2022-23 vanilla season, maintaining the export price at $250/kg fob and forcing authorised exporters to sell out licensed volume in a 15-day period once they sign agreements.
In case they cannot sell out, their authorised volumes will be redistributed by the state with the rest of exporters under a new agreement.
In addition, it authorises to sell vanilla cuts at $140/kg (until 10% of volume) if the exporter can justify that international markets are forcing them to do so. The government will inspect and analyse how sales are working during the season through customs inspections to secure average quality.
Feb 14 - Russia’s sugar production hits 5.882 million tonnes on 13 February (IHSmarkit)
- Russia produced 5.882 million tonnes of beet white sugar in the 2022/23 campaign as of 13 February, or 450,000 tonnes more than last year, according to the Russian Sugar Producers Union (Soyuzrossakhar).
The sugar was produced from 43.2 million tonnes of beet, implying an extraction rate of only 13.6%. This is down sharply from 14.5% last year and compares with a five-year average of 14.95%. In fact, it is the lowest sugar extraction rate since 13.16% were realized in 2016/17.
There were only two out of 65 sugar factories still in operation (in Tambov region and Altai territory), which means that the full-season totals will not be significantly different from these numbers.
Russia’s total sugar production, including the off-season processing of molasses and syrups, is therefore seen reaching around 6.1 million tonnes this year, up from 5.6 million last year and the largest since a record 7.8 million tonnes were produced in 2019/20.
Feb 14 - Daily Cocoa Futures Market Report
- The firm opening (GBP 10 / May 23 LDN) at GBP 2019,as well as the resulting gap between GBP 2015/19, set the tone for the rest of the day right at the start. The gap was closed quickly, however, and fundamental and speculative buying then took May 23 to a new contract high of GBP 2049. Supported by further weak weekly arrivals figures in Côte d'Ivoire and news of a possible default by local exporters of around 150,000mt due to a shortage of cocoa beans, the market had a firm grip. Closing price May 23 GBP +34 at GBP 2043. Next technical resistance would be further at GBP 2059 and thus not too far away. In the week to 12 February, only just under half the cocoa was delivered to the ports of Côte d'Ivoire compared to the previous year. Although total arrivals are still 1.4% above the last harvest, they are increasingly dwindling. It remains to be seen how the possible default can be resolved and how much tonnage is actually involved. However, the May / July 23 continued to strengthen and reached a new high of GBP +36. The structure in NY (except for the near March 23) turned towards inverse yesterday, despite good gradings and high stocks. We take up the statement of a futures broker, we too would like to have (once again) a Commitment of Traders Report.....
Feb 14 - Maharashstra sugar output seen down at 12.2-12.5 million tonnes (IHSmarkit)
- Maharashtra's sugar production may fall short of expectations this season, according to local press reports.
Over 200 mills were expected to crush 134.3 million tonnes of cane and produce 13.8 million tonnes of sugar. However, the prolonged monsoon has thrown a spanner in the works, with the cane yield dipping significantly. Millers are now expecting production of only 12.2-12.5 million tonnes of sugar, which is above an Indian Sugar Mills Assocation (ISMA) forecast of 11.7 million tonnes issued on 31 January.
On the other hand, the mills have been fairly regular with their payment to sugarcane farmers. As of 6 February, the sugar commissioner's office has received payment details from 202 mills in operation. Mills had crushed 63.5 million tonnes of cane and for this, they had to pay farmers a total of INR151.66 billion. Of this, INR132.76 billion has been paid to farmers, while INR22.97 billion is pending. Of the 202 mills that are operational, 76 have cleared 100% of their payment while 126 mills will have to pay arrears.
Millers, however, said the reduction in sugar production is not the only issue they had to face this season. While ex-mill sugar prices have stagnated between INR31-32 per kg, the decision of the central government not to provide additional export quota has hurt the cash flow of mills. "If mills were allowed to export 2 million tonnes more, the payment situation would have been much better," said a miller.
With the temperature getting warmer, farmers in Solapur and Marathwada have also expressed concern about the fate of their standing crop. Efforts are being made to ensure easy availability of water until the end of the season to avoid drying up of the crop.
Feb 14 - Indian cumin seed prices were stable over the last week (IHSmarkit)
- Demand from Gulfood exhibition expected to keep prices firm
- New crop arrivals will be the next turning point
- Indian coriander seed shows weakness
- Indian cumin seed markets remained flat over the last week in both the spot and commodity exchange, Spicexim noted in its latest market report. The company added that Indian cumin seed prices are expected to remain firm on Gulfood exhibition demand and thereafter they will follow the new crop arrivals trend. Conventional cumin seed was traded around $3,975 per tonne for nearby destinations and integrated pest management material. Indian cumin seed exports between April-November 2022 were 133,250 tonnes.
Due to the earthquake in Turkey and Syria no activities were reported.
- Coriander seeds
Indian coriander seed markets also remained flat to weak in the last week.
“We estimate it to continue to be weak in the near to short terms on the bumper new crop arrivals across Gujarat market yards,” Spicexim stated. Indian coriander seed exports from April-November 2022 stood at 28,150 tonnes. Indian coriander seed imports from Russia jumped substantially on a year-on-year basis, with volumes in the first eight months amounting to 23,000 tonnes. Out of total coriander imports of about 26,143 tonnes, Russia alone accounted for almost 88% of the total, Spicexim noted.
- Turmeric
The Indian turmeric market continued to be weak on arrivals of good volumes of new crop, particularly from Nizamabad. Export demand remains muted as buyers prefer to wait and watch. Indian turmeric exports from April-November 2022 were about 111,968 tonnes.
- Fennel seeds
Indian fennel markets remained steady to weak, as the new crop is expected to be a very good one. Colour quality is currently an issue and the appropriate time to cover will be in March/April, when prices should also become attractive. Indian fennel seed exports from April-November 2022 were about 14,962 tonnes.
- Cloves
The cloves market remains firm locally in India, compared with other markets as pipeline stocks are negligible. Traditionally, the high demand months are usually December and January in India.
Chillies
- The Indian chilli crop is expected to be 75% of that of last year.
This year, the seed quality availability is more than the original Byadgi quality. The original Byadgi quality is 60% in terms of volumes compared with last year and rates remain firm. Export demand from China and Bangladesh remains steady.
Feb 14 - Sesame Seed Update: February 2023 (IHSmarkit)
- Rising Chinese demand is fuelling prices for Sudanese, Nigerian, Tanzanian and Ethiopian sesame
- Paraguay recovers production thanks to abundant rains
- Uncertain outlook for Brazilian industry after disappointing exports to India in recent years
- Rising pressure on sesame seed exports after being declared as allergen in the US
- India
India’s new sesame seed (whitish) spot price averaged INR18,800/quintal ($227.9/quintal) at the Unjha wholesale market (Gujarat, north-east) on 10 February, 8% more month-on-month and 64% more year-on-year. Prices closed on 27 December at 16,500/quintal in a bearish trend as African shipments to China recovered. After several months with stabilised prices as the harvest was in full swing, the domestic crop may be behind the previous season and, as a result, imports may grow from November-December thanks to bumper crops in Nigeria, Sudan and Tanzania. Trading sources project an Indian autumn crop of 165,000 tonnes, down from the initial forecast of around 260,000 tonnes, due to heatwaves and severe drought. Indian exports were 219,906 tonnes, worth $392.6 million, in January-November 2022, 6% less y/y in volume and 5% more in value. The main importers of sesame were South Korea, China and the US, which took 19%, 7% and 6% of the volume, respectively. Imports reached 19,400 tonnes in January-November 2022, 15% less y/y. The main suppliers were Sudan and Nigeria, which accounted for 74% and 7%, respectively.
- The daily futures market prices on NCDEX were:
Deliveries in January 2023 closed at INR17,300/quintal on 20 January, stagnant m/m
INR18,840/quintal for deliveries in February 2023 on 9 February, 7% more m/m
INR18,940/quintal for deliveries in March 2023 on 9 February, 7% more m/m
INR19,045/quintal for deliveries in April 2023 on 9 February, 7% more m/m
INR19,150/quintal for deliveries in May 2023 on 9 February, 6% less y/y
South Korea has launched new tenders, fuelling Indian prices.
- China
Chinese imports reached 1.07 million tonnes valued at $1.6 billion, 9% less y/y in volume and 6% more in value. It imported 90% of volume from Myanmar (10%) and African origins (80%), leading suppliers being Niger (19.6%), Sudan (15.9%) and Togo (10.6%). Chinese purchases started to rise in Q3, after slowed deliveries from Q1-Q3 due to Covid-19 restrictions. This fuelled international prices.
- Sudan
Sudanese exports recovered strongly from January-September 2022, reaching 358,580 tonnes (+20% y/y), worth $406.7 million (+20% y/y), after a record-low of 449,200 tonnes valued at $508.5 million due to bottlenecks in Port Sudan as a consequence of political riots. The 2022 exports are expected to recover to pre-Covid levels and crossed the level of 600,000 tonnes due to a sharp increase in Chinese purchases. The 2023 crop might exceeed 1.2 million tonnes thanks to a high water level in the Nile basin, essential to secure a high yield. Reddish sesame is quoted at $1,480/tonne fob, and standard Sudanese whitish at $1,585/tonne, both 10-15% more than in Q4 2022. Gadaref whitish is currently offered at $1,650/tonne, unchanged from October 2022. 
- Ethiopia
Ethiopia closed 2022 with a record low of 108,710 tonnes (-34% y/y) valued at $184.05 million (-36% y/y). The main importers were Israel, the UAE and Singapore, taking 38.6%, 16.9% and 10.7%, respectively, of the volume. Chinese imports only accounted for 5.5% as Ethiopian exporters were not able to secure reliable shipments with huge volumes, essential for Chinese contractors to accept deals. Prices have experienced a real rally from September 2022-January 2023. Whitish Wollega grade 3-5 was quoted at $1,672/tonne fob Djibouti, 10% more m/m and 32% up from September.
- Nigeria
Nigerian sesame is being sold with discounts compared with East African origins such as Sudan and Ethiopia, due to its distance to the Middle East, India and China. Its prices averaged $1,558/tonne fob Lagos for mixed product, 8% more m/m and 4% more than in September. Exports fell by 33% to 237,770 tonnes in January-September 2022 due to low Chinese purchases. It is expected that Q4 2022 data revealed a strong recovery. However, the Chinese appetite for Nigerian sesame may diminish if Ethiopia expands its crop.
