Softs News

Aug 03 - Daily Cocoa Futures Market Report

After Friday's downward movement, built-up hedging pressure from the origin caused an initially weak course of the day. After the official opening in New York, there was also a little pressure on the market at times, here a good part of the approx. 6000 lots of fresh longs from the last Commitments of Traders Report were certainly liquidated again. The Dec 21 LDN tested its 10-day average (GBP 1661) with a low of GBP 1658, but ended the day almost unchanged at GBP -4 at GBP 1671. The Dec 21 / Mar 22 widened a little after a trip into positive territory and traded at GBP -7 / close GBP -4. Arrivals in the Ivory Coast as of 02.08 are at 2.109 vs. 2.030 mt from 19/20 (+3.39%).

Aug 02 - Daily Cocoa Futures Market Report

Technically, the correction seen on Friday was long overdue. The Dec 21 lost GBP 28 at the peak, traded to a low of GBP 1670 and ended the day GBP -23 at GBP 1675. The origin was much more active compared to the last few days, towards GBP 1700, in the market and in the absence of the industry there was little significant resistance. Commitment of Traders as of 27.07 show a reduction of the net short position by 5,370 lots to 6,263 lots net short. Managed money was surprisingly "inactive, the change in the reporting period was just under GBP +80 / $ 135. Only in New York did the short position decrease by 1,389 lots, London added 1,194 lots of fresh shorts.

Aug 02 - Frosts stain Brazil coffee belt, growers see nearly a third of fields hit

Brownish spots have stained large areas of coffee fields in the south of Brazil's top producer Minas Gerais, a sign that the worst cold snap in nearly 30 years will hurt production for at least the next two crops, according to an agronomist. Adriano de Rezende, technical coordinator at the Minasul coffee cooperative, estimated that between 20% and 30% of the crops were hit by the unusually cold temperatures that reached the region on July 20, spurring the worst frost since 1994, according to farmers and analysts.     

Jul 30 - Market Briefing: Coffee (IHSmarkit)

- India's coffee output is estimated to rise to an all-time high of 369,000 tonnes
- Vietnamese coffee exports in June reached 128,036 tonnes
- US green coffee stocks in June dropped by 35,678 60-kg bags

Production

- India's coffee output is estimated to rise to an all-time high of 369,000 tonnes (6.15 million 60-kg bags) in 2021/22, up 10.5% from a downwardly revised 334,000 tonnes (5.567 million bags) in 2020/21. Arabica production is projected to rise to 108,300 tonnes (1.805 million bags) from 99,000 tonnes (1.650 million bags), while robusta output is seen increasing to 260,700 tonnes (4.345 million bags) from 235,000 tonnes (3.917 million bags).
- Brazil’s 2021/22 robusta harvest has virtually been concluded in Rondônia, while progress in Espírito Santo stood at 70-80%. Progress was slowed by a high share of green beans and a lack of work force. Harvest progress with arabica stood at 50-60% in Zona da Mata, 40-50% in Garça and in Cerrado Mineiro and 30-40% in northwest Parana.

Demand

- US green coffee stocks in port warehouses dropped by 35,678 60-kg bags during June 2021 to reach 5,779,461 bags at the end of the month. Stocks were down 18.2% from the year-ago level of 7,061,198 bags. Stocks had increased for two consecutive months since hitting a six-year low of 5.679 million bags late in March but are now headed back to multi-year lows. Stocks remain well above 2011’s historical low of around 4 million bags.
- Japanese green coffee stocks held in ports amounted to 2.863 million 60-kg bags at the end of May 2021, up from 2.808 million at the end of the previous month but 38,967 bags below the count at the same time last year.
Trade.
- Vietnamese coffee exports in June amounted to 128,036 tonnes compared with 130,285 tonnes in May and 127,700 in June 2020. This brought total exports to around 1.157 million tonnes down from 1.302 million tonnes in the same period a year ago.
- Ugandan coffee exports totaled 618,388 60-kg bags in June, up from 420,563 bags one year earlier and the highest ever in a single month since 1991. This brought total coffee exports to 4,509,437 bags, up from 3,791,089 a year ago.
- Brazilian green coffee exports in June rose 0.3% over the same month a year ago to around 2.730 million 60 kg bags, with limited shipping capacity still a problem. So far in the current cycle, a total of 8.933 million bags was exported, up 5.2% on 2019/20.
- Members of the ICO exported 9.786 million 60-kg bags of coffee in May 2021, down 10.1% from 10.901 million in the same month last year.

Price

Arabica coffee futures rose sharply to their highest level in more than 6½-years this week on ongoing support from concern that strong frosts in Brazil last week may have done extensive damage to trees in the main coffee belt. The benchmark September contract settled up 18.80 cents at 207.80 cents per pound (July 26), after peaking at 215.20 cents, the highest since October 2014. The session low was 199.00 cents. Equally, coffee prices in Brazil have risen from BRL400 ($77.30) per 60-kg bag in December to around BRL800 this month, but there are estimates for further increases ahead to around BRL1,000. A new polar air mass is forecast to move over the same areas later this week, which will be the third strong cold front to hit crops this year.

Jul 30 - Market Briefing: Cocoa (IHSmarkit)

- European grinding at 10-year high, +13.6% y/y in Q2
- Brazilian cocoa exports down 3% y/y to 4,775 tonnes in June
- New York cocoa hits eight-month low

Production

- Colombia’s cocoa output in Q1 (January-March) totaled 20,836 tonnes, a 47% y/y increase and the highest figure in the history of the country’s production. This was not only above last year’s volumes, which had only reached 14,174 tonnes by Q1, but is also higher than the estimated 14,550 tonnes.
- Brazil’s total cocoa arrivals decreased in the week ending July 18, to 105,635 60-kilo bags (6,338 tonnes), -10% w/w. This was owed to Bahian volumes dipping to 63,883 60-kilo bags (3,833 tonnes), a weekly drop of 22%, and -4% y/y.

Demand

- European cocoa processing for Q2 2021 rose to their highest level in at least 10-years and could potentially be its all-time peak for the quarter. Grindings increased by 13.6 % y/y to 356,854 tonnes.
- North American cocoa grindings saw an 11.68% y/y rise in Q2 2021, to 123,719 tonnes. Volumes were also higher quarter-on-quarter (Q1 117,956 tonnes) and the highest quarterly volumes since Q3 2019 (123,208 tonnes).
- Asian Q2 cocoa processing hit over a 10-year high, increasing by 9% y/y, reaching 220,865 tonnes. Quarter-on-quarter, grindings also increased by 3.2%, as well as being above expectations of +4%.
- Swiss chocolatier, Barry Callebaut, saw its nine-month fiscal year sales volumes accelerate (+3.4%) with chocolate (+21.2%) in particular reporting a strong performance. US confectionery giant Hershey, saw another quarterly sales increase (Q2, 16.5%+) and boosted its 2021 earnings outlook further (+6-8%), on robust recovery in away-from-home consumption and international markets, as well as sustained elevated at-home consumption. Mondelez also raised its sales forecast (+4%) on a boost in emerging markets. Lindt reported double-digit sales growth (+17.4% y/y) on a recovery in the chocolate market.

Trade

- Brazil’s total cocoa exports were down 3% y/y to 4,775 tonnes in June, but up 9% y/y in value at USD16 million, due to Bahian exports rising in both volume and revenue. The state of Bahia’s exports were 3% higher y/y in volume and saw a 15% y/y hike in value, to 4,751 tonnes and USD16 million, respectively. From February to June, Brazilian exports tallied 49,229 tonnes according to data from Ilhéus port, but it was lower at 38,005 tonnes. Brazilian industries have already reported that 43,212 tonnes will be released in the next weeks.
- Ghana shipped 465,136 tonnes of cocoa beans globally in 2020, with over half, 255,778 tonnes, heading to the EU (minus the UK). Total exports of cocoa bean and cocoa preparations, from Ghana to the EU, reached 341,516 tonnes.

Price

- Cocoa prices are still being weighed by abundant supplies and beneficial crop weather with the New York futures contract hitting several eight-month lows during the month. September New York cocoa first slipped to USD2,288/tonne on July 6, then hit USD2,296 in the following session and USD2,296 the day after that, extending the sell-off that began in mid-May.
- Meanwhile, cocoa butter prices in July fell moderately by 2.2 cents to 261 cents per pound from last month’s average of 263 cents per pound. Powder prices remained stable at 95 cents per pound and the combined cocoa powder and butter ratio rose by 0.07 to 3.37 in July, up slightly from 3.29 last month. The grind margin declined marginally to 29.8.

Jul 30 - Market Briefing: Spices and Exotics (IHSmarkit)

- Decline in Ethiopian sesame seed production
- Vanilla demand is recovering
- Mexico boosts honey exports

Production

- Papua New Guinea’s vanilla bean crop might exceed 300 tonnes in 2021.
- Uganda’s vanilla bean output is expected to exceed 100 tonnes in 2021 thanks to government support after suffering several years with record-low prices. Comoros’ production is expected to range from 35-50 tonnes.
- The 2020-21 (October-September) Ethiopian sesame seed crop is expected to fall by 9% year-on-year to 255,000 tonnes due to a cut in acreage, according to the USDA, as many farmers are switching to other products such as sorghum due to rising demand in food crops after the Covid-19 pandemic restrictions hit grocery supply chains.
- The 2021 Mexican honey crop might rise by 22.4% year-on-year to 66,270 tonnes, according to the Mexican ministry of agriculture.

Demand

- Demand for industrial-grade vanilla is recovering after Covid-19 starts to be controlled, cutting carry-over stocks.
- The demand for Papua New Guinea’s black and gourmet vanilla is growing strongly.
- The Guatemalan cardamom industry has been focused on covering the demand for the Ramadan festival (12 April-12 May). Overall demand was strong in the first five months of this year, as demonstrated by the export figures (see Trade below).
- Mexico’s honey industry is ready to meet high global demand for honey, triggered by the Covid-19 pandemic.

Trade

- Guatemala’s cardamom exports from January-May 2021 reached 21,910 tonnes, worth USD451.8 million, 45.7% more year-on-year in volume and 15% more in value.
- The Middle East markets were the main importers. Saudi Arabia, the UAE and Egypt co-led purchases, accounting for 26%, 21% and 9%, respectively of the total volume.
- Exports started 2021 with record sales of 9,000 tonnes. Exporters sold out the previous crop after closing 2020 with another record: 65,110 tonnes valued at USD1.13 billion, 78% more in volume and 75% more in value.
- Papua New Guinea is facing logistical challenges due to scarcity of sea and air freight services, favouring smuggling of its vanilla beans across the border shared with Indonesia.
- Vietnam’s pepper exports were 154,000 tonnes, worth USD496.8 million, in H1 2021, 7.5% less year-on-year in volume and 40% more in value, thanks to gradual growth in prices since January
- Indian turmeric sales between January-April 2021 reached 50,430 tonnes, worth USD66.5 million, 22% more year-on-year in volume and 16.0 % more in value. The main importers were Bangladesh and the UAE, taking 21% and 11% of the total volume.
- Ethiopian sesame seed exports reached 87,440 tonnes, worth USD131.2 million, 36% less year-on-year in volume and 57% less in value, from January-May 2021 with fob prices stabilising between USD1,490-1,550/tonne despite consumption recovery. The main importers of Ethiopian sesame were the UAE, Israel and Vietnam, accounting for 30%, 25% and 12%, respectively, of the total volume. China, a traditional key purchaser, accounted only for 3%.
- Mexico’s honey exports closed Q1 2020 with 3,330 tonnes, worth USD10.1 million, 28.6% more year-on-year in volume and 63.8% more in value.

Price

- Guatemalan cardamom prices have stabilised at USD16,000 per tonne cif for mixed yellow quality 360 g/l between May-June, after a slight rise between February-April after the Suez canal bottleneck and India’s industry starting to ship its crop.
- Madagascar’s vanilla prices have fallen to USD150 per kilo despite the minimum price of USD250/kg set by government.
- Vietnam’s pepper prices started at USD3,900/tonne cif nw Europe in the first week of July, USD100 more than in June, according to IHS Markit.
- The Indian spot fob turmeric price reached INR7,331 per quintal (USD98.5/quintal) at the Nizamabad market (Telangana state, south central) on 28 July, unchanged from 30 June.

Jul 30 - Market Briefing: Dried Fruit and Nuts (IHSmarkit)

- Californian almond crop downgraded due to severe drought
- Vietnam closed H1 with a sharp rise in cashew exports
- Gradual rise in Chilean walnut prices

Production

- Supply of coconut in the Philippines is tight, so any further interruptions from Covid and typhoons will only hurt production volumes. The country is increasing Covid curfews and was recently hit by monsoon flooding with one of the first typhoons of the season Typhoon In-fa
- Australia’s macadamia 2021 output estimate has been downgraded by 4.5% to 48,500 (in-shell) tonnes at 3.5% moisture (52,000 tonnes at 10% moisture), after heavy rains hit plantations in New South Wales (NSW) between March-April, according to the Australian Macadamia Society (AMS).

The new forecast represents a 3.5% increase on last year’s crop.

- California’s 2021 almond crop is estimated to reach 2.8 billion meat pounds, 10% below last year’s record of 3.1 bln lbs due to severe drought, according to the USDA’s National Agricultural Statistics Service (NASS).
- Spain’s walnut production is expected to reach 33,500 tonnes in 2021, 30% more year-on-year, thanks to favourable weather and a 5% growth in planted area, according to the walnut and pecan unit from the Spanish association of fruit and walnut growers (Fepex).
- Rain hampered peanut crop progress in southern Alabama in the week to July 25. Farmers in southern Alabama needed to apply fungicide to peanut crops but are unable due to consistently wet conditions. Overall, drier conditions are still needed for the peanuts crop to progress. However, the overall pace of the crop is holding up well though with 81% of peanuts at the pegging stage, 65% of crop rated in good condition and 10% of the crop viewed as in excellent shape.
- Chile’s 2021-22 raisin crop is expected to reach 59,000 tonnes (dried basis), 1% less year-on-year after the table grape planted area fell by 489 hectares to 45,000 ha, according to the USDA.

Demand

- Desiccated coconut and other coconut products continue to generate keen buying, adding to already intense pressure on supply.
- Vietnamese cashew kernels are also a popular purchase as shown by H1 and June 2021 export data (see Trade below).
- Chile’s 2021-22 raisin consumption may rise by 1.5% to 3,600 tonnes, accounting for 5% of the total crop.

Trade


- Vietnam’s cashew kernel exports surged 23% in the first half of 2021 to 268,084 tonnes. June 2021 exports were 47.4% ahead of those in the same month a year ago to 62,515 tonnes.
- Turkey’s processors are close to clearing out the 2020-21 dried apricot production after exporting 84,320 tonnes, 9% less year-on-year, and selling 8,000-9,000 tonnes in the domestic market from August-June.
- US seasonal (September-June) pistachio exports rose by 21% y-o-y to 184,710 short tons. Germany and China were the main seasonal importers. China imported 63,270 tons, 17% more y-o-y. Germany reached 30,700 tons, 21% more.
- Chilean walnut exports reached 27,690 in-shell equivalent tonnes in June 2021, 45% more year-on-year, according to the Chilean Walnut Association (Chilenut). Seasonal (21 March-30 June) shipments totalled 62,690 tonnes, 37% more.

Price

- Prices for coconut continue to rise, being above the December 2017 highs, as demand continues to be strong even during the usually quieter European summer months, and production is still behind.
- Shipping prices from the Far East remain at record highs with no sign they will get better this year.
- Trading sources listed the following prices for Chilean walnuts in July:
    In-shells: USD3.25-3.35 per kilo fob for 30-34 mm, 8% more month-on-month; USD3.85-3.95/kg for 34-36 mm, 4% more: and USD4.10-4.20/kg for 36 mm+, 2% more.
    Kernels: USD9.00-9.20/kg for LHP80, 5% more; USD7.90-8.0/kg for LHP40, 7% more; USD6.9-7.0/kg for large pieces, 13% more.

Forward view

- Rainfall average between August-September will condition US almond, walnut, pistachio, raisin and prune crops. In addition, water restrictions may lift production costs, pushing up prices.
- Official purchasing prices set by the Turkish Grain Board (TMO) for hazelnuts from September onwards.
- New Covid-19 waves have occurred in Asia, especially in Philippines and Thailand. New lockdowns and restrictions may hit desiccated coconut and dried tropical supply.
- Sea container availability will lead cashew and tropical dried fruit prices between August-November, when traders launch offers to cover the Christmas campaign in the EU and the US.