- Brazil and Paraguay
Brazilian exports closed 2022 with 42,880 tonnes (-34%y/y) valued at $58.2 million (-27% y/y). The main importers were Turkey, India and Mexico, accounting for 27%, 24% and 23%, respectively, of the volume. Brazil still has around 20,000 tonnes of carry-over stocks, exporters waiting for a bullish trend to sell them out.
Paraguayan international sales fell by 42% y/y in volume to 19,390 tonnes and by 29% in value to $35.4 million. The main importers were Japan, Mexico and Taiwan, which took 37%, 30% and 5% of the volume. Paraguay is expected to sell out its crop thanks to its long-term contracts with Japan and Taiwan. However, their high-quality requests make it hard to expand sharply the crop.
- Outlook
Most players expect bullish prices in H1 2023, with premium quotations for high-quality product. African sesame may cross the level of $1,600/tonne thanks to Chinese consumption recovery. India might have stable prices due to abundant African supply. South Korea is willing to pay high prices for Indian whitish sesame although many Indian traders are being rejected after sample analysis. Heavy rains have affected the autumn crop quality, many exporters being worried about European quality controls. Brazilian sesame is experiencing a turning point. International bullish prices might favour to strengthen its production expansion although many farmers are turning to more profitable crops such as corn and peanuts. Finally, prices for high-quality product are ready to rise after the US has declared sesame as an allergen, forcing producers to maximise quality controls.
Feb 13 - Daily Cocoa Futures Market Report
- May 23 ended the last trading day of last week slightly firmer at GBP +8 at GBP 2009, a full GBP 2 lower than last Monday's open at GBP 2011. The week saw a volatile weekly pattern, with a high of GBP 2038 and a low of GBP 1989, where price fixing from the origin and occasional price hedging from the industry balanced each other out. In the end, not much happened in cocoa.
- The Commitment of Traders figures, as per the reporting deadline of 7 February, will not be published until further notice.
- In the grading room, one BDU Nigeria (fresh arrival) and one BDU Guinea (regrade) went under the knife on Friday. Both BDUs passed the test.
Feb 10 - Asia Coffee-Prices in Vietnam inch up slightly, tepid trade in Indonesia (Reuters)
- Vietnam coffee prices rose slightly this week on growing demand for robusta beans as the new stock’s arrival was still a few months away in Indonesia and Vietnamese farmers were in no rush to sell their coffee beans, traders said on Thursday. Farmers in the Central Highlands, Vietnam's largest coffee-growing area, sold beans at 42,400 dong to 44,000 dong ($1.80-$1.87) per kilogramme, up from 41,900 dong to 43,700 dong last week.
“Some Indonesia-based buyers are turning to Vietnam for beans while farmers here are selling but not in bulk,” said a trader based in the coffee belt.
“Both qualities and quantities of Vietnamese robusta beans this crop year are at good level so farmers can benefit from the recovery of global demand.”
- May robusta futures on ICE settled down $18, at $2,057 per tonne as of Wednesday’s close.
- Vietnam’s coffee exports in January stood at 142,544 tonnes, down 27.7% from the month before, government customs data showed. Coffee export revenue for the same month reached $310 million, down 27% against December last year. Vietnam was forecast to have a crop of 31 million bags in 2023/24, up from 30 million in 2022/23, according to a Reuters poll released this week.
- In Indonesia’s Lampung province, one trader offered $110 premium to the March contract while another offered $140 to $150 premium to the February contract, largely unchanged from a week earlier.
“Prices stayed little changed since trade is still very limited because it is not harvest season yet,” one of the traders said.
The main coffee harvest in the southern region of Indonesia’s Sumatra island typically falls around mid-year but some areas may start producing coffee cherries around April to May. ($1 = 23,560 dong)
Feb 10 - Daily Cocoa Futures Market Report
- London cocoa opened and closed the day lower, mainly due to a report that the 2022/23 season could even end with a surplus, a marked change from other forecasters that thusfar expect a negative S&D balance for the crop year. As a result, we saw the daily high on the open at GBP 2018, quickly trading to the days low at GBP 1989 (range GBP 29) to close at GBP 2001 (-17). Despite the negative close, the market again found support vs. May23 and once again failed to break through the GBP 2000 level. Volume was manageable at just over 41k lots, with increasing trading activity on March23/May23, as the specs/funds continued their roll. Closing price of the H23/K23 spreads GBP -12.
Feb 09 - Daily Cocoa Futures Market Report
- With a GBP 18 range ( May23 LDN GBP 2014/20329, it was the second inside day of the London ka-kaomarket in a row. Closing May 23 GBP -7 at GBP 2018. Volume was also manageable at just under 25k lots. The dates of the 23/ 24 harvest (Dec 23 / Mar 24), closed a little lower at GBP -11 and GBP -14 respectively. First industry covers? We dare to doubt it, as the market is waiting for the recommendations of the working group, which are to be published at the end of the month.
- A Reuters poll of 11 traders / market participants shows a closing price in 2023 of GBP 2000 or $2788 and a more or less balanced crop year with a deficit of 70,000mt. Clearly too early, of course, to make concrete statements but an interesting sentiment picture that is not clearly bearish.
Feb 08 - Daily Cocoa Futures Market Report
- With an inside day, London halted for the time being. The May23 tested support around GBP 2010, but good buying interest set in as volume increased. At the other end of the range, it was in turn not enough to leave behind the highs from the beginning of the week. Even the continued weakness of the British pound, unlike the previous day, did not bring the necessary support here. Instead, the market rippled through the day in a GBP 22 range. The front Mar/May23 spread, on the other hand, showed its vital side and marked an intraday low of GBP -9, but then ran back up to GBP+14 and closed at +7. Market participants, certainly led by specs, are starting to roll their position as the change in open interest shows: Mar23 -2400 / May23 +2389...otherwise, we continue to wait for news from the origin that could set some impulse.
Feb 07 - Rabobank cuts 2023/24 global coffee surplus to 1.6 million bags
- The global coffee supply balance in the 2023/24 season is expected to be nearly balanced between production and consumption as the Brazilian crop will grow only slightly this year, Rabobank said on 1 February. It now sees a small surplus of only 1.6 million 60-kg bags in the global 2023/24 coffee supply balance, down from a previous estimate of 4 million bags. It sees Brazil’s 2023 crop at 67.1 million bags compared to 63.2 million bags in 2022.
- Carlos Mera, head of research for agricultural commodities, said in the report that despite general worries about demand, that is still expected to increase, although at smaller rates. The report sees an increase of 1.6% globally, "well below the typical 2.3% annual growth rate seen in the two decades before the Covid-19 pandemic". A separate report from the bank a day earlier confirmed a fall in sales by volumes from some of the leading coffee companies in the United States, the world’s largest consumer, after sharp price increases.
- Rabobank expects Colombia’s production to recover from a poor 2022/23 season when the country - the second largest arabica coffee producer - harvested only 11.8 million bags. It sees Colombian coffee output at 14 million bags in 2023/24.
- Vietnam’s crop is expected to grow 500,000 bags to 29.5 million bags in 2023/24.
- Total global demand for coffee in 2023/24 was pegged at 173.2 million bags, while production was projected at 174.8 million bags.
Feb 07 - Gradual fall in turmeric prices (IHSmarkit)
- 5-7% fall in futures prices
- 7% growth in exports
- Huge carry-over stocks of 170,000 tonnes are halting bullish trends, Indian processors cutting prices to sell them off.
- The Indian spot fob unpolished turmeric price averaged INR6,763/quintal ($81.97/quintal) at the Nizamabad market (Telangana state, South Central) on 6 February 2023, 3% less month-on-month and 24% less year-on-year. The polished product price averaged INR7,210/quintal, 2% less m/m and INR7,335/quintal, INR48 more m/m and 23% less y/y. The country’s global sales reached 148,625 tonnes, 7% more y/y, worth $165.2 million, in January-November 2022, 7% more y/y in value. The main importers were Bangladesh, the UAE and Morocco, taking 18%, 11% and 7%, respectively, of the volume.
- The updated daily futures market prices on NCDEX were:
INR7,384/quintal for deliveries in April 2023 (2022-23 crop) on 3 February, 7% less m/m
INR7,506/quintal for deliveries in May 2023 (2022-23 crop) on 3 February, 6% less m/m
INR7,628/quintal for deliveries in June 2023 (2022-23 crop) on 3 February, 5% less m/m
Analysis
- Traders are forecasting prices above the INR7,000/quintal level for the 2022-23 season, once the Indian government has set the minimum support price (MSP) at INR6,850/quintal. However, farmers may cut planted area for the next season as prices are close to matching production costs.
Feb 07 - Daily Cocoa Futures Market Report
- A weak British pound provided further support in the market yesterday. The May 23 finally broke out of the range it had seen, overcoming resistance at GBP 2023 / 2025 and reaching a new contract high of GBP 2038. The March / May 23 spread narrowed from GBP -16 to level before sell orders weakened the spread again (closing GBP -6/-8). This, briefly noted, all happened in the first half of the day. The May 23 LDN ended the day at GBP +12 at GBP 2025. Resistance, from a technical perspective, should set in just below GBP 2060 / May 23. However, the origin is standing by with further price fixes for the near term.
- Arrivals in Ivory Coast continue to weaken, with 49,000mt coming into ports on a weekly basis, down from 78,000mt a year ago. The fifth weaker arrivals in a row. In total, however, the current crop is still up 3.5% on the previous year.
Feb 07 - Global surplus to prompt drop in coffee prices (IHSmarkit)
- Arabica coffee prices are forecast to post an annual drop of 12% in 2023, with a large crop in Brazil expected to lead to a global surplus in the 2023/24 season, a Reuters poll of 10 traders and analysts shows. Prices were seen ending 2023 at $1.48 per lb, down 15% from Friday’s close (3 February) and 12% lower than levels seen at the end of 2022, according to the poll’s median forecast.
- Robusta prices were seen ending 2023 at $1,900 per tonne, down 6% from Friday’s close but 6% above levels at the end of 2022.
- Poll participants said the size of the 2023/24 production would play a key role in determining prices with some uncertainty about whether the huge crop that had initially been expected will actually be harvested. Brazil’s coffee crop in 2023/24 was forecast to climb to 67.1 million 60 kg bags, up from a median estimate of 61.5 million bags for 2022/23. The median forecast was, however, below the consensus of 71 million bags in a Reuters poll issued in July 2022 with the crop not developing as well as expected possibly because the trees were not healthy enough after a very dry winter. Vietnam was forecast to have a crop of 31 million bags in 2023/24, up from 30 million in 2022/23.