Jul 30 - Market Briefing: Sugar (IHSmarkit)

- Brazil's CS crushed 45.6 million tonnes of sugar cane in the first half of July
- China’s sugar imports in June 2021 reached 420,000 tonnes
- India exported 4.7 million tonnes of sugar so far in the 2020/21 season

Production

Sugar mills in Brazil's Centre/South crushed 45.6 million tonnes of sugarcane in the first half of July, down 2.4% from 46.7 million in the same period last year, Unica data showed. This brought total cane processing since the start of the season on 1 April to 256.7 million tonnes, down 7.4% from 277.1 million by the same time last year. There was also a 14% drop of the cane yield to 68.2 tonnes per ha in the first half of July from 79.0 in the same period last year. The cane yield drop during early July was therefore stronger than the 11% previously reported for June and can be attributed to a frost during the night 30 June/1 July which led to the advancement of the harvest of frost-impacted cane fields. Cane that has been hit by frost needs to be processed as soon as possible, implying the harvest of cane that has not yet reached optimum maturity. There was a second frost in Brazilian growing areas on 20 July and Unica pointed out that the effect of this frost event will become visible in the harvest data for the second half of July and during August.

Demand

China's (official) sugar imports in June 2021 reached 420,000 tonnes, up from 180,000 in the previous month but hardly changed from 410,000 tonnes in the same month last year, customs data show. This brought total sugar imports in the first nine months of 2020/21 (October/September) to 4.53 million tonnes, up sharply from 2.23 million imported in the same period last year and the highest total ever imported during the first nine months of the season.

Trade

India exported 4.7 million tonnes of sugar so far in the 2020/21 marketing year. Of the total exports undertaken so far, 1.58 million tonnes went to Indonesia, followed by Afghanistan at 582,776, the UAE at 447,097 and Sri Lanka at 363,972. Its food ministry has also suggested providing a subsidy of INR3,500 per tonne for the season starting October. For the current 2020/21 season, the central government initially announced a subsidy of INR6,000 per tonne for 6 million tonnes, which it reduced to INR4,000 per tonne in May due to firm global prices. The food ministry has suggested a lower subsidy for next season as global raw sugar prices have risen nearly 47% over the past year. Exports during the current season ending 30 September are seen at 7 million tonnes, higher than the subsidized quantity of 6 million.

Price

Sugar futures prices have hit several five-month highs over July, on continuing Brazilian frost. By June 29, Raw sugar futures in New York hit a fresh low of 18.81 cents per pound, but then entered into reverse gear as investors believe that the new frosts which are set to hit sugarcane areas on June 30 and August 1 would likely be less severe than last week's and will bring only little additional damage to the crop that is already stressed from previous dry weather and two frosts in July. The October/October white sugar premium continued to decrease as it reached $47.95 per tonne by June 29, down further from $48.22 in the previous session. The white sugar premium is currently at its lowest level since November 2019.

Jul 30 - Coffee, cane and orange crops at risk as temperatures plunge in Brazil 

Temperatures fell in swathes of Brazil on Thursday - with rare snowfall overnight in some places - as a polar air mass advanced toward the center-south of the global agricultural powerhouse, threatening coffee, sugarcane and orange crops with frosts. Unusually cold weather in Brazil has already sent international prices for coffee and sugar higher and Friday was forecast to be the coldest day of the year, according to Marco Antonio dos Santos, a partner at weather consultancy firm Rural Clima.

Jul 29 - Orange production to rise 5% in 2020/21, according to USDA

- Brazil and Mexico to drive global production
- Decreases expected in the US, Egypt and Turkey
- South Africa and China to see major gains in export volumes
Global orange production in the current season is to rise by an extra 2.5 million tonnes thanks to a favourable crop expected in Brazil and Mexico, leaving the market with more processing material.

- According to the USDA’a latest Citrus report, global orange production is to rise 5.4% to 48.6 million tonnes, driven by a 7% rise in Brazilian and a 60% surge in Mexican production of oranges. Most of the increase is projected to go into fruit for processing, while exports and consumption will remain flat.

- Brazil’s production is forecast to reach 15.9 mln tonnes. Even though orange trees in the country this year are in the on-year of the biennial production cycle, adverse weather affected the production potential for the next season. Consumption has been lowered slightly, while oranges destined for processing are up 13 mln tonnes to 11.2 mln.

- Mexico’s production is expected to rebound to 4 mln tonnes as the country comes back to normal after last year’s drought. Consumption and fruit processing are expected to rise accordingly.

- The second-largest orange producer, China, expects production to be up slightly to 7.5 mln tonnes, with exports to more than double on improved logistics and recovery in demand in key markets such as Malaysia, the Philippines and Vietnam.

- Production volumes in the EU are to rise 5% to 6.5 mln tonnes thanks to favourable weather and an increase in planted area. South African production is expected to increase 2% to 1.7 mln tonnes due to weather conditions, improved water management, a rise in area harvested, and new plantings of high yielding and late maturing varieties. The country’s exports are estimated at a record 1.3 mln tonnes, with the EU projected to remain the top market (accounting for around 45% of shipments).

- On the other hand, production decreases are expected in some of the other main origins, like the US, Egypt, and Turkey.

Production volumes in the US are estimated to dip 12% to 4.2 mln tonnes, as the crop continues being affected by citrus greening, as well as a planted area that is down 40%. Consequently, consumption, exports and fruit for processing will fall as well.

Egyptian volumes are projected to fall 6% to 3.4 mln tonnes as strong winds and high temperatures affected flowering and fruit set. While exports are likely to mirror lower supplies, Egypt is still expected to account for one-third of global orange trade.

Turkey is to see a 24% lower orange production, at 1.3 mln tonnes on hot May weather which affected the bloom.

Jul 29 - Daily Cocoa Futures Market Report

One day's break seems to be enough for the cocoa market at the moment. The Dec 21 broke through GBP 1700 resistance, traded to a high for the day of GBP 1713 and ended the day reasonably firm at GBP +16 at GBP 1702. With the sixth firm close in a row and a rise of over GBP 100, one would suspect that the managed money shorts have begun to shed a good portion of their position after all. The origin was sporadic in the market yesterday and held off a further rise for the time being. The differentials in Côte d'Ivoire are currently said to have strengthened again. We recommend continuing to take a look at the structure. Excluding the Sep / Dec 21 spread, this is more than flat for next year.

Jul 28 - Cold wave in São Paulo could trigger losses in oranges and lime crops (IHSmarkit)

- Frost might cut volumes this year, possible knock-on effect next season
- Tangerine crop in São Paulo in the clear

A cold wave that enveloped the state of São Paulo last week negatively affected orange groves in Brazil’s citrus belt, with reports of frost in some areas. This new scenario increased concerns about lower production volumes in the current season as well as a delayed effect on plant vigor for the following crop. Namely, productive orange trees are close to the period when new flowers are induced, but plants are already stressed from the drought they experienced over the last two years, according to market research organisation Cepea.

Cepea analysts expect the quality of the remaining orange fruit this season will decrease, as some of the fruit that was affected by earlier frosts in late June and early July has already dried and even crystallised.

In terms of a possible delayed effect, analysts expect that the youngest trees that are in the budding phase will be most affected in the 2022/23 season.

- As for ponca tangerines, the cold spell is not expected to impact volumes in São Paulo state, since the harvest is practically finished. Meanwhile, in Minas Gerais, where there are still larger volumes to be harvested, fruit quality might be affected.

- Tahiti lime production is likely to be more imperiled than tangerines, as lime is more sensitive to weather oscillations. Moreover, there are areas of Tahiti lime in different stages of development, including orchards that were in full blossom. Local reports indicate the intense cold already caused a drop of small lime fruits, sprouts and flowers.

Jul 28 - Daily Cocoa Futures Market Report

After the sharp rise of almost GBP 70 / Dec 21 within 3 days, the market allowed itself a short rest yesterday. With a high of GBP 1691, Dec 21 ventured a brief look towards GBP 1700 resistance. Closing Dec GBP +8 at GBP 1686, the structure continued to run together. The Dec 21/ Mar 22 spread traded to a premium of GBP +5. Just a little less than a week ago it seemed to have settled at GBP -22. With most shorts "underwater", managed money and its direction will determine the next move. Current surplus expectations are hovering around +250,000mt, with a marginal deficit of -15,000mt estimated for next season.

Jul 27 - Covid-19 continues to limit coconut supply

- The end of Covid restrictions is a long way off in the Philippines
- Desiccated coconut prices remain high
- Lofty shipping rates look set to stay well into 2022

Supply of coconut in the Philippines is tight, so any further interruptions from Covid and typhoons will only hurt production volumes.

UK trader TM Duche, which represents Philippine desiccated coconut producer Primex, noted that as the UK ends its first week of the end of lockdown measures against Covid-19, other parts of the world, including the Philippines, are increasing curfews.

The Guardian in the UK reported on Friday that Filipino children are to be banned from going out, it observed.

Just 5.5 million Filipinos have now been fully vaccinated, which is just 5% of a population of 109,035,343, so the end of Covid related lockdowns is a long way off for the Philippines.

There has also been monsoon flooding with one of the first typhoons of the season Typhoon In-fa, with thousands of people fleeing from their homes and put up in Covid safe refuges.

Prices for coconut continue to rise, being above the December 2017 highs, as demand continues to be strong even during the usually quieter European summer months, and production is still behind. “There is no opportunity to catch up and rebuild depleted stock levels in EU warehouses,” TM Duche remarked.

Ports worldwide are getting regular outbreaks of Covid-19, adding to delays – although the peak delays of the first half of 2021 appear to be improving slightly.

Shipping prices from the Far East remain at record highs with no sign they will get better this year. In addition, there is limited to zero availability for some routes into the US.

Forecasts are difficult to make and unpredictability is the keyword.
“We believe that prices will peak in Q4, and shipping costs will probably stay at the same rates well into 2022,” TM Duche concluded.

Jul 27 - Coffee prices surge as unusual cold threatens Brazilian production 

Arabica coffee prices rose 10% more on Monday, after jumping nearly 20% last week, to their highest in nearly seven years as unusual cold weather threatens coffee crops in the world's largest producer Brazil. Severe frosts last week damaged a large part of fields in the main Brazilian coffee belt and a new polar air mass is forecast to move over the same areas later this week, which will be the third strong cold front to hit crops this year.

Jul 27 - Daily Cocoa Futures Market Report

Friday's buying interest accelerated at the start of the week yesterday. Certainly also favoured by the Commitments of Traders figures from the weekend and despite a firm British pound, good support was found shortly after the start. The Dec 21 contract traded up to GBP 45 firmer than Friday and already left the technical resistance of the previous days around GBP 1645 behind in the late morning. Closing price in the evening GBP 1678 Dec 21 (GBP +38). Range was GBP 52 with a respectable volume of almost 40k lots. Overall, the spreads in the front months in particular narrowed considerably, which put pressure on the structure - Dec/Mar 22 closed at GBP -5.

Jul 26 - Brazil sees frosts hitting up to 11% of arabica coffee area 

Unusually strong frosts reported over Brazil's agricultural regions last week hit up to 200,000 hectares (495,000 acres) of arabica coffee farms, or 11% of the total arabica coffee area in the world's largest coffee producer. According to preliminary estimates from the government's food supply agency Conab released over the weekend, an area of 150,000 to 200,000 hectares would see damage to trees, ranging from light to severe.

Jul 26 - Daily Cocoa Futures Market Report

With a closing price of GBP +9 at GBP 1640 / Dec 21, the market ended its one-week "excursion" towards GBP 1600 on Friday. The closing price on the previous Friday was almost identical at GBP 1642. In light of the new Commitments of Traders figures and anticipation of a significantly expanded speculative short position, Dec 21 only rallied strongly in the late afternoon to trade at a high of GBP 1652. Commitments of Traders as of 20.07 show a reduction in the combined position from 17,971 lots to now 11,633 lots net short. Managed Money continued to be active on the short side, adding over 18k lots of fresh shorts. These now hold a speculative short position of 54,005 lots!

Jul 23 - Market Briefing: Cocoa (IHSmarkit)

- Ivorian cocoa arrivals reached 2.087 million tonnes by July 18, up 4% y/y
- North American cocoa grindings saw an 11.68% y/y rise in Q2, Asia’s +9% y/y
- New York cocoa futures hit four-month low

Production

- Ivory Coast saw approximately 7,000 tonnes of beans were delivered to Abidjan port and 6,000 tonnes to San Pedro between July 11-18 for a total of 13,000 tonnes, equal to last week’s cocoa arrivals, but down from the 20,000 tonnes during the same week last season. Cumulatively, reached 2.087 million tonnes by July 18, up 4% from 1.993 million tonnes over the same period last season.
- The Ghana Cocoa Board purchased 1,005,070 tonnes of cocoa from farmers in the season of October 1 to July 15, the most in a decade. Ghana still has eight more weeks left of cocoa purchases for the 2020/21 crop year.

Demand

- North American cocoa grindings saw an 11.68% y/y rise in Q2 2021, to 123,719 tonnes. Volumes were also higher quarter-on-quarter (Q1 117,956 tonnes) and the highest quarterly volumes since Q3 2019 (123,208 tonnes).
- Asian Q2 cocoa processing hit over a 10-year high, increasing by 9% y/y, reaching 220,865 tonnes. Quarter on quarter, grindings also increased by 3.2%, as well as being above expectations of +4%.
- Swedish oils and fats giant AAK reported record-high Q2 financial results, with sales volumes reaching 550,000 tonnes, up by 14% y/y. This was driven by its Chocolate & Confectionery Fats segment, with sales volumes at 118,000 tonnes (+28%) in volume. This was backed by strong demand in South Latin America and the US, as well as for cocoa butter.

Trade

- The energy crisis had slowed Ivorian cocoa deliveries and exports, along with a lack of shipping containers due to the pandemic, forcing its cocoa regulator to limit the issuance of documents that clear bean deliveries at ports for shipment. This has supposedly caused a stockpile of more than 80,000 tonnes of beans in farm warehouses and stores, waiting to be shipped to ports. The export of beans and semi-finished cocoa products were down 23% y/y in June.

Price

- New York cocoa futures hit a four-month low this week, with the September contract tumbling by USD81 to USD2,239 on July 19. Cocoa prices have sold off sharply over the past week on concern the spread of the Covid delta variant worldwide will reduce economic activity and demand for commodities, including cocoa.
- Brazil’s domestic cocoa prices, started last week at a range of R$192.00–203.00/15-kilo unit, but after consecutive falls during the week, values plunged to R$180.00–186.00 ($2,346–2,424/tonne) on July 16.

Jul 23 - Market Briefing: Dried Fruit and Nuts (IHSmarkit)

- Marginal growth in Chilean raisin output
- Strong demand for Australian almonds
- Lack of containers hampering Chilean walnut deliveries

Production

- Chile’s 2021-22 raisin crop is expected to reach 59,000 tonnes (dried basis), 1% more year-on-year after the table grape planted area fell by 489 hectares to 45,000 ha, according to the USDA. Most Chilean farmers grow and harvest table grapes and decide in which industry to sell them (juice, fresh or driers) every season based on the prices offered by purchasers.
- Chile’s 2020-21 raisin area fell by 4.9% y-o-y to 45,489 hectares. The 2021-22 planted area might drop to 45,000 ha as many growers switch to more profitable products such as walnuts, citrus, cherries and avocados.
- Chilean walnut exporters have committed 80-85% of the crop and prices are rising, particularly for kernels.
- Thailand’s summer crops of pineapple, papaya and mango are sold out. Thailand has vaccinated only 10% of the population, maintaining still most restrictions and slowing the production timeframe for domestic dehydrators of its tropical fruits, Dutch broker QFN Trading & Agency reported in its latest market update this week.

Demand

- A modest increase is projected in domestic consumption of Chilean raisins and in exports, which continue to account for most of the offtake.
- Like the US, Australia is seeing strong demand for its almonds. This is evident in an increase in shipments in the current season so far (see Trade below).

Trade

- The Chilean walnut market is facing difficulties as container scarcity has led to an additional three-four weeks over traditional transit times between Chile’s ports and importers.
- The USDA forecasts that domestic consumption of Chilean raisins might rise by 1.5% to 3,600 tonnes and exports by 1% to 56,200 tonnes. This means that exports may account for 95% of the total produced volume.
- Australia’s almond shipments reached 11,220 kernel weight equivalence (KWE) tonnes this May, bringing seasonal sales to 18,110 tonnes, 67% more.
- Freight scarcity is still hitting prices and delivery times on Thai tropical dried fruits.

Price

- Thai tropical dried fruit prices are expected to be stable until the October harvests.
- Chilean walnut processor La Invernada listed the following prices in July:
In-shells: USD3.25-3.35 per kilo fob for 30-34 mm, 8% more month-on-month; USD3.85-3.95/kg for 34-36 mm, 4% more: and USD4.10-4.20/kg for 36 mm+, 2% more.
Kernels: USD9.00-9.20/kg for LHP80, 5% more; USD7.90-8.0/kg for LHP40, 7% more; USD6.9-7.0/kg for large pieces, 13% more.

Jul 23 - Market Briefing: Sugar (IHSmarkit)

- China's sugar imports in June 2021 reached 420,000 tonnes
- Mexico produced 3,126 tonnes of sugar in the week to 17 July
- Kenya’s sugar imports rose 9% to 24,735 tonnes in May

Production

Mexico produced 3,126 tonnes of sugar in the week to 17 July, down from 3,734 tonnes in the previous week but above 1,795 tonnes in the same week a year ago, official data show. There is only one out of 49 mills still operational. This brought total sugar production so far in 2020/21 to 5,713,076 tonnes - 434,756 tonnes more than was produced by the same time a year ago. The cane crush has now reached 51.263 million tonnes, up 4.0% from 49.274 million processed by the same time a year ago. The cane yield is 3.3% higher so far this season at 64.94 tonnes per ha, while the sugar extraction rate is up sharply at 11.14% from 10.71%.

Demand

China's (official) sugar imports in June 2021 reached 420,000 tonnes, up from 180,000 in the previous month but hardly changed from 410,000 tonnes in the same month last year, customs data show. This brought total sugar imports in the first nine months of 2020/21 (October/September) to 4.53 million tonnes, up sharply from 2.23 million imported in the same period last year and the highest total ever imported during the first nine months of the season.

Trade

Kenya's sugar imports rose 9% to 24,735 tonnes in May 2021 from 23,138 tonnes as the government covered for a seasonal slump in domestic production, cushioning consumers from a potential rise in prices of the sweetener, the Sugar Directorate said. Imports of refined sugar totalled 8,120 tonnes while mill white/brown sugar imports were 16,615 tonnes, said the directorate in its monthly report.

Price

It was a mixed week for Raw sugar futures in New York, ending with slight losses by Thursday (July 22) in the actively-traded contracts and fractional gains in the deferred deliveries as the market was in consolidation mode. It largely ignored another frost event in Brazil's Centre/South which set the coffee market alight as the affected cane areas had already been harvested so the additional damage was seen minimal. October delivery ended down 5 points at 17.62 cents per pound, in dealings between 17.47 and 17.74 cents. Second-month March shed 1 point to 18.08 cents per pound, while the rest of the board ended between flat and up 4 points. 

Jul 23 - Market Briefing: Coffee (IHSmarkit)

- India's coffee output is estimated to rise to an all-time high of 369,000 tonnes
- US green coffee stocks in port warehouses dropped by 35,678 60-kg bags in June
- Arabica coffee futures hit a 6½-year high on Brazilian frost

Production

India's coffee output is estimated to rise to an all-time high of 369,000 tonnes (6.15 million 60-kg bags) in 2021/22, up 10.5% from a downwardly revised 334,000 tonnes (5.567 million bags) in 2020/21, the Coffee Board of India said in its post-blossom estimate. It projected arabica production to rise to 108,300 tonnes (1.805 million bags) from 99,000 tonnes (1.650 million bags), while robusta output is seen increasing to 260,700 tonnes (4.345 million bags) from 235,000 tonnes (3.917 million bags).

Demand

US green coffee stocks in port warehouses dropped by 35,678 60-kg bags during June 2021 to reach 5,779,461 bags at the end of the month, according to the Green Coffee Association (GCA). Stocks were down 18.2% from the year-ago level of 7,061,198 bags. Stocks had increased for two consecutive months since hitting a six-year low of 5.679 million bags late in March but are now headed back to multi-year lows. Stocks remain well above 2011’s historical low of around 4 million bags. The largest decreases in the last month were reported in the ports of San Francisco and Norfolk.

Trade

Frost that struck the coffee belt this week has sparked fears of farmers defaulting on deliveries of recently-harvested coffee that was sold to commodities traders months ago at prices that now are half the current values. An unusual cold snap, with temperatures dropping to freezing levels in a matter of minutes on the morning of July 20, delivered a blow to the heart of the coffee belt, damaging trees and harming prospects for the 2022/23 crop. Estimates on Thursday (July 22) varied on possible losses to next year's crop as the market digests the damage. Initial forecasts of a loss of 1-2 million bags quickly increased. Exporter Guaxupe said it expects a cut of 4.5 million bags on initial projections of nearly 70 million for 2022/23 production.

Price

Arabica coffee futures gained 10% on Thursday’s close (July 22) to hit a 6½-year high amid mounting concern about the damage to next year’s crop in Brazil from this week’s frost. Benchmark September arabica contract settled up 17.65 cents at 193.65 cents per pound, having hit its highest since November 2014 at 195.50 cents earlier in the session. The intraday low was 180.00 cents. It has gained nearly 20% this week. December was up 17.70 cents at 196.60 cents per pound and the rest of the board gained 15.20-17.50 cents.

Jul 23 - Market Briefing: Spices and Exotics (IHSmarkit)

- Guatemala records 45.7% boost in cardamom exports in first five months of the year
- Brazilian organic honey prices gain 4.3% between May and July
- Steady demand for Peruvian chilli

Production

The Argentine honey harvest finished this March and a crop of around 71,000-72,000 tonnes is expected, similar to last season.

Demand

- A similar pattern applies to Argentine honey. Brazil, meanwhile, has achieved a sharp boost in its honey exports, which further highlights continued keen consumer buying of honey this year.
- Peruvian chilli is attracting a consistent level of demand, as evident in H1 2021 export volumes.

Trade

- Vietnam’s H1 2021 pepper exports were 154,000 tonnes, worth USD496.8 million, 7.5% less year-on-year in volume and 40% more in value, thanks to gradual growth in prices since January. The US and the UAE were the main importers, accounting for 21% and 7%, respectively, of the total volume.
- Guatemala’s cardamom exports from January-May 2021 reached 21,910 tonnes, worth USD451.8 million, 45.7% more year-on-year in volume and 15% more in value.
- Argentina’s international honey sales between January and May 2021 fell by 11% year-on-year in volume to 29,220 tonnes but increased by 29% in value to USD96.8 million.
- Brazilian honey exports over the first five months of this year rose by 64% year-on-year in volume to 26,630 tonnes and trebled in value to USD88.0 million.
- Indian guar gum exports were 50,390 tonnes, worth US64.5 million, in Q1 2021, 10% less year-on-year in volume and 19% less in value. The US, Germany and China accounted for 30%, 14% and 10%, respectively, of the total exported volume.
- Peru’s chilli exports reached 19,525 tonnes, worth USD57.3 million in H1 2021, unchanged in volume and 17% more in value than in H1 2020.

Price

- Vietnam’s pepper prices started at USD3,900/tonne cif nw Europe in the first week of July, USD100 more than in June, according to IHS Markit.
- Argentine honey prices rose by 63% to USD4,250/tonne cif nw Europe for 25 mm between November 2019-March 2021, according to IHS Markit. Prices fell to USD4,100/tonne between March and the first fortnight of July.
- Brazilian organic honey prices rose by 4.3% between May and the first half of July to USD3,893/tonne cif nw Europe, after falling by 7% to USD3,730/tonne between February-May.

Jul 23 - Daily Cocoa Futures Market Report

London sat back yesterday and let New York do the work accordingly. Covering against the speculative short position only led to an upward breakout in the afternoon. The origin only showed itself "disciplined" in the market and could not offer any significant resistance. Dec 21 ended the day GBP +12 at GBP 1631, near the highs of GBP 1633. Close Dec 21 NY $ +44 at $2361. Otherwise the market had little to give. Rumour has it that Ivory Coast has already pre-sold about 1.4 mt from 21/22. But what is fixed, priced in and what is not? Or the old question...Which came first, the chicken or the egg?

Jul 23 - Brazil coffee frost sparks default fears, crop recovery may take years 

Frost that struck Brazil's coffee belt this week has sparked fears of farmers defaulting on deliveries of recently-harvested coffee that were sold to commodities traders months ago at prices that now are half the current values. An unusual cold snap, with temperatures dropping to freezing levels in a matter of minutes on the morning of July 20, delivered a blow to the heart of Brazil's coffee belt, damaging trees and harming prospects for next year's crop.

Jul 22 - Daily Cocoa Futures Market Report

Yesterday, the market was once again in motion, generating almost 30k lots and a spread of around GBP 40 in London. The Dec 21 contract rose by GBP 30 in the meantime and - as a few days ago - marked a daily high of GBP 1640. The focus was again on the Sep / Dec 21 spread, which in the morning, with good turnover, converged around GBP 10 in the meantime, but closed almost unchanged. The managed money fraction seems to continue to seek its fortune on the short side, which also suggests a significantly increased open interest. Due to yesterday's vitality in London and a slightly firmer British pound in the afternoon, arbitrage also lost as much as GBP 15 in the front months.

Jul 22 - Freak Brazil frost hits heart of coffee belt, damaging crops 

An unusual cold snap, with temperatures dropping to freezing levels in a matter of minutes, delivered a blow to the heart of Brazil's coffee belt, damaging trees and harming prospects for next year's crop, farmers said on Wednesday. Agricultural products across the western hemisphere have been beset by unusually bad weather - be it floods or extreme drought - all season. Brazil is the world's largest coffee producer, as its climate is most conducive for production of the beans. Coffee prices surged nearly 13% in response to the frosts to a 6-1/2-year high

Jul 21 - Daily Cocoa Futures Market Report

A weak British pound provided slight support only at the beginning of yesterday's trading. At a much slower pace than the previous day, it went down gently. As suspected, the Dec 21 tested the GBP 1600 support we know well yesterday, with a low of GBP 1604. Open interest increased by about 5k lots (in LDN & NY), signalling further good buying interest at current levels. Dec 21 ended the day at GBP -2 at GBP 1610. Sep / Dec 21 spread found good support at the lows of GBP -55 and ended the day at GBP -51. Volume was reasonable, for the second day in a row, at just over 30k lots compared to the weeks before.

Jul 21 - Frosts hit Brazil's cane, coffee and orange crops, says weather expert 

Frosts hit crops including sugar cane, coffee and orange in the center-south region of Brazil on Tuesday, according to a report by a Rural Clima meteorologist. Marco Antonio dos Santos, a meteorologist who is a partner and director at the weather service consultancy, said earlier on Tuesday that he had received multiple videos showing frosts, but noted it was too early to determine the exact damage to these crops. Temperatures should rise starting on Wednesday as a cold front moves away, he said.

Jul 20 - Daily Cocoa Futures Market Report

The general weakness in commodities (crude oil partly -6.5% / coffee -2% / sugar -3%) also led to a bang in cocoa. Dec 21 lost GBP -30 and ended the day at GBP 1612, close to the lows of GBP 1611. The close Sep / Dec 21 and Dec 21 / Mar 22 also continued to weaken, further forcing the downside. The Dec 21 chart shows its lowest close since mid-January. The continuation charts paint a different picture, here we may assume further support towards GBP 1600 / 1570. The industry gradually woke up and accompanied the market, mainly in the first half 22, with price hedges. Arrivals in Côte d'Ivoire as of 18.07 are at 2.087 mt vs. 1.993 mt from 19/20 (+4.7%).

Jul 19 - Frost Hits Brazilian Coffee Lands, Extent of Damage Not Yet Known

[Editor’s note: Beginning two weeks ago (Jul 12 ), approximately three nights of frost touched farmlands in Southeastern Brazil, affecting corn, sugarcane, potato and other important food and cash crops.

Frost also touched several key coffee-growing regions — in parts of the states of Minas Gerais, São Paulo, and Paraná — compounding troubles for many producers who were already negatively affected by sustained high temperatures in 2020 and drought conditions earlier this year.

While exact losses to Brazilian coffee production as a direct result of frost exposure may not be known for months, some producers have shared photos of coffee plants with leaves turned brown and black from exposure to freezing temperatures. Reuters recently contacted several Brazilian coffee brokers who were each assessing the damage that one exporting company described as “not negligible.”

Assessing the Damage

The damage caused by the most recent event is still difficult to measure. The first visible indication of damage, one that has been widely observed, is burnt leaves and their subsequent fall. Within the next 15 to 20 days, it may be possible to observe whether plants have died or been severely damaged.

Younger crops less than four years old are generally more affected by the cold, as their thinner branches, roots, and trunks are more vulnerable. Another factor is that younger plants have a less dense canopy, which favors the entry of cold air and reduces heat storage the night before the frost.

Consequences for the 2021 and 2022 harvests

Consequences for the 2021 harvest are almost zero, as in most coffee regions the seeds are already fully formed and rigid, so even if the fruit suffers damage, the chance of this seed being affected is minimal. Possible exceptions may occur in cases where there are immature fruits with high water content, but this is also not very representative of the totality of harvested areas in the country now.

The impacts of the 2022 harvest are what may be of most concern to players in the coffee chain. Agronomists begin to estimate how much coffee will be produced in the next harvest season based on conditions in the previous year. In this case, the end of the rainy season in March/April 2021, before the drop in temperatures, will affect plant production in 2022.

Jul 19 - Daily Cocoa Futures Market Report

A mixture of hedging pressure and speculative selling continued to pressure the market on Friday. After a failed bounce in the early morning, Dec 21 traded at lows of GBP 1632 and is heading towards GBP 1600. Sep 21 broke through this and found expected support there. Closing Sep21 GBP -12 at GBP 1592, Dec 21 GBP -8 at GBP 1642. Commitment of Traders figures as at 13.07 show an increase in position of 7,248 lots and now a long position again of 6,338 lots Combined. Also unsurprising after the firm move at the end of the week before last, where the market gained a good GBP 90 in a few days.

Jul 16 - Market Briefing: Cocoa (IHSmarkit)

- European Q2 cocoa grinding rises to highest level in at least 10-years
- Germany’s Q2 cocoa processing up 18% y/y, Brazil’s June processing up 32.8% y/y
- Barry Callebaut nine-month sales volumes +3.4%, Q3 chocolate sales volumes up 21.2%

Production

- Cocoa volumes arriving at Ivory Coast’s ports dipped again in weekly comparisons, to a total of 13,000 tonnes (5-11 July), down from the 24,000 tonnes during the same week last season, as well as slightly below last week’s 14,000 tonnes. Nevertheless, cumulatively, supplies still appear to be abundant, with arrivals reaching 2.074 million tonnes by July 11, up 5.1% from 1.973 million tonnes over the same period last season.

Demand

- European cocoa processing figures for Q2 2021 rose to their highest level in at least 10-years and could potentially be its all-time peak for the quarter, the European Cocoa Association (ECA) indicated. Europe’s second-quarter cocoa grind increased by 13.6 % from a year earlier to 356,854 tonnes, compared to Q2 2020’s 314,108 tonnes. The new figure was also above market expectations of +7.5%, but below Q1’s 357,815 tonnes.
- Germany’s own second quarter 2021 cocoa grind also rose 18% on the year to 93,064 tonnes, its confectionery industry association BDSI said. Grindings rose because of increased industrial demand as the economy recovered from the impact of the coronavirus crisis, with quarterly grindings close to pre-pandemic levels, the association stated.
- Cocoa crushing in Brazil totaled 310,221 60-kilo bags (18,613 tonnes) in June, a decrease of 12.3% m/m but up 32.8% y/y.
- Swiss chocolatier, Barry Callebaut, saw its nine-month fiscal year sales volumes accelerate (+3.4%) with chocolate (+21.2%) in particular reporting a strong performance.

Trade

- In June, Brazil’s total cocoa exports were down 3% y/y to 4,775 tonnes, but up 9% y/y in value at $16 million, due to Bahian exports rising in both volume and revenue, according to the government official data (Secex). The state of Bahia’s exports were 3% higher y/y in volume and saw a 15% y/y hike in value, to 4,751 tonnes and USD16 million, respectively. From February to June, Brazilian exports tallied 49,229 tonnes according to data from Ilhéus port, but according to government data, it was lower at 38,005 tonnes. Brazilian industries have already reported that 43,212 tonnes will be released in the next weeks.