- Larger crops in Brazil and Vietnam were seen leading to a global surplus of 3.35 million bags in 2023/24, compared with a deficit of 4.15 million in 2022/23, according to the poll’s median forecasts.
Participants also cited the potential for curtailed demand - due to high retail prices and a global economic downturn - as a factor in the bearish outlook for prices.
Feb 06 - Daily Cocoa Futures Market Report
- Once again, the GBP 2000 level, as well as the 10-day moving average / May 23 at GBP 2002, provided support. GBP 2000 marked the low on an otherwise quiet trading day (range May 23 GBP 2000/2019), which the May 23 term ended at GBP +1 at GBP 2013, almost unchanged. The only outstanding factor was the near March / May 23 spread, which diverged to GBP -16 on ample volume (just under 20k lots).
- Due to technical problems or a possible cyber attack, some clearing houses could not report their position. Therefore, publication of the latest commitment figures will be delayed by a few days.
Feb 03 - Asia Coffee-Vietnam market faces thin supplies on high discounts (Reuters)
- Trading in Vietnam has resumed after a week-long Lunar New Year break but supplies were thin as farmers were reluctant to release beans on high discounts offered by buyers. Farmers in the Central Highlands, Vietnam's largest coffee-growing area, sold beans at 41,900 dong to 43,700 dong ($1.79-$1.86) per kilogramme, up from last week's 38,900 dong to 41,100 dong range.
One trader in Vietnam offered 5% black and broken-grade 2 robusta at a discount range of $150-$180 per tonne to the May contract, compared with the $90 discount a week ago. Another trader offered a $200 discount to the same contract.
“High discounts discouraged many to release beans,” said a trader based in the coffee belt.
“Low supply at the time Vietnam being the world’s main robusta supplier has triggered a concern over short-term shortage.”
- May robusta futures on ICE gained $98 over the past week, settling at $2,042 per tonne as of Wednesday’s close.
- Vietnam exported 160,000 tonnes of coffee in January, down 30.9% from a year earlier, government data showed. Coffee export revenue in the month fell 29.8% to $352 million.
- Meanwhile, Indonesia exported 16,152.89 tonnes of Sumatran robusta coffee beans from the province of Lampung in December, down 51% from the same month last year, official data showed. Indonesia’s robusta beans were offered at a $130 premium to the April contract this week, one trader said. Last week the premium was $130 to the March contract.
“Incoming beans are lower because the harvest is still months away,” the trader said.
Another trader offered a premium of $130 to $170 to the May contract this week, compared with the premium of $180 to $190 to the February contract.
“Trading houses are offering varied prices, depending on their remaining stocks,” the second trader said, adding buyers are turning to Vietnam for cheaper beans. ($1 = 23,449 dong)
Feb 03 - Daily Cocoa Futures Market Report
- With an uneventful trading range of GBP +10 / -10, Ldn cocoa ended the day unchanged for the second month at GBP 2012 basis May 23. Consistent with the previous days, the tension lay with the March/May23 front spread, which traded temporarily negative yesterday to eventually exit at GBP 0 which could further tempt the Funds/MM's to earlier roll the front end positions into May.
- While the Fed raised interest rates by +0.25 percentage points to 4.75% on Wednesday, the BOE and ECB followed suit on Thursday, raising rates by 0.5% to 4.0% and 0.5% to 3.0%, respectively. All rate hikes came in line with expectations.
- Yesterday's news from the IVC: The CCC started distributing electronic cards to cocoa farmers on Thursday to improve price and supply transparency. A well-received initiative that greatly benefits farmers. Côte d'Ivoire exported 324,478 tonnes of raw cocoa beans from October to December 2022, down 15.2% from the same period last year. In turn, Côte d'Ivoire reported 5% higher exports in October-December compared to the same period last year.
Feb 02 - Daily Cocoa Futures Market Report
- While London traded in a less spectacular range of GBP 21 with a second month high of GBP 2024 basis May 23 (closing GBP 2012), the day was not entirely uneventful. Essentially, the focus was on the front spreads, which caused the structure to be under much more pressure than in previous weeks. Thus, the front Mar/May 23 spread traded to lows of GBP 9, which was last the case a good 5 months ago (Dec22/Mar23). Perhaps the structure is now shaking, although a reversal into carry is still a long way off, the Mar23/Mar24 is still trading GBP 112...
- While the Fed adjusted the interest rate by +0.25 percentage points to counter US inflation, Ghana, known to be severely struggling with inflation beyond 40%, reported purchases of 440k mt of export-ready cocoa, 54% above last year, but 130k mt below the record year before.
Feb 01 - Green Pool expects global sugar deficit in 2023/24
A global sugar deficit of 1.01 million tonnes is projected for the 2023/24 season, ending a run of three successive surpluses, analyst Green Pool said on Tuesday in its initial forecast for the crop year. The Australia-based sugar and biofuels analyst's report said that it expect global production to falter, particularly in India, Pakistan and the European Union. Consumption, meanwhile, is projected to rise, albeit at a slower rate than in the previous season.
Feb 01 - Daily Cocoa Futures Market Report
- "Like moths around the light, just like you and me". Loosely interpreted from a well-known German pop song, the cocoa market (us?) is the "moth" and the "light" is the GBP 2000 mark of the 2nd month. We've talked about its appeal before. The May 23 sought (and found) support at this level, which also marked yesterday's low. The May 23 ended the day, on miserable volume, at GBP -11 at GBP 2007. By the last trading day of January, there was significantly more activity in NY. Less in the price level, more in the front March / May 23 spread. Rolls of index longs lowered the near spread to a $53 discount, with still good volume of 15k lots (more than the gross turnover in London).
- As of 05.01, graded & sealed arrivals in Ghana stand at 286,000mt, up 54%.
Jan 31 - Vietnam cashew kernel exports end 2022 nearly 15% lower y/y (IHSmarkit)
- Harvesting of new crop is under way in Vietnam
- Low kernel prices are ‘stimulating demand’, European brokers and traders report
- Vietnam’s exports of cashew kernels declined 9.4% last December from the volumes shipped in the same month of 2021. The December 2022 quantity reached 45,469 tonnes. This brought the full year (January-December) Vietnam cashew kernel exports to 519,029 tonnes. 14.8% down year-on-year. Ho Chi Minh City-based supplier Golden Bridge observed this was the lowest full year volume since 2020 and 2023 is predicted to be another difficult year.
- December 2022 shipments to the US fell 10.8% to 10,564 tonnes while January-December shipments to this destination were 23.7% down at 122,677 tonnes.
- Vietnam’s cashew kernel exports to China plunged 45.9% in December 2022 to 3,844 tonnes and by 20.1% for the full year to 51,392 tonnes.
- Shipments to the EU and other markets were only 0.5% behind last December at 31,061 tonnes but 10.1% lower for the 12 month period at 344,960 tonnes.
- Golden Bridge recalled that the Vietnam cashew market passed January with prices stable at bottom levels and this situation has been prolonged for 10 weeks from mid- November 2022 to now. The annual Tet holidays are now also over and all factories will resume from the beginning of February. Harvesting of the new crop has started with small volumes and compared with the last crop, starting prices are much lower.
- Dutch edible nuts broker Global Trading & Agency noted in its latest market report that the cashew nut market remains an interesting one. Raw cashew nut (RCN) prices are high while kernel prices are low.
“The interesting kernel prices are stimulating demand. You see more and more products showing up containing one way or another, this lovely nut. RCN imports in India are significantly up while Vietnam RCN imports are down but the total imports into those two countries are showing an increase which is promising for the industry. India, the biggest consumer of kernels is not exporting a significant amount of kernels while the Vietnamese kernel export was down in comparison with the previous year,” the company noted.
- Global Trading suggested that a carry-over with a reasonable to good crop expected in Vietnam and Cambodia will not create any urgency for the processors to buy in West Africa. “Therefore we expect RCN prices to come under downwards pressure which is needed for the processors to create a sustainable supply chain,” it added.
- With kernel prices at “very interesting” levels Global Trading recommends covering for the nearby until new crop comes in, i.e. April/May 2023. “If current prices fit your calculations then do not take a risk and cover what you need. A slight increase in demand can immediately cause an increase in prices while the downside is very limited,” it concluded.
Jan 31 - Global turmeric industry faces flat prices despite falling crops (IHSmarkit)
- Carry-over stocks: 170,000 tonnes
- Falling crops in all the key origins: India, Myanmar, Nigeria, Ethiopia, Vietnam and Indonesia
- India’s 2022-23 turmeric crop is expected to reach 1.31 million tonnes, slightly down from 1.32 million tonnes in the previous season due to the combination of falling acreage in traditional origins due to low prices and heavy rains, according to a presentation at the International Spice Conference, held in Chennai from 20-22 January.
- Carry-over stocks are forecast at a record of 170,000 tonnes, stabilising prices.
- Maharashtra, the largest origin, is expected to have a bumper crop of 405,000 tonnes, 10% more y/y. The rest of the origins (Telangana, Karnataka, Tamil Nada, Andhra Pradesh and North East) are projected to have falling crops.
Minor origins
- India is the main global supplier, accounting for 80% of the global production. It is also the main global consumer and exporter, its prices leading the trends in other minor origins such as Myanmar, Nigeria, Ethiopia, Vietnam and Indonesia.
- Myanmar has been traditionally focused on exporting turmeric to Indian processors, particularly for oil. However, Myanmar’s exports have slowed since 2019 due to political riots and international sanctions. Its 2022-23 crop is projected at 19,500 tonnes, 500 tonnes down from the previous season.
- Ethiopia and Nigeria are the main African origins. Their farmers have cut the planted area, turning to more profitable crops such as cereals, ginger and sesame. Ethiopia’s crop is expected to be stagnant y/y at 3,500 tonnes in 2023 and Nigeria may fall by 20% to 2,000 tonnes.
- Vietnam and Indonesia are also relevant suppliers with falling outputs due to low prices. Vietnam and Indonesia are expected to fall by 12% to 5,000 tonnes and 13,000 tonnes, respectively.
Jan 31 - Indian coriander seed prices continue to fall due to abundant supply (IHSmarkit)
- 17% fall in exports
- 7-8% fall in futures prices for deliveries from April-June 2023
- Indian coriander spot price averaged INR8,329/quintal ($102.1/quintal) at Kota (Rajasthan, North India) wholesale market on 30 January 2023, 7% less month-on-month and 14% less year-on-year.
- Indian exports fell by 17% y/y in volume to 39,197 tonnes but grew by 13% in value to $65.8 million in January-November 2022, according to customs data.