Price

- Cocoa futures recovered from last week’s eight-month lows with the New York hitting a 3½-week high, spurred by hints of improved market demand. September New York cocoa reached USD2,430 on Monday’s close (July 12), however, a stronger dollar capped further gains with prices ending at USD2,402 by Wednesday (July 14).

Jul 16 - Market Briefing: Coffee (IHSmarkit)

- Ugandan coffee exports hit 30-year high
- Japanese green coffee stocks totaled 2.863 million 60-kg bags at the end of May
- Vietnamese coffee exports in June amounted to 128,036 tonnes

Production

- Brazil’s 2021/22 robusta harvest has virtually been concluded in Rondônia, while progress in Espírito Santo stood at 70-80%. Progress was slowed by a high share of green beans and a lack of work force. Harvest progress with arabica stood at 50-60% in Zona da Mata, 40-50% in Garça and in Cerrado Mineiro and 30-40% in northwest Parana. In Sul de Minas and Mogiana, it stood at slightly below 30%, Harvest pace was supported by recent dry weather conditions, while low temperatures in May and June and earlier blossoming delayed crop development.

Demand

- Japanese green coffee stocks held in ports amounted to 2.863 million 60-kg bags at the end of May 2021, up from 2.808 million at the end of the previous month but 38,967 bags below the count at the same time last year. This was the 14th straight month during which stocks were lower than in the same month last year even though the year-over-year decline is rather small. Most of the beans were from Brazil, followed by Central America and Colombia.

Trade

- Ugandan coffee exports totaled 618,388 60-kg bags in June, up from 420,563 bags one year earlier and the highest ever in a single month since 1991. This brought total coffee exports to 4,509,437 bags, up from 3,791,089 a year ago.
- Vietnamese coffee exports in June amounted to 128,036 tonnes compared with 130,285 tonnes in May and 127,700 in June 2020. This brought total exports to around 1.157 million tonnes down from 1.302 million tonnes in the same period a year ago.
- Brazilian green coffee exports in June rose 0.3% over the same month a year ago to around 2.730 million 60 kg bags, with limited shipping capacity still a problem. So far in the current cycle, a total of 8.933 million bags was exported, up 5.2% on 2019/20.

Price

- Coffee future prices settled higher by Wednesday (July 14) with the market gaining support partly from a strengthening of the real against the dollar. The benchmark September arabica coffee contract settled up 4.35 cents at 156.60 cents per pound.
- The index for arabica coffee type 6, delivered São Paulo state, closed at BRL854.69 per bag, as of 12 July, up 1.9% on one week earlier. The one for robusta was up 5% at BRL527.94. Support came from higher world market prices and a lack of selling interest for arabicas.

Jul 16 - Market Briefing: Sugar (IHSmarkit)

- Brazil’s CS crushed 45 million tonnes of sugarcane in the second half of June, + 4.4% y/y
- Indian sugar mills have exported 4.75 million tonnes so far in 2020/21
- USTR to reallocate 76,571 tonnes of sugar to several exporting countries

Production

- Mills in Brazil’s Centre/South (CS) crushed 45 million tonnes of sugarcane in the second half of June, up 4.4% on the year, industry organization Unica said. Combined with slightly higher industrial yields this allowed sugar and ethanol output to rise by almost 6% on the year to 2.9 million tonnes and 2.1 million cubic meters, respectively. Despite rises in late June, the 2021/22 season continues to trail last year. Sugar production is down 8% while that of ethanol is 4% lower.
- Indian sugar production in 2021/22 (October/September) will remain flat at around 31 million tonnes against 30.9 million in the current year, industry body the Indian Sugar Mills Association (ISMA) said.

Demand

- Indian sugar consumption in 2020/21 is put at 26 million tonnes and exports will reach 7 million tonnes, an all-time high. As a result, sugar opening stock at the start of the 2021/22 sugar season is expected to be around 8.7 million tonnes, the lowest in the last four years and down 2 million on the year.
- Pakistan’s Minister for Finance and Revenue Shaukat Tarin, ordered a procurement of 100,000 tonnes of sugar within one month to ensure strategic reserves of the sweetener in a meeting of the National Price Monitoring Committee.

Trade

- Indian sugar mills have exported 4.75 million tonnes, white value, so far in the ongoing 2020/21 (October/September) marketing year, trade body All India Sugar Trade Association (AISTA) said. Of the total exports undertaken so far, 1.58 million tonnes went to Indonesia, followed by Afghanistan at 582,776, the UAE at 447,097 and Sri Lanka at 363,972.
- The US federal government reallocated to other countries some of its lower-tariff sugar import quotas as it tries to guarantee supplies in the domestic market and rein in soaring local prices. The US Trade Representative (USTR) said it was reallocating 76,571 tonnes of sugar (raw value) to several exporting countries, with the Dominican Republic and Brazil receiving the largest shares.

Price

Raw sugar futures in New York ended lower for the third straight day by Wednesday (July 14), as market observers expect only limited damage by a recent frost wave in Brazil. Dealers said that physical demand remains weak because of high freight costs and sluggish consumption. October raw sugar declined 0.30 cents to 17.45 cents per pound, extending its decline from a four-month peak of 18.49 cents set last week.

Jul 16 - Daily Cocoa Futures Market Report

With only 750 lots of open position, July 21 quietly said goodbye with a last trade at GBP 1521. Thereafter, due to further hedging pressure from the origin, it went briskly downwards and Sep 21 tested, with a low of GBP 1601, the known support at GBP 1600. Closing price Sep 21 GBP -30 at GBP 1604. Dec 21 is now the second month (closing GBP -27 / GBP 1650). Q2 North American grinding figures are 11.68% above Q2 2020, also above expectations. Tonnage at 123k mt is at a stable pre-covid level. Asian grinding figures also came in this morning and are at the upper end of expectations at +8.98%.

Jul 16 - Recovery in Indian guar gum prices (IHSmarkit)

- 4% increase in spot price
- 10% fall in exports

India’s guar gum spot price was INR6,572 per quintal ($88.12/quintal) at the Jodhpur wholesale market on 14 July, 4% more than on 18 June.

Indian exports were 50,390 tonnes, worth $64.5 million, in Q1 2021, 10% less year-on-year in volume and 19% less in value. The US, Germany and China accounted for 30%, 14% and 10%, respectively, of the total exported volume.

The daily futures market prices on India’s National Commodity & Derivatives Exchange (NCDEX) were:

- INR6,340/quintal for deliveries in July 2021 on 14 July, INR32 more than on 15 June.

Jul 15 - Daily Cocoa Futures Market Report

The onset of hedging pressure from the origin helped, at least in the second half of the day, to push Sep 21 below the "magic" GBP 1640 mark, the very resistance that has now accompanied us for 6-7 weeks. The Sep 21 ended the day with GBP -11 at GBP 1634. The July 21 in London leaves the board today at noon, with only 883 lots of open interest one should not expect any major jumps here either. Arrivals in Côte d'Ivoire are estimated at 2.3 million mt at the end of the current crop, which would result in an absolute record crop with about 100,000 mt above the previous year. Didn't the CCC announce a few years ago, if we remember correctly, that the crop would be "capped" at 2.0 million tonnes?

Jul 15 - Area planted to potato reduced across Europe (IHSmarkit)

- Cultivated area has declined by 5% y-o-y to 498,000 ha
- Main crop earmarked for processing looks promising

The total potato area for the four largest producers in Europe (Germany, France, Belgium and the Netherlands) is almost 5% lower year-on-year and around 498,000 hectares.

There was a decrease in all countries, but decline was sharper for Belgium (-8%) and the Netherlands (-6.5%) whose planted area increased the most in past years. For the two remaining countries, the decline in around 3%. Nevertheless, this is the first time in decades that potato farmers have reduced their growing area. The declining planted area has boosted prices. In the past three or four months, traders in France and Belgium have purchased potatoes at prices higher than those released by industry organisations such as Belgapom.

Last week’s heavy rainfall could hinder a rapid enough build-up of dry matter in the early tubers. This could lead to some delays in the delivery of contracts.

Overall, potato plants have developed a lot of leaves, but tubers are much smaller than on average. “A lot of haulm; no tubers” is a remark often read on field reports.

Tuberization in maincrop varieties seems higher than what was the case in the last three or four years. A high tuber count is usually a promise of a potential good harvest, but of course one needs enough water in August and September to fill and fatten all the tubers. At the same time, a heatwave or a drought will have a greater impact on plants which did not develop many roots.

Production costs for the 2021-22 season are building up as prices for blight sprays, energy and fertilizers have all increased. There is still some uncertainty on the demand side as new waves of Covid-19 and potential new restrictions could slow down raw material demand from the processing industries.

In the first quarter of 2021, frozen French fries trade has remained below 2020’s levels for the same period. Exports from Belgium declined 8% to 647,000 tonnes while those from the Netherlands dropped by 13% to 388,000 tonnes. The market shows clear sign of recovery in North America, with shipments from Canada going up from 263,000 tonnes to 275,000 tonnes (+4%) and those from the US recovering slightly from 255,000 tonnes to 266,000 tonnes.

Jul 14 - Daily Cocoa Futures Market Report

London opened slightly higher, certainly on the back of the positive grinding figures, although these were only at pre-crisis levels, not forgetting that a considerable volume was being ground in Europe rather than at the origin in view of Côte d'Ivoire's energy supply problems. However, a clear reaction failed to develop. Technical resistance at the 100-day moving average (GBP 1661) and new selling pressure erased the gains, with the Sep 21 contract ending the day 5 points down at GBP 1645. The Jul/Sep21 front spread converged around GBP 23, with the July 21 contract expiring tomorrow morning gaining GBP 18.

Jul 13 - Daily Cocoa Futures Market Report

After the rapid rise in prices on Friday afternoon, the cocoa market continued to move almost unchecked upwards yesterday. The significant expansion of the speculative short position (see yesterday's report) led to the "compulsion" of some shorts to liquidate their position yesterday. The Sep 21 gained GBP +40 and ended the day at its highs of GBP 1650, thus (finally) recording another breakout from the range of the last 6 weeks. Year-on-year, the grinding figures were better than expected (approx. +7%). Is Q2 20 enough of a comparison? Here are the comparisons of the last years: ECA Q2 20 vs. 19 +3.46% / vs. 18 +0.2%, Germany Q2 21 vs. 19 -1.21% / vs. 18 -1.37%. This puts the rather average tonnage (ECA 356,854mt) into a different perspective - but do the "specs" know that ???

Jul 13 - Coffee Prices Soar After Bad Harvests and Insatiable Demand (DJ)
     Global coffee prices are climbing and threatening to drive up costs at the breakfast table as the world's biggest coffee producer, Brazil, faces one of its worst droughts in almost a century.

     Prices for arabica coffee beans -- the main variety produced in Brazil -- hit their highest level since 2016 last month. New York-traded arabica futures have risen over 18% in the past three months to $1.51 a pound. London-traded robusta -- a stronger-tasting variety favored in instant coffee -- has risen over 30% in the past three months, to $1,749 a metric ton, a two-year high.

     Brazil's farmers are girding for one of their biggest slumps in output in almost 20 years after months of drought left plants to wither. Brazil's arabica crop cycles between one stronger year followed by a weaker year. Following a record harvest in 2020, 2021 was set to be a weaker year, but the drop is more severe than expected.
"I've been growing coffee more than 50 years, and I've never seen as bad a drought as the one last year and this year," said Christina Valle, a third-generation coffee grower in Minas Gerais, Brazil's biggest coffee-growing state.

"I normally take three months to harvest my coffee; this year it took me a month," she said.

     Brazil's total coffee harvest this year is expected to drop by the biggest year-over-year amount since 2003, according to the U.S. Department of Agriculture. Its arabica crop is forecast to be almost 15 million 132-pound bags smaller than in 2020.

     Others are guarding for an even larger slump. Dutch agricultural bank Rabobank expects the harvest to be 17 million bags smaller, while commodities brokerage ED&F Man, whose Volcafe arm is one of the world's largest coffee traders, expects a decline of more than 23 million bags.
"A drop that severe is unprecedented," said Kona Haque, head of research at ED&F Man.

     The pandemic shook up how consumers drink coffee. Demand for at-home machines and instant brews rose, compensating somewhat for closed coffee shops. The price rally comes just as Western nations are emerging from lockdowns and cafes are welcoming back customers starved of out-of-home coffee culture.

     Global coffee consumption is expected to exceed production this year for the first time since 2017, according to the USDA. 165 million bags of beans are expected to be consumed in 2021. That is 1.8 million bags more than last year. Meanwhile, global coffee production is expected to decline to 164.8 million bags.

     There are other factors behind the price rally. Two other major producing nations, Colombia and Vietnam, have had much better harvests than Brazil but are struggling with a different issue: Port delays have left beans sitting idle on the dock.

     Exports of Colombian coffee, particularly desired by baristas for its milder flavor, fell as antigovernment protesters blocked highways and ports. A shortage of shipping containers and rocketing freight costs hit Vietnamese farmers, who produce more than a third of the world's supply of robusta.
"The whole supply chain suffered not only a significant increase in costs but also massive delays," said Carlos Mera, head of agri-commodities market research at Rabobank. Unlike other commodities, coffee can only be moved around the globe in containers, he said.

     Investors are also playing a role, betting that commodities will benefit from rising prices generally. Some investors bid up the price of coffee by putting money in commodity index funds that track broad baskets of commodities from industrial metals to coffee and cocoa, said Mr. Mera.
"There is a lot of money right now that is very keen on holding commodities as real assets, as hedges against inflation," he said.

     Coffee roasters have so far held off from passing higher prices on to consumers, said Ms. Haque. The higher costs of beans coupled with higher freight costs could mean roasters start charging consumers more if they think post-lockdown demand will be strong, she said.

     In Brazil, farmers say their stockpiles left over from last year's bumper crop are dwindling and they are concerned they could run out before next year's harvest begins.
"We 're a bit worried about having enough to sell next year," said José Marcos Magalha, president of the Minasul coffee cooperative. The cooperative is urging members to deliver whatever coffee they have to the cooperative so that it can keep meeting its orders, he said.

     Coffee lovers could still find a reprieve. Brazil's spring rains, which typically fall in September, will be crucial for determining whether damaged coffee plants can recover and produce enough beans during next year's harvest, said Steve Pollard, a coffee analyst at brokerage Marex.

     The alternative could see prices rise even higher, he said. Coffee plants take about 2 1/2 years to develop, and farmers can't respond quickly by simply planting more crops. "If there is a significant deficit then prices could skyrocket," he said.

Jul 12 - Daily Cocoa Futures Market Report

After a week in negative territory, or below GBP 1600 / Sep 21, a Friday afternoon was enough to close the market on a positive note. A weak US$, as well as decent profit taking by the shorts, took Sep 21 to highs of GBP 1611. Closing just below that at GBP 1610 / GBP 26. Commitment of Traders as of 06.07 reflected the "worries" of some shorts and they liquidated at least part of their position. These same shorts increased their position (gross within managed money) by almost 8k lots to 83,010 lots, the largest speculative short position since July 2020. Net both exchanges now stand at a short position of 910 lots. Tomorrow, the ECA grinding figures will be published.

Jul 09 - Market Briefing: Cocoa (IHSmarkit)

- Ghana’s cocoa arrivals rose to 981,222 tonnes as of June 17
- US chocolate market expanded by 1.8% in 2020 to reach USD18.92 billion
- Ivory Coast’s cocoa grinding fell by 22.2% in June to 35,000 tonnes

Production

- Ghana’s graded and sealed (G&S) cocoa arrivals rose to 981,222 tonnes as of June 17 from the start of this year’s harvest on October 1, compared with 754,800 tonnes the previous season, the latest figures from marketing board Cocobod showed. Cocoa production in Ghana is expected to reach 950,000 tonnes this season, higher than a previous Cocobod forecast of 800,000 tonnes. IHS Markit currently places Ghana’s production for the 2020/21 season at 970,000 tonnes, up from 800,000 tonnes in the previous season.