- The main importers of whole coriander (75% of the total exported volume) were Malaysia, the UAE and China, with 10,296 tonnes (-3.4% y/y); 3,284 tonnes (-5.6% y/y); and 3,279 tonnes (+37.8% y/y).
- The updated daily futures market price on India’s National Commodity & Derivatives Exchange (NCDEX) was:
Deliveries in January 2023 closed at INR 7,322/quintal on 20 January, 9% less m/m
INR 7,840/quintal for deliveries in April 2023 on 27 January, 8% less m/m
INR 7,904/quintal for deliveries in May 2023 on 27 January, 7% less m/m
INR 7,968/quintal for deliveries in June 2023 on 27 January, 8% less m/m
Analysis
- High prices in 2022 have encouraged farmers to expand the coriander planted area as the eastern European growers have done because Russian exports have halted due to international sanctions. In addition, the Indian average yield is expected also to grow due to favourable weathers, cutting prices.
Jan 31 - World pepper production forecast to be slightly higher this year (IHSmarkit)
- However, Covid-19 pandemic had an adverse impact on output in recent years
- Vietnam remains the dominant producer and exporter
- Rising farm input costs have made trade much more challenging
- Global pepper production is expected to be recover moderately this year, according to figures given at the International Spice Conference, held in Chennai, India, from 19-22 January. However, the same presentation noted that world pepper farmers struggled to maintain their pepper farms during and after the height of the Covid-19 pandemic. It was observed that even the larger scale pepper farms were neglected due to unavailability of labour and higher farm input costs.
- The international pepper market post-pandemic also suffered from lower returns; curtailed demand; higher inventories and supply chain disruptions.
Vietnam. Meanwhile, Vietnam continues to dominate global pepper markets with an estimated market share of 42%. Brazil ranks second with 20% and India third with 10%. Indonesia is close behind with 9% share, then there is China with 6%, Sri Lanka with 4% and Malaysia 3%. The peak months of Vietnam’s pepper harvest are from February-April. As things stand currently, Vietnam’s 2023 crop is expected to be up from that of last year at 225,000 tonnes versus an estimated 200,000 tonnes previously. Vietnam pepper exports showed a continued decline in 2022.
Brazil
- Espirito Santo is Brazil’s main pepper producing region, accounting for 65% of the total volume. Para accounts for 28%, Bahia 6%, Alagoas 1%. Total production in 2023 is expected to rise to 108,000 tonnes from 104,000 tonnes last year.
- It was noted that Brazil’s pepper exports to the US and Europe have decreased due to salmonella issues. However, Brazil’s pepper exports to Arabic countries have increased and the UAE now accounts for 13% of its export total.
- Low technological advancement and outdoor drying in unprotected, open spaces is being linked to higher contamination with pathogens and dried spices.
- Recent rains in Espirito Santo have impacted yields and once the situation stabilises the impact will be reported.
- Pepper farmers and exporters in Brazil are collaborating to implement sustainable programmes. Environmentaly friendly practices are being adopted and land titles are being granted by the government for sustainable and organic certification. Annual production of organic certified pepper is around 500 tonnes.
- Wood stakes are being replaced with living trees to support pepper vines and water conservation programmes are being implemented.
- Farmers are building green houses and reducing use of wood driers that emit smoke into the atmosphere.
- The leguminous tree gliricidia sepium has been widely disseminated for the sustainable cultivation of pepper in Brazil. Gliricidia sepium fixes nitrogen naturally in the soil, which can prolong the life expectancy of pepper vines and the leaves serve as fodder for animals.
- In addition, some farmers have used moringa oleifera and azadirachta indica (commonly known as the neem, nimtree on Indian lilac).
Indonesia
- Indonesia harvests its pepper crop from July-October. This origin is the largest producer of white pepper as well as being a prominent black pepper producer.
- Lampong is its main black pepper area and Banka Belatong for Muntok white pepper. East Kalimantan and Sulawesi also produce white pepper, mainly for local consumption.
- Indonesia’s farmers for black pepper have been shifting to alternative crops such as cassava, rubber and palm oil due to prevailing low prices of pepper.
- Not many Indonesian farmers have the resources to indulge in environmentally friendly production processes.
- Extreme weather has impacted overall productivity.
- The 2023 crop is predicted to be smaller than that of last year (52,000 tonnes) at around 48,000 tonnes.
- Indonesia’s area under pepper cultivation has reduced by nearly 25% when compared with 120,000 hectares recorded in the 1990s.
- Indonesian pepper production has declined due to consecutive years of drought and unremunerative prices.
- Vietnam continues to be the largest importer of Indonesian pepper (37% share), followed by China (20%), the US (12%), India (9%) and Germany (3%).
- Quality issues with Indonesian pepper could be aggravated by ongoing shortages of water.
- Indonesian pepper farmers have been shifting to drought-resistant crops, such as palm oil. Palm oil prices are soaring as a result of poor harvests of competing vegetable oils elsewhere in the world.
India
- India has remained a net importer of pepper for nearly a decade.
- Karnataka and Kerala are the key pepper regions, accounting respectively for 65% and 30% of the country’s total pepper planted area. The balance of 5% is from Tamil Nadu and other areas.
- High labour costs are discouraging Indian pepper planters from removing old vines and planting new ones.
- In general, more Indian pepper farmers are abandoning pepper plantations and are shifting to coffee, ginger and cardamom cultivation.
- The total 2022-23 crop is projected to reach 53,500 tonnes versus 57,000 tonnes in 2021-22.
- The area under production has fallen by 35-40% from what was seen in the early 2000s.
- Most Indian pepper farmers are reluctant to sell at current price levels which are insufficient to cover their production costs.
- Pepper is inter-cropped with other plantation ones such as coffee, tea and rubber.
- While some regions are showing healthy plant growth, above normal rains and prolonged monsoon have adversely impacted flowering and crop development in other regions.
Malaysia
- The state of Sarawak accounts for more than 98% of Malaysia’s annual pepper production. Black and white pepper is produced and exported from this state. The other producing areas are Suba and peninsula Malaysia.
- Malaysian pepper farmers have been badly hit by soaring fertiliser prices, which have doubled from those of 2001, following the Russia-Ukraine war. Fertilisers account for up to 70% of farm inputs.
- Malaysia’s 2023 pepper crop is expected to reach around 18,000 tonnes, which would be level with that of last year. Harvesting begins in May.
- Malaysia’s main export markets for pepper are Japan (37%), China (18%), Vietnam (11%), Taiwan (10%), Korea (3%) and Singapore (7%).
- Production losses have been evident in the last two years.
- Malaysian pepper farmers have been holding on to their produce in anticipation of Chinese demand boosting prices.
Sri Lanka
- Pepper is cultivated over an area of 40,000 hectares in Sri Lanka.
- Production this year is expected to be lower at 19,500 tonnes versus 20,400 tonnes last year due to a prolonged rainy season adversely impacting the crop, fuel shortages and issues arising from the hike in fertiliser prices and freight costs.
- No additional areas have come under pepper cultivation last year because prices were unremunerative.
- The country’s farmers have been complaining of low prices, stating that it has not been easy to manage their farms from the income earned.
- In most of the pepper growing areas, pruning of the shade trees has not been done. Light berries are expected to arrive by March-April. These qualities are predominantly sourced by extraction companies. Heavy berries are expected by May-June.
China
- China is known as a white pepper producer, most of which comes from Hainan province.
- Production is forecast to match that of last year at around 33,000 tonnes.
- China’s own imports of pepper have drastically reduced, impacting global demand.
Global consumption and price trends
- The presentation recalled that the 2018-19 season saw the highest pepper consumption in almost three decades. Prices collapsed to 10-year lows thereafter.
- Prices started to recover in 2021 on the back of lower production but the rise has been clipped by curtailing demand. “Prices are slowly moving into a consolidation phase,” it was stated.
- The price rally seen in the last quarter of 2021 fell through in the absence of follow through buying.
- Asia, the US and Europe collectively account for nearly 85% of the world’s total pepper consumption.
- Germany is the largest importer of pepper into Europe.
- Imports of Brazilian pepper into Europe have been hit by quality issues. Vietnam continues to be the largest pepper exporter to the US.
- Supply has outpaced demand and this can be seen in the unremunerative prices.
- Global production is set to improve as production losses elsewhere are adequately compensated by anticipated bigger crops in Vietnam and Brazil compared with last season.
- World pepper production for 2023 is estimated at 539,850 tonnes against 521,000 tonnes in 2022.
Jan 31 - Chinese ginger prices up and firm ( IHSmarkit )
- Wholesale prices peaked at CNY9 per kilo ($1.33/kg) in late December
- Prices remain firm in late January
- Peru may cash in from Chinese production fall in 2023
- The Chinese ginger market experienced a big fluctuation between November 2022-January 2023, following the drastic U-turn of the Covid policy. In January, the spot price remains firm amid tight supplies and recovering demand. In October 2022, the opening farmgate price was in the range of CNY5.2-6.6 per kilo ($0.77-0.97/kg) when new season gingers entered the market. There was a sudden spike in November, with the minimum farmgate price surging up to CNY6/kg. At Guangzhou Jiangnan Wholesale Market, the January 2023 average price climbed to CNY8.47/kg (+149% y/y and +13% m/m) for regular gingers (Chinese da rou jiang variety), an increase of 24% from November; the price peaked at CNY9/kg on 22 December 2022. Massive infections stimulated the demand and pushed up prices.
- One local source told S&P Global Commodity Insights that: “The strong demand was triggered by the massive Covid infections as gingers are traditionally used as a medicinal remedy when Chinese get flu and cold.”
“In 2022, the national planted area shrank by 30-40% y/y compared with last season, leading to a production fall,” he added. Since the second half of 2022, Shandong and other producing regions were hit by continuous rainfalls which caused some crop losses.
- There are more trucks going to the producing regions compared with the lockdown period. The flow of goods and logistics became smooth after the removal of the zero-Covid policy in early December. Vendors are able to visit the producing regions without disruption while downstream demand including foodservice are recovering. By late January, major Chinese cities have passed the peak of Covid infections, and the market situation for fresh gingers has calmed down slightly compared with the frenzied demand a month ago, but prices remain strong, and firm as downstream demand is reviving given increasing economic activities. On 29 January 2023, the farmgate price was mostly quoted at CNY6.4-6.6/kg, with the minimum price still higher than the starting point in October.
Trade
- In December 2022, China exported about 25,300 tonnes of fresh gingers, down 8% m/m and down 20% y/y, at an average price of $1,200 per tonne (4% up m/m and 43% up y/y). An exporter said that: “The December spot price for raw materials was very high. Processors showed little interest in packing the gingers for exports as the crop were still sold at the lower price quoted for the international buyers before the price hike in the domestic market. Towards the end of December, all stakeholders became used to the price increase, then exports and processing activities resumed slowly.“
- The strengthened export price impacted volumes to southeast Asian and some Middle Eastern destinations. Sales to United Arab Emirates decreased to 4,780 tonnes (-4% m/m) in December, Malaysia with 2,200 tonnes (-18% m/m), and Bangladesh with 1,000 tonnes (-58% m/m).
- However, exports to the US and Europe continued to be strong m/m in December without any price impact from November. Shipments to the US reached 3,200 tonnes (+13% m/m and -22% y/y).
- One exporter said that: “Compared with three to four months ago, the reefer rate has fallen to about $2,400 on the Asia to Europe route; and I would expect it to continue to soften in the coming months. Also, the Chinese yuan against the US dollar is weakening, which is positive for exports.”
Peru
- Peru is China’s main competitor in the global ginger market. Meanwhile, Peruvian exporters are optimistic about their export opportunities in 2023 given the Chinese production fall in 2022. In 2022, the US accounted for over half of Peru’s exports by volume, the Netherlands at about 20%. Peru’s export price was 30% y/y lower than the previous year, averaged at $1.29/kg in 2022, according to a Peruvian press outlet. For European destinations, Peruvian gingers were averaged at $1.04/kg, 26% lower y/y.
- S&P Global Commodity Insights met several Peruvian exhibitors at Sial Paris 2022. One source quoted organic fresh ginger at $1.25/kg fob, conventional at $1.17/kg fob in late 2022. Currently, the social protests have placed the logistics at risks and caused disruption and uncertainty for the export activities.
Jan 31 - Coffee prices extend rebound ( IHSmarkit )
- The stronger real discourages export selling from Brazilian producers
- The ICO Brazilian Naturals group indicator rises 4.7% week-on-week
- Robusta coffee prices supported by lower stocks
Coffee prices posted gains last week, extending recovery from a week ago, due partly to the strengthening of the real deterring selling by Brazilian producers.
- The ICO Brazilian Naturals group indicator rose 4.7% to USD1.77/lb from USD1.70 the previous week and 11.4% from USD1.59 two weeks ago.
- In Colombia, the ICO’s mild arabicas group indicator increased by 3.8% to USD2.24/lb from USD2.16/lb the week before and 7.0% from USD2.09/lb two weeks ago.
- The ICO’s other mild arabicas group indicator also ended higher last week at USD2.10/lb compared to USD2.03/lb the previous week and from USD1.99 two weeks ago. Arabica “C” futures on the ICE rose by 6.5% to an average closing price of USD1.65/lb and 10.6% from two weeks ago.
Robusta prices were supported by tightening stocks with the amount of exchange-certified robusta beans falling for five straight days. They hit as little as 6,334 ten-tonne lots (1.056 million 60-kg bags) on 22 January, a new 4 1/2-year low for the third straight day. Robusta ICE futures rose to an average closing price of USD2,018/tonne, against USD1,972/tonne recorded a week ago. Meanwhile, the other mild robustas group indicator hardly changed from the previous week’s USD0.97/lb, settling at USD0.98/lb.
Jan 31 - Cocoa prices end higher on production concerns and lower demand (IHSmarkit)
- Ivory Coast faces hot and unfavorable weather conditions
- Fourth quarter’s cocoa grinding falls in the North America, Europe, and Asia
- EU cocoa paste price up 2.7% week-on-week
- Cocoa prices surged last week amid crop problems in Ghana linked to swollen shoot virus outbreaks, according to Reuters. In Ivory Coast, hot and dry weather has affected most of the country’s cocoa-growing regions. There have also been concerns about weakening demand following recent year-on-year declines in fourth-quarter grinds in Europe, North America and Asia.
- Ivorian cocoa beans rose to an average of EUR2,642/tonne CIF Northern Europe last week, up 2% from EUR2,591 the week before but down 0.6% from two weeks ago. The differential was flat at EUR300/tonne.
- Ghanaian cocoa beans also increased, adding 1.9% to an average of EUR2,756/tonne CIF UK from EUR2,704 the previous week but down from EUR2,770 two weeks ago. The differential price was flat an average of EUR400 per tonne, the same level since the first week of January.
- Cocoa bean from Nigeria recovery by 2.2% last week, with an average of EUR2,437/tonne CIF Northern Europe against EUR2,386 the week before, but fell by 0.7% from two weeks ago. The Nigerian price differential remained at EUR120 per tonne CIF Northern Europe.
- EU cocoa butter prices rose by 2.3% to an average of EUR5,292/tonne CIF Northern Europe last week, from EUR5,174/tonne a week ago. EU cocoa paste prices ended at EUR3,995, up 2.7% from EUR3,892 a week ago. Meanwhile, EU powder prices was flat at EUR3,000/tonne, the same as the last two months.
Jan 31 - Daily Cocoa Futures Market Report
- As on Friday, the upward movement lost considerable speed but continued yesterday. The continuous 2nd month hit a new 11 week high of GBP 2027 and the highest close since mid-November with a GBP 2018 close (GBP +5 / May 23). Under the radar, the May / July 23 spread also continued to advance further in London. From the recent lows of just under 2 weeks ago, it diverged from GBP +18 to GBP +34, right at its late December highs. Technically, the 2nd month would still have room to run towards GBP 2059, where further technical resistance could set in.
- The reduction of the speculative long position (see yesterday's report) should have been mostly equalised as of yesterday.
- Arrivals in Côte d'Ivoire are at 1.544 million mt as of 29 Jan, up 5.7%. The flow of the crop seems to be slowing down, however, as it is the 4th consecutive weekly arrivals, which are now below the previous year.
Jan 30 - Daily Cocoa Futures Market Report
- In vain, the 2nd month London tried to break the highs of GBP 2021, from mid-January. This failed with a high of GBP 2020, only by GBP 1. Light selling interest / price fixing from the origin then put pressure on the market. At the end of the day, the closing price was GBP 2013 / GBP +7. Commitment of Traders as of 24.01. confirmed the market's slump in the last reporting period (17.01 - 24.01). The Managed Money faction liquidated a net 20,864 lots, almost equally divided LDN / NY and is now long 80,945. The Producer / Merchant category shorts gave up just over 11k lots of their position, which does not suggest an extension of the already short covering.
- The CCC signed an agreement with the United Arab Emirates last week to build another factory to produce semi-finished products. This brings the target of processing 49% locally long-simply within reach (theoretically).
Jan 27 - Daily Cocoa Futures Market Report
Even after just under a month, excluding Thursday's / Friday's downward excursion, the GBP 2000 mark / base 2nd month seems to have lost none of its appeal. May 23 reached a new high of GBP 2008 in the new mini uptrend that has been in place for a week. Closing price May 23 GBP +23 at GBP 2006, thus above the ominous barrier. After last Friday's lows of GBP 1928, the market has now rallied GBP 80 or just 4%. Quite an impressive performance despite the average volume. The March / May 23 spread also recovered from its lows at GBP +17 to end the day at GBP +27.
Jan 26 - Sri Lankan desiccated coconut industry closed 2022 with rising exports (IHSmarkit)
- 21% increase in exported volume
- Main importers: the UAE, India, Egypt and Iran
- Sri Lanka’s desiccated coconut exports closed 2022 at 43,750 tonnes valued at $96.5 million, 21% more year-on-year in volume and 11% less in value. The sharp fall in rupee value against US dollar due to Sri Lanka’s bankruptcy and International Monetary Fund intervention raised sales but at low prices, particularly in H2 2022.
- The main importers were the UAE, India, Egypt and Iraq, which accounted for 10.3%, 9.3%, 9.0% and 6.9%, respectively, of the volume.
- The fresh price averaged LKR84.1 ($0.22) per coconut in coconut auctions held on 19 January, 8% more month-on-month and 38% more y/y. The robust increase in price is due to a combination of inflation, the fall in the Sri Lankan rupee against the US dollar and supply scarcity.
- Wholesale desiccated coconut prices ranged from LKR500-590 for fine (+5% m/m) and from LKR580-600/kg for medium (+5% m/m) on 10 January, according to the Sri Lankan Coconut Development Authority.
Analysis
- Sri Lankan processors have cleared out supply of fresh coconuts, pushing up prices. The weak Sri Lankan rupee against the US dollar makes this scenario difficult, being aligned with Indonesian prices, which are traditionally sold with discounts against Sri Lankan and Philippine desiccated coconut. This outlook may encourage an expansion of the coconut crop in 2023.
Jan 26 - Guatemalan cardamom exporters withdraw from offering (IHSmarkit)
- Gulfood could be next turning point in prices
- Estimate for 2022-23 crop downgraded from earlier expectations
- Guatemalan cardamom prices declined to their lowest levels in about 10 years in Q4 2022 but gained 25% at local level last week mainly due to farmers not wanting to bring their cardamom to the market any longer. Albert Berisa of Rotterdam trader Catz International told S&P Global Commodity Insights that Guatemalan cardamom farmers did not want to sell at the current levels and many have already started to switch to alternative, more lucrative crops.
“Immediately that also reflected on the availability and offers as well as the prices internationally because now all of a sudden the majority of exporters are withdrawn from the market and are not willing to offer,” he added.
- This is despite the fact that the latest price indications on export material are around 20% higher than those of Q4 2022, Berisa noted. Marco Van der Does of Van der Does Spice Brokers confirmed that he was also seeing the withdrawal of Guatemalan cardamom exporters, adding that this was particularly the case with the mixed yellow qualities (MYQs). He recalled that the price fall in Q4 2022 coincided with the start of harvesting of the new crop and then subsequent arrivals of the first new crop material. Berisa added: “There is the potential for another rise,” Berisa said. “It also depends what happens in the Middle East because in February (20-24) there will be Gulfood in Dubai and usually around that time a lot of new contracts are being concluded by the largest Middle East buyers and of course the exporters, despite the fact that they have already sold about 70% of the production of this season, knowing that there is still demand from Saudi Arabia, Dubai and Northern African markets and other Middle East countries, such as Syria, Iraq, Iran and Egypt. If the demand is big at that time we can expect some more fireworks in terms of price increases for cardamom.” Van der Does noted that coverage ahead of Ramadan can be another key turning point.