Demand

- The US chocolate market expanded by 1.8% in 2020 to reach USD18.92 billion, Statista data via research findings by GlobeScan and Fairtrade indicated. Fairtrade cocoa sales volumes topped other commodities and grew by 27% over the year, resulting in almost USD3 million in Fairtrade Premium payments for cocoa farmers. In the UK, Fairtrade cocoa sales volumes topped other commodities and grew by 3% over the year, generating an outstanding GBP6 million in Fairtrade Premium payments for cocoa farmers. In the Netherlands, Fairtrade cocoa continued to experience strong growth of 16% in 2020. As a result, Fairtrade farmers received approximately USD3.1 million in Fairtrade Premium for cocoa beans sold to the Dutch market.
- Ivory Coast’s cocoa grinding fell by 22.2% in June to 35,000 tonnes, from 45,000 tonnes a year ago, data from exporters' association GEPEX showed. In total, grinders processed 402,000 tonnes of cocoa beans by the end of June, down from 422,000 tonnes over the same period last season

Trade

- Ghana shipped 465,136 tonnes of cocoa beans globally in 2020, with over half, 255,778 tonnes, heading to the EU (minus the UK). Total exports of cocoa bean and cocoa preparations, from Ghana to the EU, reached 341,516 tonnes.

Price

- Cocoa futures hit several eight-month lows this week, aided by demand concerns amid ample cocoa supplies. By Thursday (July 8), September New York cocoa on Thursday (July 8) closed down USD1 to USD2,295, while September London cocoa closed down GBP9 to GBP1,584. Cocoa prices are also generally weak on forecasts for rain in much of West Africa this week, which should aid cocoa yields.
- In Brazil, domestic cocoa prices started last week at BRL175.00–188.00/15-kilo bags, and after an upward movement during the week, reached BRL179.00–190.00 (US$2,366–2,511/tonne) on July 1. There was no report of prices last Friday (July 2).

Jul 09 - Market Briefing: Sugar (IHSmarkit)

- Philippines sugar production currently at 2,134,640 tonnes, down from 2,141,914 last season
- UK government faces legal challenge over duty-free tariff quota of 260,000 tonnes for importers
- EU sugar output forecast at 15.5 million tonnes for 2021/22, up from 14.5 million in 2020/21

Production

- Philippines sugar production in the week ended 27 June 2021 amounted to 3,923 tonnes, up from 3,761 in the same period a year ago, SRA data show. This brought total production so far in 2020/21 to 2,134,640 tonnes, down from 2,141,914 by the same time in 2019/20. The sugarcane crush has reached 25,142,292 tonnes, up from 23,250,661 tonnes last year.
- White sugar production in the EU-27 is forecast to rise in the 2021/22 season to 15.5 million tonnes, up from the prior season’s 14.5 million. This would mean that the sugar beet harvest could reach up to 110 million tonnes, up 11% y/y.

Demand

- The UK government is to face a judicial review over its decision to grant a duty-free tariff quota of 260,000 tonnes for importers of cane sugar. The tariff quota was the only major unilateral step taken by the UK government to liberalize its import regime when it created its Global Tariff prior to leaving the EU customs union last year. According to British Sugar, the creation of the autonomous tariff rate quota (ATQ) amounted to a subsidy in favour of the UK’s sole cane sugar refiner, Tate & Lyle.

Trade

- Total UK imports of sugar from non-European origins in January-April totaled 170,564 tonnes – down by 17.3% on the same period in 2020. Exports to the UK from Central American states – El Salvador, Nicaragua, Costa Rica and Guatemala – amounted to a combined total of more than 47,000 tonnes over the four months, compared with just 374 tonnes in the corresponding period last year. But imports from Brazil, which had been widely assumed to be a likely beneficiary of the ATQ, are down by almost half over the January-April period, at 34,665 tonnes.

Price

- Raw sugar futures in New York ended lower for a third straight day by Thursday (July 8), as market observers expect only limited damage by a recent frost wave in Brazil. Dealers said that physical demand remains weak because of high freight costs and sluggish consumption. October raw sugar declined 0.30 cents to 17.45 cents per pound, extending its decline from a four-month peak of 18.49 cents set last week. The March contract fell 0.24 cents to 17.78 cents, and the rest of the board lost between 0.05 and 0.22 cents in volume of 81,853 lots.

Jul 09 - Market Briefing: Coffee (IHSmarkit)

- Brazil’s coffee harvest progress from the 2021/22 crop stood at 54% as of 7 July
- Global coffee consumption seen at 167.20 million bags in 2020/21
- Indonesia’s 2020/21 coffee exports rose to 8.2 million 60-kg bags

Production

- Brazil’s coffee harvest progress from the 2021/22 crop stood at 54% as of 7 July, reported local consultancy Safras & Mercado, which compares with 48% in the preceding week, 56% last year, and a five-year average of 58%. Progress with arabica crops stood at 42%, against 46% last year and 50% for the five-year average. For robusta crops, the harvest pace reached 73%, down from 79% and 84%, respectively. Safras & Mercado’s estimate translates into 30.45 million 60-kg bags harvested.

Demand

- Global coffee consumption is now seen at 167.20 million bags this 2020/21 season from a previous 167.58 million bags and below the 168.5 million seen before the pandemic, said the International Coffee Organization (ICO). In addition, it raised its 2020/21 surplus estimate to 2.30 million bags in June from 2.01 million bags in May, primarily due to a reduced consumption projection.

Trade

- Indonesia's total coffee exports rose to 8.2 million 60-kg bags in 2020/21 from 7.711 million in 2019/20. Exports of green beans surged to 6.4 million bags from 6 million a year earlier, while shipments of soluble coffee recovered somewhat to 1.6 million bags after falling to a four-year low of 1.5 million the year before.
- Colombian exports of washed arabica coffee in June 2021 reached 986,000 60-kg bags, down 11% from the 1.111 million bags in the same month last year. This brought exports in the first nine months of the current 2020/21 cycle to 9.478 million bags, flat on the year.
- Members of the ICO exported 9.786 million 60-kg bags of coffee in May 2021, down 10.1% from 10.901 million in the same month last year.

Price

- Arabica coffee futures took a sharp drop earlier in the week, with September arabica at 148.10 cents per pound, amid a commodities sell-off. A weaker Brazilian currency, with the real trading at its weakest against the dollar since early June, was also seen as a bearish factor. The perception that most Brazilian coffee escaped more serious damage from last week’s frosts also weighed, despite reports of localized losses. By Thursday (July 8), prices had recovered to 152.25 cents per pound.
- Meanwhile, farmers in the Vietnam’s Central Highlands sold at VND34,600-35,500 ($1.50-1.54) per kg, down from VND34,800-36,200 a week earlier. In Indonesia, Sumtran robusta beans were offered with $30-50 premiums over August, unchanged from last week.

Jul 09 - Market Briefing: Spices and Exotics (IHSmarkit)

- 47% increase in France’s honey crop.
- India closed Q1 with a sharp rise in pepper exports.
- Bullish Chinese dehydrated garlic prices.

Production

- India’s 2020-21 cumin crop is expected to reach 732,200 tonnes, 6% less year-on-year, on 1.24 million hectares, 2% less.
- Spain’s saffron crop may reach 600 kilos in the 2021-22 season, after dropping to 450 kilos in the 2019-20 season due to severe drought.
- France’s honey output rose by 47% year-on-year to 32,000 tonnes in 2020 thanks to a warm winter and a 12% increase in beehive numbers.

Demand

Demand for spices is rising in the US hostelry industry as the US processor McCormick ‘s results reveal. Its revenues rose by 11% year-on-year to 1.5 billion from March-May, bringing sales to USD3.3 bln in December 2020-May 2021, 16% more y-o-y thanks to robust flavour sales in the horeca sector.

Trade

- India’s cumin seed exports doubled year-on-year to 68,300 tonnes, worth USD133.5 million in Q1 2021, 44% more in value, according to customs data. China was the main importer of whole product, taking a third of the total exported volume.
- India’s pepper exports increased by 47% in volume to 6,020 tonnes, worth USD24.7 mln in Q1 2021, up from USD16.4 mln in Q1 2020. Crushed product sales accounted for 54% of the total volume. The US was the main importer, accounting for 57% of the total volume.
- Vietnam’s pepper exports fell by 17% in volume to 121,330 tonnes but rose by 23% in value to USD379.5 million from January-May 2021 thanks to price hiccup in Q1 2021, according to Vietnamese customs data. The US and the UAE were the main importers, accounting for 20% and 6%, respectively, of the total volume.

Prices

- India’s pepper prices have been stable at USD5,500/tonne ex-works NW Europe for MG1 grade since April, 19% more than in January 2021.
- Vietnam’s pepper prices started at USD3,900/tonne cif NW Europe in the first week of July, USD100 more than in June.
- Chinese Grade A garlic powder was quoted at USD3,000 per tonne cif in June, 20% more month-in-month and 40% more y-o-y. First grade granules were listed at USD3,054/tonne cif this June, 7% more m-o-m and 48% more y-o-y.

Jul 09 - Market Briefing: Dried Fruit and Nuts (IHSmarkit)

- 3.5% increase in Australia’s macadamia crop.
- Vietnam is taking advantage of the weak Indian demand for cashews.
- 15% increase in US pecan exports.

Production

- Australia’s 2021 macadamia output estimate has been downgraded by 4.5% to 48,500 (in-shell) tonnes at 3.5% moisture (52,000 tonnes at 10% moisture), after heavy rains hit plantations in New South Wales (NSW) between March-April, according to the Australian Macadamia Society (AMS). The new forecast represents a 3.5% increase on last year’s crop.
- India’s government has planned to reach a peanut crop of 14 million tonnes in the 2025-26 season, up from 10.1 mln tonnes in the 2020-21 season, through its agricultural reform.
- US peanut farmers had completed 48% of pegging as of July 4, just three percentage points behind the same stage a year ago. Some crop progress has been hindered in Virginia due to drought and farmers are using irrigation.
- Turkey’s 2021-22 dried apricot production is expected to reach 110,000 tonnes, 22% more y-o-y.

Demand

- Weak Indian demand due to lockdowns in Q1 forced India’s cashew industry to export 34,000 tonnes of Raw Cashew Nuts (RCN) to Vietnam from January-March 2021 to offset losses.
- Demand for Turkish hazelnuts is subdued, importers and processors awaiting TMO’s purchasing prices in the last week of July.

Trade

- Vietnam’s cashew exports rose by 17.2% year-on-year in volume to 214,390 tonnes and by 14% in value to USD1.27 billion from January-May 2021, according to Vietnamese customs data. The US and China are the main importers, accounting for 29% and 15%, respectively, of the total volume.
- Indian cashew exports rose by 19% year-on-year in volume to 19,670 tonnes but fell by 3% to USD125.0 mln in Q1 2021.
- Global sales of US pecans were 8.2 million in-shell basis pounds this May, 23% less year-on-year, bringing seasonal (September-May) exports to 95.1 mln lbs, 15% more y-o-y.
- The total quantity of Turkish hazelnut exports between 1 September 2020-30 May 2021 was around 230,545 tonnes, down from 293,570 tonnes in the same period last year.
- Turkey’s processors are closed to clearing out the 2020-21 dried apricot production after exporting 84,320 tonnes, 9% less year-on-year

Price

- Turkey’s dried apricot prices averaged USD3,788 per tonne fob in June, a third more y-o-y.
- India’s government has announced a minimum support price (MSP) of INR5,550 per quintal (USD74.2/quintal) for peanuts.

Jul 09 - Daily Cocoa Futures Market Report

Continued selling pressure from the speculative community, put further pressure on prices yesterday. Sep 21 hit a 12-month low of GBP 1572 and ended the day GBP -9 at GBP 1584. 2022 dates are holding firm just above GBP 1650 and the structure continued to widen slightly. Buying interest from the industry is focusing more and more on next year's dates, this coupled with concerns (keyword Silly Season) about the coming crop is likely to cause at least the structure of the 20/21 & 21/22 crop to diverge further and speculative long positions do not necessarily gain in attractiveness as a result.

Jul 08 - Daily Cocoa Futures Market Report

The previous day's weak close in New York was followed by further speculative selling late yesterday morning, particularly from the London community. This helped the Sep 21 to lows of GBP 1678, close to the May lows, which (based on the 2 month) are GBP 1675. In a near perfect U turn, the market recovered to almost unchanged in the afternoon. Closing price still GBP -10 at GBP 1593. Industry showed cautious activity, mainly for dates in 2022. Which ended the day almost unchanged.  The next few days will show how sustainable yesterday's movement was. The GEPEX reported a decline of 21% in the Ivory Coast's grinding figures in June. This is certainly due to further problems in the energy supply. Next week on Tuesday, ECA will start with the Q2 grinding figures, NCA will follow on Thursday.

Jul 07 - Daily Cocoa Futures Market Report

While Sep 21 dared a tentative look up in the morning, selling pressure in New York leads to a key reversal in the afternoon. Sep 21 turned around GBP 30 and traded at lows of GBP 1599, where, as seen in the last 6 weeks, buying interest from the industry set in. Closing Sep 21 GBP -24 at GBP 1603. New York Sep 21 ended the day at $2298 ($-21), the lowest close in 9 months now. Perhaps the market has a surprise or downside breakout in store for us today. Market sentiment continues to be Bearish...but if all are Bearish, this should be the biggest support of all. The origin held back yesterday and continues to look for the promised land above GBP 1640.

Jul 07 - EU sugar output seen higher in 2021/22, stocks to climb

Sugar production in the European Union is forecast to rise in the 2021/22 season leading to an increase in stocks of the sweetener, the European Commission said on Tuesday in a short-term outlook report. The EU's executive projected white sugar production would rise to 15.5 million tonnes in 2021/22, up from the prior season's 14.5 million.

Jul 06 - Fall in Indian cumin seed price steepens (IHSmarkit)

- 2% fall in spot prices.
- Exports increased by a third in Q1.

The Indian cumin seed fob spot price closed at INR13,600 (USD182.3/quintal) on 5 July at the Unjha market (Gujarat, North West), 2% less than on 7 June.

India’s 2020-21 cumin crop is expected to reach 732,200 tonnes, 6% less year-on-year, on 1.24 million hectares, 2% less.

Cumin seed exports doubled year-on-year to 68,300 tonnes, worth USD133.5 million in Q1 2021, 44% more in value, according to customs data. China was the main importer of whole product, taking a third of the total exported volume.

Updated daily futures market prices on India’s National Commodity & Derivatives Exchange were:

Deliveries in June 2021 closed at INR13,945/quintal on 18 June, 2% less than on 19 May.

Jul 06 - China’s fresh garlic purchasing prices expected to fall but fob prices remain high (IHSmarkit)

- Exports markets were mostly subdued in May.
- Coldstore buying remains low in July.

In May 2021, China’s fresh garlic exports continued the poor performance of April and fell to 125,000 tonnes, 17% down month-on-month and a 56% decrease from a year ago.
- The export price was USD1,000 per tonne fob in May, unchanged from the preceding month, but, 29% up year-on-year.
- IHS Markit was told by a local source that the high sea freight costs remain a challenge to Chinese exports.
- South-east Asia is the largest destination. Indonesia and Vietnam jointly accounted for about 44% of China’s total volumes in May. Both saw massive decreases compared with the same time last year, Indonesia 76% down y/o/y to 39,000 tonnes and Vietnam 37% down y/o/y to 16,000 tonnes.

In May, China’s export prices to Indonesia rose 37% y/o/y to USD820/tonne fob, USD514/tonne cheaper than those to Vietnam.

- China’s local media reported that total Indonesian consumption (including household and industrial) is about 500,000 tonnes per year; national output is about 20,000 tonnes and the rest relies on imports. Chinese garlic sent to Indonesia are mostly lower grade compared with those to Vietnam.
- In the same month, China’s shipments to Brazil and the US fell to 5,000 tonnes and 4,000 tonnes, decreases of 48% y/o/y and 6% y/o/y, respectively. The fob prices to both countries fell by 16% y/o/y and 6% y/o/y, respectively.

In China’s producing regions, there is more selling than buying. Some analysts forecast that purchasing prices are at risk of falling further.
- Up to the first week of July, at Shandong’s Jinxiang (the main producing region), among the 1,000 cold storage facilities, fewer than 60 units have started collecting garlic. Vendors normally rent these storage facilities and collect garlic for future sales or for speculation purposes.

On 4 July, the purchasing price of mixed grade white garlic from the growers at Jinxiang was CNY6-6.2 per kilo (USD0.93-0.96/kg), coldstore garlic CNY4.36-4.66/kg.