Continuous demand
- In recent weeks there has been the usual ongoing demand from the Middle East and Asia. Most of the lower grades of cardamom have been sold so the main focus now will be on the green cardamoms and the seeds, which are usually the most expensive types. Van der Does observed that Asian buyers are currently absent due to the Chinese New Year and in Vietnam the Tet festival.
S&P Global Commodity Insights current price data shows Guatemalan bold green cardamoms of approximately 8 mm size at $13,500 per tonne cif Middle East. Seeds are at $8,000/tonne cif any destination and MYQ of minimum 360 g/l at $5,500/tonne cif any destination. Van der Does said he had seen offers on MYQs ranging from 340-360 g/l (depending on the supplier’s specification offer) even lower at $3,900-3,940/tonne c&f. Light green cardamoms could be obtained for $10,000/tonne c&f and bold greens at $12,500-13,000/tonne c&f. However, any such price indications remain academic for the time being with exporters not actually offering product for sale.
- Berisa suggested that if Gulfood spurs a substantial further upturn in demand then prices could increase by as much as 20% in a short space of time. He noted that the last 20 years has shown much more volatility in cardamom than previous years.
Lowered crop estimate
- Latest trade estimates put Guatemala’s 2022-23 crop around 44,000 tonnes, down from the earlier forecast range of 45,000-50,000 tonnes. The downward revision is attributed to farmers reducing collections of cardamom due to the low prices and cutting down some of their cardamom for the same reason along with adverse weather in some areas. Berisa noted that based on export volumes in 2022 he views the 2021-22 crop as likely to have ended up around 42,000-44,000 tonnes, added to which there was probably a carry-over of 2,000-3,000 tonnes. Cardamom plantings done three years ago have now reached their optimum capacity so from now onwards a decline is expected, unless Guatemalan farmers plant extra “which most probably they will not do because they are not enticed by the current price levels,” Berisa said. An estimated 20% of the current crop is still to be harvested and this is expected to continue into April as per the norm.
- In addition, there are collectors who are also holding on to stocks and not willing to release these until prices reach a more appealing (i.e. more lucrative) level. Moreover, there is stockpiling and speculation locally. Hence, there could be a decline in Guatemalan cardamom exports this year in view of exporters and collectors holding on to stocks which they purchased at lower levels and waiting for higher prices before they will sell these. Van der Does added that reductions in India’s maximum residue levels of pesticides – resulting from an expansion in the country’s Integrated Pest Management production and overall standards in this regard – means that this origin will now be able to export more of its cardamoms to meet EU standards. “That will take away some of the demand for Guatemalan cardamom,” Van der Does explained.
Jan 26 - Hazelnut buyers seen to be switching from Turkey to alternative origins (IHSmarkit)
- High prices driving hazelnut buyers away from Turkey
- Drought raises concerns for production in Italy
- Hazelnut buyers have switched from Turkey to other hazelnut producing countries such as Georgia, Azerbaijan, or Italy, according to a report from news and trading platform Mundus Agri posted on the website of UK company Chelmer Foods. Mundus Agri warned that drought will have a lasting impact on production in Italy.
Big TMO gamble in Turkey
- Mundus Agri added that suppliers in Turkey are waiting for disaster to strike.
- The issue is that although the Turkish Grain Board (TMO) may have only purchased around 131,000 tonnes of in-shells this season, these supplies will eventually have to be sold along with last season’s carry-ins. Due to the upcoming general election in May and the presidential election in June, the government, however, has no interest in lower prices currently.
“The TMO’s full warehouses will become a burden if this year’s crop is good. Prospects are highly encouraging so far as the shrubs are developing well, and there are enough male flowers. The problem, however, is that the weather is too warm. This may spark early blooming and render the crop more vulnerable to sudden frosts in spring,” Mundus Agri added.
- Olivier Telvi of UK trader Ronly Gida Limited, which represents the Turkish hazelnut processor Ronly Gida, observed on Wednesday (25 January) that prices have increased significantly in the past week due to the unseasonably warm weather that is currently hitting the major growing areas on the Black Sea coast.
“This has caused sellers to pull back as they wait to see if an early bloom will come into affect, increasing the chances of frost affecting the 2023 crop. This has caused further problem for buyers who were already trying to adjust to the higher prices after the TMO activity in December caused prices to rise,” Telvi added.
High prices deter buyers
- Mundus Agri’s report of a few days earlier observed that raw hazelnut prices have risen slightly, although the last few days were relatively uneventful.
“This trend is partly driven by exports and Ferrero and Mondelez having purchased more than anticipated. Although the demand is reportedly low, shipments were surprisingly strong in the last week of 2022. Turkey exported 10,626 tonnes of hazelnuts in the week ending on 1 January. This figure dropped to 2,665 tonnes in the week ending on 8 January and recovered again to 5,972 tonnes on 15 January. Exports will have to pick up in the second half of the month, if performance is to remain on track with recent years. January exports exceeded 25,000 tonnes in the last three years. Total exports have climbed to 138,955 tonnes worth $793 million this season so far,” Mundus Agri explained.
- However, the news portal warned that exporters, however, have little chance of attracting buyers currently as prices are simply too high, with suppliers reporting that many customers are turning away.
“Enormous price gaps have prompted European buyers to turn to Italy, Azerbaijan, and Georgia. Buyers in China are also waiting for better prices, and many still hold enough stocks in their warehouses. Suppliers are, however, convinced that attention will shift to Turkey again as soon as supplies become more limited in other countries,” Mundus Agri stated.
Drought impacts in Italy
- Prolonged drought in Italy is expected to have a sustained impact on this year’s production in this country.
- On the positive side, sales have been surprisingly good in the current season so far, despite electricity costs doubling and shipping increasing.
- The quality turned out to be quite good, despite peeling being more difficult. The effect of last year’s persistent drought, however, is that male catkins are scarce this year, which will limit pollination. Producers in Piedmont are also highly concerned over the present lack of precipitation. If it fails to rain soon, all their efforts to limit the stress for the shrubs will have been in vain, Mundus Agri stated. They currently expect production to be similar in size to last year.
Jan 26 - Daily Cocoa Futures Market Report
- With yesterday's intraday high of GBP 1992 and a closing price of GBP 1983 (+7), the second month is slowly making its way back to the 2000 mark. The hardly sensational volume of around 25k lots was distributed, as expected, in the majority on the front Mar/May23 spread (14.5k lots), which once again came under pressure as far as -16, but made up ground for the first time in days (closing GBP 20). However, with some 5.6k lots , Dec 23 ranks 3rd in yesterday's trading volume, i.e. in the period of the upcoming 2023/24 main crop. The structure is holding reasonably steady in the rest of the board as well, although still inverse, and a reversal is still some way off. The open position decreased by 1500 lots in the first month. The grading room also resumed work and granted a BDU fresh Nigeria a new certificate.
Jan 25 - Global pepper market keen to see return of Chinese buyers (IHSmarkit)
- Vietnam inactive for the time being
- Export challenges for Brazil
- The international pepper market has started the new year slowly with buyers waiting for the passing of the Chinese New Year. In addition, Vietnam is closed this week for its annual Tet holiday.
- Albert Berisa of Rotterdam trader Catz International told S&P Global Commodity Insights: “The expectation is that the Chinese would come into the market again because now they have relaxed their strict measures on Covid – the zero Covid policy is no longer there. Normally, that should lead to more activity and also to more demand. Of course the question remains to what extent they are covered and will the impact be huge?” Berisa added that initially the impact will probably not be substantial because it will take some time in China for the situation to normalise. Nevertheless, the possibility of an upturn in raw material demand remains. The other unknown is whether China will purchase just what it needs or whether it will look to build up its stocks of pepper. Berisa explained that there has been a reasonable level of demand in general over these first few weeks of 2023, albeit at a slower pace than previous years at this time. Coverage has been specifically to replenish stocks.
- Kai Jantzen of Hamburg trader Jantzen & Deeke recalled that international pepper prices have declined around 40% over the last 14-15 months. “Now there is kind of a standstill. We expect Vietnam to be back by February and that is when the new crop comes in – from February and March,” he said. Jantzen added there could be selling pressure and a further fall in prices from this point. “It all depends: if suddenly a lot of demand will come in this will also convert into a stronger market, but from the fundamentals we see that enough pepper is available. So for the year, I would guess we do not have much upward risk in pepper,” he said. In addition, freight rates have declined significantly. However, there is still a lot of coverage required from destination markets.
Increased prices on Brazilian pepper
- Prices of Brazilian pepper have edged up with the B1 grade now averaging around $3,000-3,100 per tonne fob versus $2,500-2,600/tonne fob a few weeks ago. An addition of around $225/tonne gives the price on a c&f basis. The price gain of around 20% is despite the fact that Brazilian pepper production is viewed as large, the latest crop being estimated at 100,000-110,000 tonnes. However, Brazil had weather issues in December, particularly in its Espirito Santo region, which was hit by very heavy rainfall and flooding. Some of the larger pepper plantations in this regions have been adversely affected. Some areas are reporting 5% damage, others 10%. Either way, this is a cause for concern and likely to impact the quantities available.
Hampered trade flows from Brazil
“There are also farmers, collectors and exporters that do not want to release pepper which they have on the price levels that we saw before. Also, in their opinion the prices have dropped too heavily, too quickly in a short period of time, mainly caused by the fact that the majority of exporters from Brazil were not able or allowed to export black pepper to Europe because of the whole salmonella issue and the extra measures that were taken whereby they have to undergo an HACCP auditing by the local government in Brazil, called MAPA,” Berisa added. Brazilian pepper exporters can export to Europe only when they have been granted the relevant export licence. Out of the 35-40 pepper exporters in Brazil, so far only five have passed the test to be able to export to Europe. Those that have not been granted the export licence to ship to Europe have had to find alternative markets and they are selling their pepper to the Middle East and North Africa – Morocco, Tunisia, Algeria, Lebanon, Egypt, Dubai. Because there were so many Brazilian pepper exporters sitting on stocks the supply was quite substantial at the beginning of the 2022-23 season, so around the summer months of last year. Brazil’s Para area harvests its pepper in July and August, accounting for about 30% of the total volume produced in the country. Espirito Santo follows in November, making up the balance of 70%. These sales made the Middle East and North Africa have exerted quite a lot of pressure on the market in a short space of time.
List of defaulters
“The prices of Brazil black pepper dropped from around $4,000 to about $2,500 in just a couple of months time,” Berisa recalled. “Those sales and the pending shipments that went towards those areas were all of a sudden not honoured by the respective buyers because they were not willing to take a loss on their purchases. There were quite a lot of defaults from those areas. Eventually in Brazil they also circulated a default list of 30 buyers in the Middle East and North Africa. Various exporters in Brazil suffered a huge loss because the containers that were on the way were not taken by the buyers and also not paid so they also had to try and take the cargo back or to ship it to some other destination which is hardly possible.”
- The key reason for this latter difficulty is that local customs officials in these alternative destinations typically after 30-45 days confiscate the cargo and sell it to the highest bidder. Berisa estimated that some exporters have made losses of thousands and possibly even millions of dollars on this. “Of course that had a huge impact on the entire scenario,” he added.
- Vietnam pepper prices did not decline any further and remain stable because farmers and exporters in the country do not want to sell below a certain price. Due to the high rate of inflation they prefer to hold on to pepper stocks than have cash in the bank. Vietnam’s 2023 pepper crop is expected to reach around 200,000 tonnes. Harvesting starts next month and will continue to April.
According to trade estimates, Vietnam exported around 180,000 tonnes of pepper in 2022.
- India is harvesting its pepper crop but exports from this origin are negligible as most is consumed locally. Berisa summed up the world pepper market as “steady with a firm undertone, especially from Brazil”. He viewed annual demand as still tracking an average 2% growth rate. In addition, now that chilli prices have moved higher, global pepper demand might rise further this year as there is some shifting between the two spices based on the relative prices.
Keeping up with consumption
- Jantzen observed that production is easily keeping pace with any such gain in consumption and it is uncertain how overall consumption will pan out this year, particularly in view of the massive inflation and hike in interest rates. He suggested it is possible that consumers will cut back on pepper purchases as part of the whole process of reducing spending. One of the most likely outcomes is consumers less frequently eating out in restaurants etc. Moreover, it will be more difficult for global pepper buyers to build a speculative position because they have to calculate interest rates. Jantzen explained that this means the origin prices will more directly impact prices in destination markets because there is no buffer. In addition, he predicted that prices are likely to be relatively flat or possibly easing slightly, meaning there is more downside potential than upside, although he expected the extent of this to be no more than 10%.
Jan 25 - Daily Cocoa Futures Market Report
- A glance at the chart of the London futures market suggests that the (short-term) excursion into lower territory has now come to an end. In the morning, as well as in the afternoon, slight pressure came into the market. Otherwise, the May 23, with a high of GBP 1995, traded back towards the GBP 2000 resistance. Closing May 23 GBP -4 at GBP 1970. The March / May 23 spread also traded weak yesterday, finding support again - for the third day in a row - at GBP +17 and ending the day at GBP +18. So there seems to be increased interest at these levels, suggesting that the last fundamental shorts are now slowly closing their position.
- From the origin, Nigeria reported a drop in exports of over 70% in December. However, this extreme is put into perspective by the fact that the same report last year announced a 190% gain due to the unwinding of pent-up exports at the time.
Jan 24 - Daily Cocoa Futures Market Report
- Following on from Friday late upward momentum, Monday's trade continued on the same path. Closing price for the day in London vs. the 2nd position GBP 1980, a plus of GBP 29 (1.49%). Same picture in NY with trade closing at USD 2633, up USD 39 (+1.50%) vs. 2nd position. London cocoa saw a further flattening of the H23/K23 front-month structure, from GBP +27 to +23.
- The latest arrivals data from Côte d'Ivoire shows that 64,000 mt arrived at ports in the week ending 22 January. Total arrivals for the 22/23 crop season thus stand at 1,480,000 mt, up 7.6% vs previous year. Thereby being the third consecutive week that arrivals have been below last year's figure.
- A likely result of the recent appreciation of the Ghanaian Cedi, which will have led to a decline of cross boarder cocoa smuggle.
- Looking at the weather: while light rains in southern Nigeria and the Ivory Coast indicate a normal seasonal pattern for the Harmattan, this also means that only little or no rain is arriving in the main growing areas. Positive for the avoidance of Black Pod and the drying of the main crop. However negative for the development of the midcrop pods for which water is increasingly needed.
Jan 23 - Daily Cocoa Futures Market Report
- With the release of more negative data by the Q4 2022 NCA Grindings, down -8.13% against expected -5%, there was only one way for cocoa to trade at first: downwards. On this, London cocoa broke below its 50-day MA line to trade at a daily low of GBP 1928 before speculators and partly industrial positions picked up the lows to reverse the entire day's losses. Closing price in London 2nd position GBP 1951, GBP -2. During the day there was a further flattening of the front-month structure H23/K23 currently at +27, K23/N23 +22.
- The latest Commitment of Trader figures as of 17.01 shows an increase in total net positions for Ldn of 14,291lots to 129,639lots. An increase which, in contrast to previous weeks, is not the result of specs/funds purchases but of a withdrawal from short positions by swap dealers: Swap Dealers stating a Net Change from 7,828lots to 23,776 lots between the 10th to 17th of January. NY Commitment of Traders showing a slight increase of 856 lots. To 40,025 net long over the same time period.
Jan 20 - Asia Coffee-Trading dull ahead of Lunar New Year in Vietnam; price unchanged in Indonesia (Reuters)
- Vietnam coffee prices edged up slightly amid sluggish trade ahead of the week-long Lunar New Year holiday, while prices remained steady in Indonesia on thin supplies, traders said on Thursday. Farmers in the Central Highlands, Vietnam's largest coffee-growing area, sold beans COFVN-DAK at 38,900 dong to 41,100 dong($1.66-$1.75) per kilogramme, slightly up from last week's range of 38,400 dong to 40,100 dong/kg.
March robusta futures on ICE settled up $7, at $1,902 per tonne as of Wednesday’s close.
“Market is dull as farmers have already entered the holiday mood. They have cashed in enough for the past week,” said a trader based in the coffee belt.
“If the prices post-holiday are not attractive enough, bean supplies will be tight as farmers are no longer under pressure to sell.”
- Traders in Vietnam offered 5% black and broken-grade 2 robusta at a discount of $90 per tonne to the May contract.
- Indonesia’ Sumatra robusta coffee bean prices were unchanged from last week, staying at a $130 premium to the March contract, a trader said. Another trader quoted $180 to $190 premium to the February contract, unchanged from a week ago.
Both traders said market activities were still quiet as coffee supplies were still thin. ($1 = 23,445 dong)
Jan 18 - Daily Cocoa Futures Market Report
- On its first trading day after the long weekend, New York failed to make any significant moves. Although the weaker USD brought good support, and gains of US$ 30 were in the book in the meantime, NY closed 4 points down at US$ 2659 May 23; range of just under US$ 50. London was relatively uninspired on the sidelines, and although it tested resistance at GBP 2020 to some extent, it was unable to set any sustainable signs and came under pressure again in the afternoon when GBP gained slightly.
- Thus, the cocoa market is helplessly waiting for input that could help break out of the current sideways movement and clear the 1950/2020 range. There is hope for help from the outside in the form of this week's grinding figures.
- However, Germany is unlikely to be able to do anything here: around 99.5k mt were processed there in Q4 2022, 0.6% less than in Q4 2021. So the focus is on ECA, whose figures are due tomorrow.
Jan 17 - Turkish hazelnut market urged to develop a fair and sustainable system for all involved (IHSmarkit)
- Prices have been fluctuating in a narrow range
- Exports are being hampered by high prices
- Turkish hazelnut prices were fluctuating in a narrow price band from the beginning of September to the second week of November, trader Murat Aysan recalled in a report posted on LinkedIn this week. Aysan observed that during this period, while some of the market players were talking about a surplus or bumper crop in Turkey and the economic crisis in Europe, the Turkish Grain Board (TMO) and the biggest hazelnut buyer bought approximately half of the estimated crop.
- According to officials the TMO bought 150,000 tonnes and it is rumoured that the biggest buyer bought around 250,000-300,000 tonnes of hazelnut.
“When the coming goods from farmers slowed the ugly truth came up. There was a little amount of hazelnut on the farmers’ hands and most of the stock had been collected by the TMO, the biggest buyer and stockers. To make matters worse, the inflation effect came into play. As a result of all of these, hazelnut prices reached all-time high level despite weak foreign demand,” Aysan explained.
- December export figures were announced by the Black Sea Hazelnut Association last Thursday. These revealed that Turkey is still struggling on hazelnut exports. It exported 130,606 tonnes of hazelnuts from the beginning of September to the end of December, 17.5% down from the first four months of the 2021-22 season when it shipped 158,465 tonnes. Export revenue for the 2022-23 period was around $742,010 versus $981,190 in the same period of 2021-22 – a decline of 24.37%. Aysan said this was due to the ongoing economic problems in Europe and to Turkey’s less competitive prices than its alternatives.
- He recalled that last season, particularly in November and December, the Turkish lira had lost its value by 90.71% against the US dollar and euro. “During that time the volatility was so high that the exporters were updating their prices at least two times in a day. In conclusion, the FX (foreign exchange) risks had been passed on to the exporters by the buyers who could have managed to reach an agreement with the sellers,” Aysan noted. However, this year the situation is different, he added. “While the prices are soaring the exchange rates are in range-bound market conditions. Consequently, export prices are soaring as well. When we put together these reasons it is clear that potential buyers prefer Georgian and Azerbaijan hazelnut instead of Turkey’s,” Aysan claimed.
- He suggested that the solution should be to develop a sustainable and fair system for farmers, traders, exporters and even importers and this must be a medium and long-term intention instead of collecting surplus from the market and keeping prices high artificially.
“In addition, it seems to me putting pressure on exchange rates is unsustainable and it is hammering Turkey’s competitive power surely for not only the hazelnut sector but also other sectors. The Turkish lira must be weakened by at least the level of the inflation rate,” Aysan concluded.
Jan 17 - Fall in Vietnamese cashew exports and imports (IHSmarkit)
- 10.3% fall in exports
- 35% fall in imports of raw cashew nuts (RCN)
- Cambodia and Ivory Coast were the main suppliers of RCN
- Vietnamese cashew processors are close to closing factories due to the Tet (Lunar) festival, pushing up the shipment pace to fulfil the January contracts and analysing bonus and gifts for workers, an essential key point to secure a robust domestic consumption during the holiday. Vietnam’s cashew exports closed 2022 with 519,780 tonnes, worth $3.08 billion, 10.3% less year-on-year in volume and 15.1% less in value. Imports of raw cashew nuts (RCN) reached 1.9 million tonnes valued at $2.7 billion, 35% less y/y in volume and 37% down in value. The main suppliers were Cambodia and Ivory Coast, accounting for 37% and 25%, respectively, of the volume.