Jul 06 - Daily Cocoa Futures Market Report

With New York gone, London struggled to get going yesterday. The firm pound was ignored altogether, with Sep 21 opening at GBP +8 and trading in a GBP 1612/1618 range until the afternoon. In the afternoon, the market ran slightly firmer and Sep 21 ended the day at GBP +19 at GBP 1627. Arrivals in Ivory Coast as of 04/07 stand at 2.093 mt vs. 1.989 mt in 19/20 (+5.2%). Pre-sales (priced in as well as open contracts) for 21/22 in Côte d'Ivoire are expected to be around 1.02 mt. This is about the same level as last year, but far behind 18/19 and 19/20. Ghana is around 370k mt and thus in part significantly below previous years.

Jul 05 - Daily Cocoa Futures Market Report

While the market stayed at the upper end of the current range (GBP 1640) for much of last week, hedging pressure from the origin led to the corresponding correction on Friday. The Sep 21 traded down to lows of GBP 1603, back into interesting territory for the industry. Closing price Sep 21 GBP -9 at GBP 1608. The arbitrage, for the nearer dates, approached a good GBP 30 last week alone, suggesting that further industry orders lie in the direction of GBP 1600. Commitment of Traders as of 29.06 show a further significant reduction of the net long position by 13,634 lots to "only" 14,109 lots long. Managed Money increased its speculative short position by 9,198 lost to now 23,160 lots short.

Jul 02 - Market Briefing: Spices and Exotics (IHSmarkit)

- Upward pricing pressure in cloves market.
- Vanilla demand recovery.
- Vinacas calls on farmers to reduce pepper planted area.

Production

- Global cloves production looks to be short this year, particularly in view an estimated 50% decline from normal levels in Indonesia’s crop after months of heavy rains.
- Madagascar’s next crop should start from September and run through to November and is projected to be a good one of possibly 12,000 tonnes.
- Papua New Guinea’s vanilla crop might exceed 300 tonnes in 2021. Uganda’s vanilla output is expected to exceed 100 tonnes in 2021 due to government support after suffering several years with record-low prices. Comoros’ production is expected to range from 35-50 tonnes.
- US and Mexican chilli production is progressing well although growers are facing rising production costs: transport, wages and inflationary trends which might force them to push up prices.
- The Peruvian ginger harvest has just started and exporters have sold out the 2020-21 crop. The crop might rise by 30% year-on-year due to acreage expansion, after prices started to soar between November 2020-February 2021 as a result of a supply shortage.
- Vietnam’s 2021 pepper crop is expected to fall by 18% year-on-year to 200,000 tonnes.
- The Vietnamese Pepper Association (Vinacas) has recommended halting the pepper production expansion led by farmers in central origins due to rising prices in Q1. The association believes that farmers should reduce the planted area by 20,000 ha to 120,000 ha to find a balance between demand and supply.

Demand

- Cloves are generating strong global demand, traders report.
- In addition, demand for industrial-grade vanilla is recovering after Covid-19 starts to be controlled, cutting carry-over stocks. The demand for Papua New Guinea’s black and gourmet vanilla is said to be growing strongly.
- Indian turmeric is attracting decent levels of demand, as shown in export data (see Trade below).
- Peruvian ginger is also selling well internationally (see Trade below).

Trade

- Shortages of sea freight containers and rising freight costs
continue to make trading extremely difficult, hampering the flow of material.
- Vanilla producer Papua New Guinea is facing logistical challenges due to scarcity of sea and air freight services, favouring smuggling across the border shared with Indonesia.
- India’s turmeric exports in the first two months of this year reached 24,790 tonnes, worth USD29.4 million, 10% more year-on-year in volume but 16.7% less in value. The main importers were Bangladesh and the UAE, taking 23.5% and 9.2% of the total volume.
- Peruvian ginger exports rose by 12% year-on-year in volume between January-May 2021 to 12,800 tonnes and by 26% in value to USD30.4 mln, after reaching record international sales of 51,120 tonnes, worth USD107.1 mln, in 2020.

Price

- International cloves prices look set for substantial increases over the coming months on strong demand and diminished supply. Prices are already very firm and underlying upward pressure is also coming from the massive hikes in freight rates.
- Indonesian cloves are currently being offered at around USD9,250/tonne cfr Singapore, which is substantially higher than levels indicated at the start of this year.
- The Indian spot fob turmeric price reached INR7,499 per quintal (USD103/quintal) at the Nizamabad market (Telangana state, South Central) on 25 June, 2% less than on 26 May. Deliveries in June 2021 closed at INR7,420/quintal on 18 June, 9% less than on 19 May.
- The average export fob price of Peruvian ginger fell by 8% month-on-month and by 19% y-o-y to USD1,523/tonne fob this May.

Jul 02 - Market Briefing: Cocoa (IHSmarkit)

- Colombia’s cocoa output in Q1 reached 20,836 tonnes, up 47% y/y
- Peruvian cocoa paste exports in May totaled USD939,545 fob in value, 210,253 kilos in volume
- Cocoa butter prices in June fell by 3.9 cents to 263 cents per pound

Production

- Colombia’s cocoa output in Q1 (January-March) totaled 20,836 tonnes, a 47% y/y increase and the highest figure in the history of the country’s production. This was not only above last year’s volumes, which had only reached 14,174 tonnes by Q1, but is also higher than the estimated 14,550 tonnes, according to National Federation of Cocoa growers, Fedecacao.
- Cumulatively, Ghana’s graded and sealed (G&S) cocoa arrivals reached 960,892 tonnes by June 10. This is up from 752,639 tonnes (+27.7% y/y) from the previous season, Cocobod data showed.

Demand

Ghana is said to be struggling to hit its cocoa export targets for the 2021/2022 season, with sales at the end of last week totaling around 350,000 tonnes-worth of contracts, two sources at the cocoa regulator said. Last week's sales of Ghanaian cocoa contracts included negative differentials between of GBP100-130 per tonne. Conversely, Ivory Coast claims to be on to meet its September sales targets, with the world’s largest producer allegedly selling 1.18 million tonnes-worth of cocoa contracts for the 2021/2022 season.

Trade

Peruvian cocoa paste exports in May totaled USD939,545 fob in value and 210,253 kilos in volume; up from April’s USD778,303 and 189,699 kg, but not as high as May 2020’s USD1.5 mln and 316,993 kg. In year-to-date figures, volumes totaled 732,047 kg at a value of USD3.2 mln fob, compared to USD6.8 mln during the same period in 2020 and 1.3 mln kg. Cocoa bean exports in April totaled USD6.6 mln fob in value and 2.4 kg in volume, down from USD9.5 mln and 3.4 mln kg in March, though up from April 2020’s USD4.7 mln and 1.7 mln kg. Year-to-date values for cocoa bean exports topped USD34.7 mln fob and 12.8 mln kg, compared to the same period in 2020, where USD25.1 mln and 8.8 mln kg were dispatched.

Price

Cocoa butter prices in June fell by 3.9 cents to 263 cents per pound from last month’s average of 267 cents per pound, according to IHS Markit. This time last year butter prices were at around 277 cents per pound, with current prices likely to drop further. Powder prices again remained stable at 95 cents per pound and the combined cocoa powder and butter ratio was little changed in June at 3.29, up slightly from 3.26 last month. The grind margin made another move higher to 30.3, which indicates rising demand for cocoa products.

Jul 02 - Market Briefing: Sugar (IHSmarkit)

- Brazil's Centre/South sugar production in 2021/22 season cut to 34.1 million tonnes
- Maharashtra mills record almost 40-50% lapse in month-to-month sugar sales quota
- EU sugar consumption estimate for EU-27 in 2020/21 at 14.8 million tonnes

Production

Czarnikow reduced its estimate of sugar production in Brazil's Centre/South in the current 2021/22 season to 34.1 million tonnes, from an April projection of 35.6 million and compared with a record 38.5 million last year, as persistent dry weather hurt cane development. It now expects the cane crush to fall to 535 million tonnes this season, the smallest amount since 2012/13, from a previous estimate for 558 million tonnes and an unprecedented 605 million tonnes processed in 2020/21.

Demand

- Millers of Maharashtra have recorded an almost 40-50% lapse in month-to-month sugar sales quota, which would see the state starting the next season with around 6.0 million tonnes of unsold stock. Mills have been struggling to fulfil their monthly sales quota since the start of the 2020/21 sugar season and have taken to selling sugar below the minimum selling price (MSP) of INR31 per kg.
- The European Commission left its sugar consumption estimate for EU-27 in 2020/21 at 14.8 million tonnes, but now expects ending stocks to fall to 1.125 million tonnes at the end of the 2020/21 season, from 2.160 million last year. EU imports were also cut by 150,000 tonnes to 2.150 million.

Trade

The EU awarded 4,079 tonnes of sugar import licences under its CXL and Balkan TRQs for June 2021, down from 8,533 in May and compared with 8,120 tonnes in the same month last year. Some 800 tonnes were awarded under the “erga omnes” quota, 155 tonnes under the special quota for India and 3,124 tonnes were awarded under the Balkan quotas of which all for Serbia. The EU also awarded 20,732 tonnes of sugar import licences to countries pursuant the EPA/EBA agreements in the week to 23 June, up from 1,350 tonnes in the previous week. The top receivers so far were Mauritius (125,025 tonnes), and Fiji (89,998 tonnes).

Price

Brazil’s frost has been impacting prices this week, with raw sugar futures in New York rising to a four-month high of 18.49 cents in the course of Thursday’s (July 1) session. However, the benchmark contract for October delivery finally settled at 17.94 cents per pound. Several agricultural areas of Brazil were hit on Thursday by a third day of frost, which impacted corn, coffee and sugarcane, as well as products for local markets such as beans, potatoes and tomatoes, according to consultancy Rural Clima.

Jul 02 - Market Briefing: Coffee (IHSmarkit)

- Honduran coffee exports in June up 28.4% y/y
- Costa Rican coffee exports totaled 164,426 60-kg bags, up 13.9% y/y
- Arabica coffee futures closed up more than 3% on Brazilian frost

Production

Rural Clima outlined that Brazilian frosts on Thursday (July 1) affected the west and north of the state of São Paulo, the triangle of Minas Gerais and some southern areas of Minas Gerais as well as the southwest of Goiás. Minas Gerais is Brazil's top coffee producing state that accounts for around 40% of total arabica output. In addition, the polar mass over central Brazil may cause new frosts on Friday. Brazil is already harvesting a smaller-than-normal crop due to dryness this year and frost damage would main the potential of next year’s crop.

Demand

Nespresso, the premium coffee division controlled by Nestle SA, has not increased prices for its capsules yet despite a sharp increase in benchmark prices for arabica beans, opting to wait and see if the upward trend is sustainable over time. The company has so far absorbed price increases instead of passing on the higher costs to consumers, until there is more clarity about the market direction. Direct sales to consumers increased 20% during the pandemic period, forcing the company to adjust to higher online sales and logistics demand. Though its boutique coffee stores are all open again, sales to offices are slow and volumes on the selling channel are not expected to recover to pre-pandemic levels until at least 2022.

Trade

- Honduran coffee exports in June 2021 amounted to 827,995 60-kg bags, up 28.4% from 644,726 bags in the same month last year, preliminary figures from the National Coffee Institute (IHCAFE) showed. This brought total exports in the first nine months of the current 2020/21 (October/September) season to 4,604,473 bags, up 5.1% from the same period last year.
- Costa Rican coffee exports in June 2021 totaled 164,426 60-kg bags, up 13.9% from the same month last year, data from the National Coffee Institute (ICAFE) showed. This brought total shipments in the first nine months of the current 2020/21 (October/September) season to 862,068 bags, up 2.4% from last year.

Price

Arabica coffee futures on ICE closed up more than 3% (June 28) on forecasts for frosts this week in Brazil. Benchmark September arabica contract settled up 4.90 cents at 162.70 cents per pound, in dealings between 157.50 and 163.70 cents. December was up 4.80 cents at 165.45 cents per pound and the rest of the board gained 4.60-5.00 cents. Trading volume rose to 40,611 lots from 32,738 in the previous session.

Jul 02 - Daily Cocoa Futures Market Report

If the market / Sep 21 still dared to look above GBP 1640 (high GBP 1642) at lunchtime, this was only short-term. This led to slight hedging pressure from the origin, the Sep 21 corrected and ended the day with GBP -17 at GBP 1617. One may call it a yo-yo, the other an accordion, but one thing remains certain - the market is always right (we'll throw something into the piggy bank) and the range continues to hold. According to unofficial news, Côte d'Ivoire has now marketed over 1 million mt of 21/22 crop. If this is even close to the truth and the contracts are not fixed (as suspected), a breakout is likely to be further capped by successive hedging pressure. NY remains closed on Monday.

Jul 01 - Peruvian ginger exports increased at lower prices (IHSmarkit)

- 12% increase in exports.
- Gradual fall in export prices since April.

Peruvian ginger exports rose by 12% year-on-year in volume to 12,800 tonnes and by 26% in value to USD30.4 mln in January-May 2021, after reaching record international sales of 51,120 tonnes, worth USD107.1 mln, in 2020.

The US and the EU were the main importers, accounting for 54% and 25%, respectively. The Netherlands was the main European purchaser, accounting for 16% of the total exported volume.

The average export fob price fell by 8% month-on-month and by 19% less y-o-y to USD 1,523/tonne fob in May.

The Peruvian harvest has just started and exporters have sold out the 2020-21 crop. Peruvian trading sources revealed that the crop may rise by 30% year-on-year thanks to acreage expansion, after prices started to soar between November 2020-February 2021 due to a supply shortage.

Jul 01 - Global cloves market on the brink of major upward pricing pressure (IHSmarkit)

- Freight issues compound the difficulties.
- Indonesian crop severely reduced.
- Demand is very strong.

International cloves prices look set for substantial increases over the coming months on strong demand and diminished supply.
- Prices are already very firm and underlying upward pressure is also coming from the massive hikes in freight rates. Some more optimistic market commentators have predicted an improvement in the global freight situation in the final quarter of this year, but one European freight manager this week predicted a continuation of the difficulties for at least another two years.
- One of the knock on effects of the Covid-19 pandemic is that lockdowns have resulted in misplaced vessels and shortages of container ships along with the crews required to operate them.

On the supply side, Indonesia has suffered from very bad weather conditions, consisting mainly of successive months of heavy rains. This has both delayed its 2021 cloves crop and slashed its yields to a potential 50% of normal.
- Hence, Indonesia might end up with a crop of only around 50,000 tonnes. Harvesting runs from May/June in the west to September in the east.
- Comoros is starting its new crop now and this is expected to be normal. Zanzibar’s crop is then due in mid-July and is said to be of regular size.
- Madagascar’s next crop should start from September and run through to November and is projected to be a good one of possibly 12,000 tonnes.
- Brazil’s 2021 crop due in December is forecast to reach about 4,000 tonnes, which is not a particularly high volume for the South American country. Output will also depend on the price: if the price is favourable to farmers/collectors then more cloves will be gathered, if the price is too low, less volume will be taken. Based on the current dynamics, the former scenario looks likely.
- Sri Lanka’s next crop will then follow in early 2022. In the meantime, Sri Lanka is thought to be sold out from its 2021 crop, which was pegged in the range of 4,000-5,000 tonnes.

Emmanuel Nee of French trader Touton told IHS Markit he believes the world cloves market could be short by a possible 25,000-40,000 tonnes this year.
“This means that the balance cannot be compensated by any other crop in the world,” Nee remarked.
The expected production from all global origins is about 25,000 tonnes, he noted.
“In the middle of this, the rest of the world is not covered, and when I say the rest of the world I mean mainly India,” Nee explained.

Indonesia and India are the two biggest global consumers of cloves. India has been in a prolonged lockdown which is now showing signs of easing slowly. Touton anticipates a peak in India’s consumption of cloves by the end of the year or early 2022 when it is winter and the festival season start in India.
- Nee suggested that from July 2021 to June 2022 there will be continued hefty shortfall in supply versus demand, or in other words, demand will exceed the supply.
- The current level of global cloves stocks is thought to be about 15,000 tonnes, without Indonesian figures, and this will have run out by the end of January 2022, Nee predicted.