- Ho Chi Minh City-based supplier Golden Bridge observed that WW240 and WW320 attracted quite good levels of demand, listing the following prices:
WW240, $2.75/lb
WW320, $2.55/lb
Large pieces (LP): $1.70/lb
Small pieces (SP): $1.10/lb
- Analysis
Vietnam’s industry is reaching its goals of cutting production, exports and imports although not achieving higher prices. However, prices might increase if Vietnam and Cambodia confirm low crops.
Jan 17 - Daily Cocoa Futures Market Report
- With the absence of the big brother in New York (Martin Luther King Day), the London cocoa market unfolded little dynamic. If one may speak of dynamic at all: miserable, not even 11k lots changed hands, the range in the front month of March 23 (GBP 24) and in the 2nd month of May 23 (GBP 17) fit into the picture here. Mainly the weaker USD was probably responsible for the market coming under pressure in the afternoon and shortly above the daily low put an end to the suffering. Closing May23 11 points down exactly on the psychological GBP 2000, resistance for some, support for others.
- Well, it may be that yesterday's reported renewed expansion of the speculative gross long position to an unprecedented 95k lots in London made its contribution. Origin-related hedge pressure does not seem to be responsible in any case. Today, New York is back at it today, and a reaction to the above factors may be expected. As reported, the longs and shorts in New York had each increased their position by 6.5k lots as of Tuesday. Let's see where the journey goes.
Jan 17 - Dry weather and heat could affect Ivory Coast cocoa quality, farmers say
Sparse rainfall and high temperatures observed in some of Ivory Coast's cocoa-growing regions last week could damage beans and flowers and reduce the upcoming April-to-September mid-crop, farmers said on Monday. The world's top cocoa producer is in its dry season, which runs officially from mid-November to March, when rains are poor and scarce.
Jan 16 - Daily Cocoa Futures Market Report
- It may be a little premature, but on Friday the London cocoa market confirmed the basic trend of a sideways movement with slightly higher highs since the beginning of the year, leaving aside the 2 days of an attempted correction. May 23 hit a new high at GBP 2021, then consolidated in the afternoon and ended the day at GBP +11 at GBP 2011. Technically, the ongoing 2nd month still has room to run to the next resistance at GBP 2059.
- The Commitment of Traders figures as of 10.01. confirmed the current trend. The large specs/funds in London increased their gross long position by 5,626 lots to an impressive 92,978 lots.
- In NY there seems to be no clear picture, there the longs increased their position by 6,488 lots and the shorts increased their position by 6,544 lots. London seems to be clearly long, we continue to recommend a look at the New York speculators, who could set the next direction.
- Malaysia opened the round of Q4 2022 grinding figures on Friday, with a staggering 7.7% decline already rumoured to be weak in general. We expect the ECA numbers to be rather unchanged.
Jan 13 - Daily Cocoa Futures Market Report
- Yesterday, May 23 again tested the upper end of the current range. The current resistance just below GBP 2020, however, continued to hold. The specs / funds then lost buying interest in the afternoon and hedging pressure from the origin, for the front dates, finally led to a marginal correction. The May 23 ended the day unchanged at GBP 2000 and, if patterns are to be believed, should then test the lower side of the range again today at GBP 1970. Fridays, however, always have a surprise up their sleeve.
- In line with the London market, the US cocoa market traded listlessly and rather narrowly. The US CPI data released in the afternoon, which was exactly in line with expectations of 6.5%, dashed hopes of some volatility in afternoon trading. Closing price NY USD 2655, +10.
Jan 12 - Daily Cocoa Futures Market Report
- Since just before Christmas last year, the GBP 2000 level has accompanied us as support / resistance, depending on the mood of the market. Yesterday it was, once again, the latter. May 23 reached highs of GBP 2003 and ended the day, just below, at the aforementioned GBP 2000 / GBP + 22 in May 23. The only noteworthy trade was a large EFS (Exchange for Swaps) trade in March 23 of 15,000 lots. Gross 35,983 lots were traded yesterday. If we take the net volume and exclude AAs / spreads / options etc., the volume was a meagre 267 lots!
- So another day without any significant activity, neither from the origin nor from the industry. In the last COT reporting period, open interest increased by almost 10K lots in LDN and 17k lots in NY.
Jan 11 - Daily Cocoa Futures Market Report
- In almost typical cocoa fashion, Monday's strong start to the week was followed by a weak trading day yesterday. London clearly less dramatic than its big brother in NY. The NY market gave up its significant gains from the previous day ($+82) and ended up with a close of $2615 ($-79)/ May 23, despite the impressive ranges an inside day which once again confirmed the New York uptrend. London joined the weak performance and May 23 ended the day at GBP -31 at GBP 1978.
- The industry continues to be on the sidelines, as it has been for the past weeks / months, waiting for low levels. With average price coverage (futures only) below 6 months, the air is starting to thin.
- The origin shows only restraint with further selling in the market. Who will be the first to twitch, the origin or the industry....and then there are the speculators who continue to dominate the market in the meantime.
Jan 10 - Daily Cocoa Futures Market Report
- While the May23 futures managed to trade above the GBP 2000 level for the first time last Friday, but ultimately lacked the buying interest to close above it, it was to do so on Monday. After Ldn opened slightly lower, it was increased speculative buying in NY that also gave Ldn the impetus to regain the 2000 level and close above. In the end, the closing price was GBP 2009 / +16. A plus of 0.80%.
- The daily gain was clearly in NY. Closing price NY K23 USD 2694 / +82 (+3.1%).
- In Ldn, the March / May 23 spread strengthened slightly on the day, ending the day at GBP 58/56.
- Weekly arrivals in Ivory Coast totalled 87k mt to reach a total of 1.346 million tonnes for the season, up 11.6% vs. previous season. This included some 44k mt of beans arriving at the port of Abidjan and 43k mt at San Pedro. In parallel, Ghana announced its first purchase figures for the season: 350,000 MT purchases up to 15 December, a strong increase compared to last year when the figures stood at a mere 199,000 MT.
Jan 09 - Daily Cocoa Futures Market Report
- Although May 23 reached a new contract high of GBP 2015, the air was quickly blown out last Friday. Hedging pressure from the origin, mainly for the current crop, led to the corresponding correction or rather into the corresponding consolidation mode, and the May 23 slumped to GBP 1990. At the end, a closing price of GBP 1993 / -18 was recorded. The March / May 23 spread continued to be under pressure and ended the week at GBP 55/53. The long-term structure (March 23 / March 24) gave up just under GBP 30 since the beginning of the year, but is still strongly inverse with a premium of GBP +172. This, coupled with very low industry price coverage (just under 6 months), should provide further support.
- Commitment of Traders as of 03.01.23 show a reduction in net long position from 7530 to lots to now 144,942 lots net long. Remarkably, despite the net reduction, the gross long position of the managed money players increased by just over 4K lots in London.
Jan 06 - Daily Cocoa Futures Market Report
- After several unsuccessful tests of the resistance at the 2000 level in the past trading days, the breakout to the upside succeeded yesterday afternoon in the 2nd month May23. After a prolonged indecision, where trade buying and origin-related selling pressure kept each other in check, the volume picked up significantly in the afternoon. Focus was particularly on the nearby Mar/May23 spread, which hosts much of the speculative position and came under slight pressure (GBP 59). The GBP provided assistance and brought further support as it weakened against the USD and EUR in the afternoon. On balance, the May23 marked the upper end of the GBP 37 range with a new contract high of GBP 2014 and closed a good bit above the GBP 2000 at GBP 2011 (+27). Technically, there is room to the north, although profit-taking is likely and the markets remain overbought.
Jan 05 - Daily Cocoa Futures Market Report
- With exactly half of the previous day's range, yesterday was a typical inside day on the London cocoa market, with dwindling volume. The only noteworthy development was the March / May 23 spread, which weakened further (GBP +63/61), correcting by GBP 20 in 4 trading days. The arbitrage widened yesterday to a discount LDN of GBP 110 / March 23 due to yesterday's firmer NY event (May 23 $ +31 / 2607). The arbitrage for the next crop 23/24 is more divergent, with discounts LDN around GBP 220. Closing price May 23 LDN GBP +5 at GBP 1984.
- In 2 weeks the Q4 2022 grinding figures will be published. Asia starts on 18.1., ECA & NCA follow on 19.1.
Jan 04 - Daily Cocoa Futures Market Report
- With a GBP 42 range in May 23 LDN, the year started as volatile as it ended. While the market made a steady effort to consolidate in the first half of the day, the large position shift of speculative longs (especially in NY) weighed heavily on the London market as well. The May 23 corrected, at least temporarily, to a low of GBP 1955, recovered in the afternoon and ended the day at GBP -9 at GBP 1979. The March / May 23 spread also came under pressure and converged to GBP +64, on the low. A new 3 week low. Despite all this, the structure remains clearly inverted, even at the beginning of the year, and should continue to encourage the "longs" to hold the position.
- Arrivals in Côte d'Ivoire are at 1.259 mt as of 01.01.23, up 13.7% year-on-year.
Jan 03 - Indonesia to import 3.6 mln T raw sugar, 991,000 T white sugar
Indonesia plans to import 3.6 million tonnes of raw sugar for industrial use and about 991,000 tonnes of white sugar for consumers, its trade minister said on Monday. Zulkifli Hasan did not provide a time frame for the imports.
Jan 03 - No rain in Ivory Coast's cocoa regions, Harmattan increases - farmers
No rain fell last week in most of Ivory Coast's cocoa regions and a strong seasonal dry wind in central regions raised fears over the quality and the size of the April-to-September mid-crop, farmers said on Monday. Ivory Coast, the world's top cocoa producer, is in its dry season, which runs from around mid-November to March, when rains are poor and scarce.
Jan 03 - Daily Cocoa Futures Market Report
- With a gain of just under 1%, the cocoa market in London, like its big brother in New York, said goodbye to 2022 and emphasized its claim to the 2000 mark base May 23 with a high of GBP 1990. The second month closed just below at GBP 1988, thus 18 points up. The full year gain in 2022 thus reaches around 15%.
- Some of this should be related to the GBP's loss against the USD, if not the main driver of London's performance in 2022 - the UK currency lost around 10% against the USD in 2022.
- The main activity on Friday was attracted by the front Mar23 with 14k lots traded out of a rather meager 21k lots. The structure remained unchanged - inverse - and should therefore continue to provide fertile ground for speculative longs.