As a result, there will be a battle on to secure material ahead of this.
- Nee observed that the market has already started to increase quite sharply. Indonesian cloves at farmgate level are commanding levels of more than IDR110,000 (USD7.56) per kilo.
“The new season is just starting in Comoros and the market in Comoros has been increasing by 40%. That is only the beginning,” Nee said.
- Nee believes the market will be very volatile. “We still don’t know what will happen by November or December in Indonesia when their own crop is finished,” he added.
- Nee recalled that in 2001 and 2011 Indonesian cloves prices exceeded USD15,000/tonne. This 10-year cycle looks set to be repeated in 2021, although most likely not up to USD20,000/tonne, which was the case in 2001, he explained.

Indian buyers seem perfectly happy securing deals at USD 8,700-8,800/tonne cif currently, Nee added.
- He described current demand as “huge”. “Right now we are receiving demands from everywhere. We’re going from India, Europe, USA, even from Australia,” Nee said.
- Cloves consumption is relatively low in central Europe and the US but parts of eastern Europe, such as Russia, have become quite substantial users of cloves. In contrast, India and the Middle East are much more dependent on cloves as the spice is firmly entrenched in their culture.
India is said to currently have only enough stocks for two months consumption.

Freight issues

Nee warned that the global difficulties are made even worse by the escalating freight rates and shortages of vessels etc.
“Shipping from Indonesia is a nightmare,” he observed. “There are no containers and the freight rates are increased by three, four, five or six times. It is almost impossible to get a container and that will bring some issues. It is going to be even worse over the coming two years. This will make the shipments from Indonesia to anywhere in the world almost impossible.”
- CMA CGN announced on Tuesday that until further notice it is not accepting any bookings for east Africa, west Africa and the Indian ocean.
“It means they are not taking any cargo from Madagascar, Comoros, Zanzibar, Tanzania, Uganda, etc.” Nee explained.
- This leaves MSC and Maersk as the remaining main operators in Madagascar with free rein to hike the freight rates exorbitantly if they want.
“We can manage price increases but if we are mixing price increases with less shipment options then it will start to be a little bit difficult to work,” Nee warned.

Jul 01 - Daily Cocoa Futures Market Report

Forecasts of a good current crop in Ghana of around 1.1 million mt put the market under slight pressure in the morning. As in recent weeks, the Sep 21 found good support towards GBP 1600 (low GBP 1608). A firmer commodity environment also pulled the cocoa market up in the afternoon. The Sep 21 missed the previous day's highs by GBP 4 and ended the day GBP +10 at GBP 1634. At least the range of GBP 27 was reasonable, a sustained move through the long-term moving averages should provide fresh speculative buying interest. However, the "shorts" still hold the reins. New York marked the second inside day this week and ended the day almost unchanged at US$ 2389 / -1.

Jun 30 - Sri Lankan desiccated coconut exports rise strongly at lower prices Featured 29 Jun 2021 (IHSmarkit)

Volumes rose by 13% year-on-year to 11,870 tonnes and value rose by 54% to LKR7.2 billion (USD36.1 million) from January-May 2021, according to the Sri Lankan Coconut Development Authority (CDA).

The average fresh price closed at LKR52.9 per coconut on 26 June, 16% less than on 28 May.

Wholesale desiccated coconut prices ranged from LKR500-525 per kilo for fine on 26 June, 6% less month-on-month, and between LKR525-530/kg medium, 7% less.

Coconut milk exports totalled 21,420 tonnes, worth LKR8.1 bln, from January-May 2021, 47% more y-o-y in volume and 78% more in value. Meanwhile, coconut milk powder reached 2,950 tonnes, valued at LKR3.4 bln, 64% more.

Jun 30 - Vanilla prices recover thanks to industrial demand (IHSmarkit)

- Papua New Guinea’s crop forecast at 300 tonnes in 2021.
- Comoros’ prices led by Madagascar.

Demand for industrial-grade vanilla is recovering after Covid-19 starts to be controlled, cutting carry-over stocks, according to the Canadian processor Aust & Hatchmann (A&H) in its latest market update.

Madagascar’s prices fell to USD150 per kilo despite the minimum price of USD250/kg set by government. These irregularities have favoured sales of Papua New Guinea, Indonesia and Uganda, all of them considered as reliable origins.

The demand for Papua New Guinea’s black and gourmet vanilla is growing strongly. This origin is facing logistical challenges due to scarcity of sea and air freight services, favouring smuggling across the border shared with Indonesia. The domestic crop may exceed 300 tonnes in 2021.

Indonesia’s industry is transparent and free of government extreme controls, attracting international processors. Its prices are above USD150/kg paid for Madagascan beans.

Uganda’s output is expected to exceed 100 tonnes in 2021 thanks to government support after suffering several years with record-low prices.

Comoros’ production is expected to range from 35-50 tonnes. Its prices are led by Madagascar.

Conclusion

Vanilla’s industry is close to finding a balance between demand and supply and it may reach optimal prices in the long term. However, A&H concludes that a clear outlook is still far away as many small and mid-processors are still bending rules and labelling information about origins and composition, as US class action lawsuits reveal.

Jun 30 - Daily Cocoa Futures Market Report

As written in yesterday's report, yesterday held one or two surprises in store for us (for "reasons" we will spare ourselves any analogy to football). It took the London market only one afternoon to hit the upper end of the range that has lasted for a month now. With GBP 36 range, on admittedly manageable volume, it acted as a serene wake-up call. The Sep 21 traded at highs of GBP 1639, ending the day moderately with a GBP +10 gain at GBP 1624. The market gently approached the long-term moving averages (between GBP 1645 / GBP 1668), which should provide resistance.

Jun 30 - Colombia needs 2 more months to end delays in coffee exports

Colombian coffee exporters will need at least two more months to catch up with delays in coffee shipments caused by the May anti-government protests, the coffee growers federation FNC said on Tuesday. Roberto Velez, FNC's chief executive, told reporters that around 700,000 bags of coffee could not be shipped during the protests that blocked roads to ports, but he said the flow of goods has been normalized in the country, the world's second-largest producer of arabica coffee.

Jun 29 - Slight fall in Indian turmeric prices (IHSmarkit)

- 2% fall in spot prices.
- 8% fall in futures prices for deliveries between July-September.

The Indian spot fob turmeric price reached INR7,499 per quintal (USD103/quintal) at the Nizamabad market (Telangana state, South Central) on 25 June, 2% less than on 26 May.

The country’s global sales reached 24,790 tonnes, worth USD29.4 million, 10% more year-on-year in volume but 16.7% less in value.

The main importers were Bangladesh and the UAE, taking 23.5% and 9.2% of the total volume.

The updated daily futures market prices on NCDEX were:

    Deliveries in June 2021 closed at INR7,420/quintal on 18 June, 9% less than on 19 May.
    INR7,522/quintal for deliveries in July 2021 on 25 June, 8% less than on 26 May.
    INR7,628/quintal for deliveries in August 2021 on 25 June, 8% less.
    INR7,734/quintal for deliveries in September 2021 on 25 June, 8% less.
    INR7,840/quintal for deliveries in October 2021 on 25 June, 6% less.

Jun 29 - Daily Cocoa Futures Market Report

An eternal back and forth in the cocoa market, similar to last night's European Championship. However, there was much more tension in the games. The only difference is that the cocoa defence (GBP 1600 / Sep 21) seems to be in a much better position than that of one or two of the favourites. Sep 21 equalled the gains of the previous day and ended the day with GBP -4 at GBP 1614. Perhaps today holds a surprise for us...

Jun 29 - Frosts seen hurting Brazil corn; smaller risk for sugar cane, coffee

A strong polar air mass moving through the South and Southeast areas in Brazil this week will probably damage fields of corn, but the risk is smaller for problems in areas of sugar cane and coffee, analysts and weather centers said on Monday. There is forecast of frosts happening from Tuesday to Thursday in most regions in the state of Parana -- Brazil's 2nd largest grain producer -- in parts of Mato Grosso do Sul and in the southern part of Sao Paulo state, the country's number 1 sugar cane grower.

Jun 28 - Daily Cocoa Futures Market Report

Price hedging by the industry, as well as easing pressure from fresh speculative shorts, led to a corresponding countermovement on Friday compared to the previous day. The Sep 21 more than fully recovered and traded high at GBP 1627, closing GBP +13 at GBP 1618, back in the crippling range of recent weeks. Our cocoa market continues to lack momentum and we hope the calm continues to be deceptive. Commitment of Traders as of 22.06 show a further reduction of the net long position by 5,944 lots to a combined 27,656. Managed Money Specs reduced their position by 6,954 and now hold a short position of 13,962 lots in both markets combined.

Jun 25 - Market Briefing: Dried Fruit and Nuts (IHSmarkit)

- Argentine peanut crop expected to fall below estimated 1.3 mln tonnes.
- US almond shipments at record levels.
- US pecan kernel prices decline in first half of June.

Production

- Desiccated coconut production is still about four to six weeks behind in the Philippines. Many factories have chosen to focus on catching up on old orders instead of selling new positions.
- Argentina’s peanut harvest has halted after heavy snowfall and frost in northern Cordoba, the main origin, from 16-19 June. One third of the peanut crop remains unharvested. Industry sources estimate an output lower than the initial estimate of 1.3 million tonnes, although they think that average quality will be high.
- US peanut farmers had completed 96% of plantings as of June 20, just two percentage points behind the same stage a year ago. Peanuts have now entered the pegging stage, with 22% pegging versus 24% in 2020.
- Chile’s latest walnut crop has ended up at around 130,000 tonnes versus earlier expectations of 150,000 tonnes, but the quality is better than that of last year. However, suppliers still need to be aware of issues with yellow kernels.
- California plum trees bloomed successfully in San Joaquin and California valleys thanks to stable weather, granting a crop of 68,000 tonnes of prunes, 32% more year-on-year, according to the California Prune Board (CBP).
- The global supply of dried cranberry is expected to rise slightly this year with production forecast to reach 218,380 tonnes compared with 200,580 tonnes in 2020-21. Total supply (beginning stocks of 6,580 tonnes for 2021-22 plus the expected output total) is projected at 224,960 tonnes in 2021-22 versus 207,930 tonnes last season (when beginning stocks were at 7,330 tonnes).

Demand

- Demand for US and Australian almonds is seemingly unrelenting (see Trade below).
- Desiccated coconut is also attracting very keen buying interest.
- Chilean new crop walnuts are selling fast: by May 15, almost 80% of the total crop was already committed.
- As before, export data shows that demand for Turkish hazelnuts is lower this season. However, trade sources note that the volume of sales is improving each week.
- Demand for US raisins is relatively intact, according to the latest shipping data.

Trade

- US almond shipments in the first 10 months of the 2020-21 crop year (August 2020-May 31 2021) reached a record level of 2.448 billion pounds, more than in any full-year period.
- Australia’s almond shipments reached 5,530 kernel weight equivalence tonnes this April, 57% more year-on-year, bringing seasonal sales to 7,530 tonnes, 54% more. China and India were the main importers in April, taking 53% and 47%, respectively, of the total tonnage.
- The total quantity of Turkish shelled hazelnut exports between 1 September 2020 and 13 June 2021 was around 241,000 tonnes, 20.4% down from the volume of about 303,000 tonnes in the same period of the 2019-20 season.
- Global sales of US pecans were 8.4 million in-shell basis pounds this April, 15% less year-on-year, bringing seasonal (September-April) exports to 86.9 mln lbs, 18% more y-o-y.
- California raisin shipments fell by 14% year-on-year to 19,780 (short) tons this May, bringing seasonal sales (August 2020-May 2021) to 216,400 tons, 5% less y-o-y. The Californian Thompson supply is slowing, so European importers are watching Chilean Thompsons after rain reduced South African production.

Price

- Prices for desiccated coconut on the spot market are relatively flat despite zero availability in Europe and no stocks built up.
- Chile’s domestic Thompson price is peaking at USD2,200/tonne fob and exceeding by USD100-200/tonne the price for Flames, matching South African quotes.
- US pecan kernel prices fell to USD12,014/tonne in the first fortnight of June, down from USD12,320/tonne exw in May, according to IHS Markit. Piece prices were at USD8,200/tonne from 1-15 June, up from USD8,160/tonne in May.

Jun 25 - Market Briefing: Spices and Exotics (IHSmarkit)

- 5% fall in Indonesia’s nutmeg crop.
- EC to set EU limits on the amount of opium in poppy seeds.
- India’s government has launched a Minimum Support Price (MSP) for 2021/22 season sesame.

Production

- Indonesia’s 2021 nutmeg crop is expected to fall by 5% year-on-year to 37,000 tonnes due to heavy rains, according to trading sources.
- The 2020-21 (October-September) Ethiopian sesame seed crop is expected to fall by 9% year-on-year to 255,000 tonnes due to a cut in acreage, according to the USDA, as many farmers are switching to other products such as sorghum due to rising demand in food crops.
- The 2020-21 Indian spice crop is expected to reach 10.5 million tonnes, 4% more year-on-year, on 4.5 mln ha, 200,000 ha more, according to the Spices Board of India (SBI). SBI highlighted the following products:

    Coriander: 822,210 tonnes (17% more y-o-y), on 628,620 ha, (19% more).
    Garlic: 3.1 mln tonnes (+6.7%) on 385,200 ha (+9%).
    Chilli: 1.98 mln tonnes (+8%) on 732,200 ha (+17%).
    Cardamom (small and large): 31,320 tonnes on 113,890 ha (unchanged).
    Pepper: 65,000 tonnes (+7%) on 259,000 ha (unchanged).
    Turmeric: 1.1 mln tonnes (-78,000 tonnes) on 294,450 ha (-5,000 ha).
    Nutmeg: 15,000 tonnes (-600 tonnes) on 23,470 ha (750 ha less).

- Ukraine’s coriander output may total from 6,000-7,000 tonnes. Farmers expanding acreage thanks to rising prices after the Bulgarian crop suffered a sharp fall due to severe drought. Bulgaria’s crop may reach 5,000-6,000 tonnes, unchanged from 2020.

Demand

- India’s turmeric and chilli markets are impacted by lockdown, bringing consumption and sales to minimum levels.
- Indonesia’s cigarette manufacturers have launched aggressive offers for the new clove crop when Indian importers tried to replenish their stocks before lockdown between April-May.
- South African CBD manufacturer and processor Goodleaf has acquired Lesotho grower Canopy Growth Africa for ZAR650 million (USD47.5 mln) due to rising domestic demand for CBD products. As a result, the company will lead the CBD African market, with an investment capacity of ZAR350 mln.

Trade

- Ethiopia’s sesame seed exports reached 54,540 tonnes, worth USD82.9 million, 27% less year-on-year in volume and 30% less in value, in Q1 2021. Indian exports were 45,800 tonnes, worth USD72.7 million, in January-February 2021, 9% less year-on-year in volume and 22% less in value.
- The European Commission is to set EU limits on the amount of opium alkaloids allowed in poppy seeds sold to consumers as well as bakery products containing them. The implementing regulation would set a 20 milligrams per kilogram (mg/kg) limit on the sum of morphine and codeine in whole, ground, milled poppy seeds placed on the market for the final consumer.

Prices

- India’s new sesame seed (whitish) spot price was INR8,600 per quintal (USD118.5/quintal) at Unjha wholesale market (Gujarat, North East) on 16 June, 2% less than on 17 May. The Indian government has launched a Minimum Support Price (MSP) for sesame of INR7,307/quintal in the 2021-22 season, 7% more year-on-year, to secure farming costs.
- Madagascar vanilla bean prices remain officially set at the minimum export price of USD250 per kilo fob, although it is widely known that actual physical trading is taking place at much lower levels than this. Trade sources have cited regular deals being done in the range of USD150/kg fob or lower.

Forward view

- Brazilian, Indonesian and Malaysian pepper harvests will start in June and its shipments may push down prices.
- Bulgarian and Ukrainian coriander harvests will start between June-July, cutting prices for European oil processors
- European and US restrictions on Chinese chilli and paprika are set to favour rising prices for other origins such as Mexico, Peru, Spain and Israel. Importers will be very strict over trace data due to high prices.

Jun 25 - Market Briefing: Cocoa (IHSmarkit)

- Ghana’s cocoa output may exceed 1 million tonnes in 2020/21
- Global cocoa surplus seen between 165,000-191,000 tonnes
- Cocoa grinds expected to rise by 3% to 4.8 million tonnes

Production

- Ghana is headed for its biggest cocoa harvest in at least a decade. Reports suggest that its 2020/21 main crop was 965,493 tonnes as of June 3, above the government's projection of 850,000 tonnes and the ICCO's estimate of 950,000 tonnes. Ghana’s Cocoa Board now expects the crop to exceed 1 million tonnes for the first time since 2010/11. IHS Markit’s own estimate now also points to 970,000 tonnes, compared to a previous projection on 930,000 tonnes.
- The higher-than-expected output is also now seen widening a global surplus, with cocoa supply set to exceed demand by 165,000 tonnes in the 2020-2021 season, the ICCO said. IHS Markit now also pegs this season’s surplus at 191,000 tonnes, compared to its previous estimates of 178,000 tonnes.
- The ICCO’s forecast for global output was also raised by 181,000 tonnes, compared to its previous estimate, to an all-time peak of over 5 million tonnes. Top producer, Ivory Coast is expected to produce 2.2 million tonnes, while volumes for third largest grower, Ecuador, are seen at a record 340,000 tonnes for the 2020/21 season.

Demand

- The ICCO’s forecast for global cocoa grindings were also revised for the 2020/21 season, with volumes now expected to rise by 3% y/y to 4.8 million tonnes, recovering around 138,000 tonnes of the volume lost during the 2019/20 pandemic era. Increases are predicted for Asia and Oceania (up 5% to 1.1 million tonnes), the Americas (up 7% to 946,000 tonnes) and Africa (up 2% to 1.019 million tonnes). However, a decrease is expected for Europe (down almost 1% to 1.6 million tonnes). Cocoa grindings in importing countries are forecast to rise by 3% from 2.52 million tonnes in 2019/20 to 2.59 million tonnes in 2020/21. Meanwhile, origin grindings are forecast to rise by almost 3% in the current 2020/21 season, up by 63,000 tonnes to 2.2 million tonnes.

Trade

- Global exports of cocoa beans and semi-finished products surpassed two million tonnes during Q1 of the 2020/21 season, up slightly from the previous season’s 1.9 million tonnes. Of this total, 53% (1,074,891 tonnes) consisted of cocoa beans; 18% (369,265 tonnes) cocoa powder and cake; 17% (336,926 tonnes) cocoa butter; and 13% (259,360 tonnes) cocoa paste. Separately, exports of chocolate and chocolate products reached 1,663,032 tonnes October-December 2020, up slightly from 1,659,744 tonnes in the same period last season.
- Brazilian exports of cocoa and its by-products reached 6,005 tonnes in May, a rise of 14% y/y, Secex reported. In value, total cocoa exports translated into USD20 million in revenue, an 11% y/y increase. Separately, Brazil shipped 3,048 tonnes of chocolate in May and earned USD12 million.

Price

- Cocoa prices are still being weighed by abundant supplies with the New York futures contract hitting a seven-month low by June 25. September New York cocoa closed down USD25 to USD2,344, while September London slipped by GBP10 to GBP1,605; itself a 5½-month low. The rest of the month was peppered with multi-month/week lows confirming their bearish mode.
- Meanwhile, cocoa butter prices in May rose to 267 cents per pound, up 4.6 cents from April’s average, though this may be short-lived, according to IHS Markit. Powder prices remained stable at 95 cents per pound and the combined cocoa powder and butter ratio was little changed in May at 3.26. The grind margin was also stable at 28.4 cents per pound.

Jun 25 - Market Briefing: Coffee (IHSmarkit)

- World coffee production for 2021/22 is forecast down to 164.8 million 60-kg bags
- Ugandan coffee exports totalled 494,050 60-kg bags in May
- Vietnamese coffee exports in May reached 130,285 tonnes

Production

- World coffee production for 2021/22 is forecast down 11 million bags from the previous year to 164.8 million, due primarily to Brazil’s combined effect of arabica trees entering the off-year of the biennial production cycle and a weather-related shortfall, USDA said. As a result of lower output, global ending inventories are expected to drop 7.9 million bags to 32 million.
- USDA sees Brazil's 2021/22 crop at 56.3 million bags, down from 69.9 million in the previous season, while Rabobank raised its own estimate for to 72 million 60-kg bags from 67.5 million previously. Vietnam production is forecast to rebound 1.8 million bags to 30.8 million following last year’s dry growing conditions. Colombia’s arabica production is forecast 200,000 bags lower to 14.1 million although output remains strong on favourable growing conditions. Output from Central America and Mexico is forecast down by 400,000 bags to 17.4 million.

Demand

- Global coffee consumption is seen rising 1.8 million bags to 165.0 million, with the largest gains in the EU, the US, and Brazil. USDA also sees domestic demand rising to a record 23.7 million bags, which will drive exports down 9 million bags to 32 million. Ending stocks are projected to shrink to only 1.5 million bags.
- US green coffee stocks in port warehouses rose by 52,571 60-kg bags during May 2021 to reach 5,815,138 bags at the end of the month, according to the Green Coffee Association (GCA). Stocks were down 14.7% from the year-ago level of 6,818,120 bags.

Trade

- Ugandan coffee exports in May 2021 totalled 494,050 60-kg bags, below 537,538 bags in April but up from 437,597 in the same month last year, the state-run Uganda Coffee Development Authority (UCDA) said. This brought total coffee exports in the first eight months of 2020/21 to 3,892,141 bags, up from 3,370,526 a year ago.
- Brazil’s green coffee exports fell 20% in May 2021 y/y to around 2.3 million 60-kg bags, the lowest for that month since 2018, exporters association Cecafe said. Exports of arabica beans fell 16% to just over 2 million bags, while shipments of robusta even fell 40% to 287,627 bags.
- Vietnamese coffee exports in May reached 130,285 tonnes (around 2.1 million 60-kg bags), compared with 131,906 tonnes in April and 130,284 in May 2020, customs data showed.
- Members of the International Coffee Organisation (ICO) exported 11.4 million 60-kg bags of coffee in April 2021, up modestly from 11.2 million in the same month last year, ICO data showed.

Price

- Arabica futures have been easing off the 4½-year highs of 166.75 cents per pound touched on the first day of June, on the return of rains in top arabica producer Brazil and the resumption of coffee lows to ports in Colombia after previous strike-related disruptions. There has also been pressure from general weakness across commodities caused by a rallying US dollar as well as indications by the US Federal Reserve that it might raise interest rates at a faster pace than originally expected. By June 24’s closing, the benchmark September arabica coffee contract ended down 0.50 cents at 153.40 cents per pound, in dealings between 152.00 and 154.75 cents. December was also down 0.50 cents, at 156.25 cents, while the rest of the board shed 0.50-0.75 cents.
- In Vietnam, farmers in the Central Highlands sold beans at VND35,600 (USD1.55) per kg, unchanged from last week. Traders offered 5% black and broken-grade 2 at discounts of USD50-60 per tonne to the September contract, compared with last week’s USD30.

Jun 25 - Market Briefing: Sugar (IHSmarkit)

- Indian sugar mills produced 208,000 tonnes of sugar in the second half of May
- Brazil’s Centre/South produced nearly 10% more ethanol; 1.9 million cubic metres
- Chinese sugar imports in May reached 180,000 tonnes

Production

- India's sugar mills produced 208,000 tonnes of sugar in the second half of May, down from 445,000 in the first half and also below 473,000 tonnes in the same period a year ago, Indian Sugar Mills Association (ISMA) data showed. This brought total sugar production since the start of the 2020/21 season to over 30 million tonnes, up sharply from 27 million produced in the same period a year ago.
- Mills in Brazil's Centre/South region produced a record amount of sugar (43.2 million tonnes, +1.9% y/y) in the second half of May and nearly 10% more ethanol (1.9 million cubic metres) than a year ago, as dry weather allowed for a quick cane processing pace. However, Unica's latest crushing update also showed a nearly 10% reduction of the cane yield (79.1 tonnes per ha, -9.63% y/y) during May, due to drought. This brought total cane processing in the 2021/22 season so far to 129.6 million tonnes, which is still down 10.9% from 145.4 million in the same period last year.

Demand

- Domestic Indian consumption is expected to reach 26 million tonnes in the current 2020/21 season, up 2.8% y/y, according to ISMA. However, Shree Renuka Sugars, said India will likely consume nearly 5% less sugar in the 2020-22 period as a direct result of demand loss due to the Covid-19 pandemic. That translates into a 2.6 million tonnes loss of demand. In 2021/22, against the expected demand of 27.1 million tonnes, actual demand is likely to be 25.8 million tonnes, down by 1.4 million.
- Vietnam has imposed an anti-dumping duty of 47.6% on some sugar products from Thailand for five years to replace a temporary tax introduced in February. The anti-dumping showed that subsidised sugar shipments from Thailand surged 330.4% to 1.3 million tonnes in 2020.

Trade

- Chinese sugar imports in May 2021 reached 180,000 tonnes, unchanged from the previous month but down from 300,000 tonnes in the same month last year, customs data showed. This brought total sugar imports in the first eight months of 2020/21 to 4.1 million tonnes, up sharply from 1.8 million imported in the same period last year and the highest total ever imported during the first eight months of the season. This was the first time since July that China’s monthly imports were lower than in the same month last year after the phasing out of an additional import tariff in May 2020 led to significant year-over-year each month since then.
- The UK offered Australia tariff-free access within 15 years as new a FTA was completed this week. For sugar, this implies an eight-year transition period, during which Australia will have access to a duty-free quota of 80,000 tonnes, rising by 20,000 tonnes each year, before full tariff liberalisation as from year 9. In a heavily-protected sector like sugar, this is a concession which has the potential to influence global trading patterns quite substantially, especially as Australia currently exports virtually no sugar at all to the UK.

Price

- Sugar futures prices have been pressured in recent weeks amid ongoing concern over the effect of unprecedented dry weather on Brazil's 2021/22 crop. Raw sugar futures in New York fell to their lowest level in nearly two months on June 17, also amid a rallying US dollar and general weakness across equities and other commodities after the US Federal Reserve signalled it might raise interest rates at a faster pace than originally expected. The nearby contract for July delivery ended down 49 points, or 2.9%, at 16.55 cents per pound, which was only fractionally above a two-month low of 16.52 cents hit earlier in the session.
- White sugar futures in London also suffered sharp losses with the benchmark August contract falling by USD12.00 to settle at USD425.00 per tonne, in dealings between USD422.00 and USD434.90. Bearish sentiment has also pressured the August/July white sugar premium down as low as USD61.33 per tonne (June 16), the lowest since 23 December 2019.

Jun 25 - Daily Cocoa Futures Market Report

Finally, some may say...hedging pressure from the origin and lack of support from the industry, led to a breakout yesterday from the lethargy that has now lasted 4 weeks. The Sep 21 in LDN dared a brief look below GBP 1600 support at GBP 1598, ended the day at GBP -10 at GBP 1605. The other, more interesting dates for the industry in 2022, were much more inactive and closed between GBP -6 / Mar 22 and GBP -1 / Dec 22. Yesterday's movement was not entirely convincing, however, but perhaps we are seeing it too blackly and sometimes the glass is half full and not half empty after all.

Jun 24 - Daily Cocoa Futures Market Report

The weekly Ctrl+C /Ctrl+V. The front month continues to creep around GBP 1600 like the fox around the goose cage (close GBP 1595). The managed money section sits apathetically on the porch playing poker with no bets, "all-in" seems out of the question. In terms of lack of movement and ideas (range GBP 20 basis Sep21), cocoa was yesterday's model for the evening's disaster of the German national European Championship team. But the firm British pound put pressure on the market, so that the previous day's gain is now off the table again. Sep 21 closed 15 points in the red (GBP 1615). In the origin, there are more and more terrorist attacks by Islamist militias along the border between Côte d'Ivoire and Burkina Faso.

Jun 23 - China and India lead Australian almond sales (IHSmarkit)

- 57% increase in exports.
- China led sales, taking 42% of the total volume.

Australia’s almond shipments reached 5,530 kernel weight equivalence (KWE) tonnes this April, 57% more year-on-year, bringing seasonal sales to 7,530 tonnes, 54% more, according to the Almond Board of Australia (ABA).

In-shell exports doubled to 4,520 tonnes this April, bringing seasonal shipments to 5,380 tonnes, 85% more. China and India were the main importers in April, taking 53% and 47%, respectively of the total tonnage.
Shelled sales increased by 20% to 2,360 tonnes in April, bringing seasonal data to 3,660 tonnes (+31%). China was the main importer with 640 tonnes in April.
Indian and Chinese recovery and their booming imports are set to cut Australian carry-over stocks (5,000 tonnes), clarifying the 2021-22 scenario.
Australia is strengthening its role as the main almond supplier in both markets, enjoying a promising outlook thanks to China’s rising demand for kernels.

Jun 23 - China’s cinnamon export prices rise 60% y/o/y in May (IHSmarkit)

- Exports to main destinations went down significantly.
- Vietnam resilient as both volumes and export prices rose.

In January-May 2021, China exported 24,000 tonnes of cinnamon (uncrushed/ground), 19% down from the same time last year. In May, China’s average export price was USD5,200 per tonne, 60% up year-on-year from a year ago.

Main destinations saw sharp decreases by volumes from last year. Bangladesh (-41% year-on-year), Pakistan (-14% y/o/y), Saudi Arabia (-40% y/o/y), the UAE (-45% y/o/y) and Iran (-22% y/o/y).

China’s exports to Vietnam rose 11% y/o/y to USD 8,000/tonnes in January-May 2021, softening the fall from other countries.

In May, the export price to Vietnam was close to USD 9,000/tonne, 91% up y/o/y, and equivalent to USD33 million worth of cinnamon.
As a side note, Vietnam exports some crushed/ground cinnamon to about 80 destinations, with North America the largest market.
China sent about 640 tonnes of uncrushed/ground cinnamon to India in January-May 2021, 20% up y/o/y. In May, the export price was USD 2,600/tonne, a 20% increase y/o/y.

On crushed/ground cinnamon, China exported a total of 664 tonnes in January-May 2021, 49% up y/o/y. The average export price was USD 5,200/tonne in May.

Jun 23 - Disappointing Indonesian crop fuelling nutmeg prices (IHSmarkit)

- 5% fall in Indonesia’s production.
- 4% price increase for ABCD and SS varieties.

Indonesia’s 2021 crop is expected to fall by 5% year-on-year to 37,000 tonnes due to heavy rains, according to trading sources.
In addition, Covid-19 restrictions have slowed Indian nutmeg shipments.
As a result, Chinese importers are focused on importing Indonesian nutmeg and mace.
Indian prices are stagnant although a bullish scenario is expected in July. Meanwhile, Indonesian prices are gradually rising.
Dutch trader Nedspice quoted the following Indonesian nutmeg prices in the first fortnight of June:

    USD 9,600 per tonne fob for SS, 4% more month-on-month.
    USD 9,892/tonne fob for ABCD, 4% more.
    USD 6,338/tonne fob for BWP, 1% more.

Jun 23 - Daily Cocoa Futures Market Report

If anyone has wondered in recent years, what does a cocoa market with almost no speculative activity actually look like? Welcome to the current range! Has there perhaps been a change in exchange regulations and has a limit up / down been introduced without the knowledge of the market participants? (the very old hands among us will still remember this).  Both markets marked an inside day yesterday. Sep 21 London traded in its usual lethargy / range and ended the day, in fact, in double digits with GBP +10 at GBP 1630. On 30.06 the July 21 options expire, these could reduce open interest by about a third. Perhaps this will bring the longed-for wake-up call to the markets.

Jun 22 - Daily Cocoa Futures Market Report

Still dull from the hot weekend, London watched the market largely from the sidelines without generating any momentum of its own. The market's daily volume of 15k lots was significant. Although there was some firming soon after the opening and Sep21 ran to highs of GBP 1640, the relatively firm GBP and moderate origin selling kept ambition in check. Close Sep21 at GBP 1620 (-8). In the grading room, 39 SDUs IVC and 50 SDUs Nigeria passed. Despite these gradings, the Jul/Sep21 spread firmed slightly, with the magical GBP1600 holding in the front month of Jul21. Commitments of Traders show London neutral (86 lots net long), NY slightly short (-1.5k). Specs remain slightly short (-7k), of which Ldn -15k net /NY 8k long.

Jun 21 - Daily Cocoa Futures Market Report

A currency-related skirmish and a slightly weaker British pound pulled prices up slightly in the morning. The Sep 21 tested Monday's highs at GBP 1640, but did not break through. GBP 1640 has been with us as resistance since the beginning of the month. Hardly noticeable hedging pressure in the afternoon then led to an unchanged close from the previous day at GBP 1628 / Sep 21. Last week's range was a meagre GBP 28 and London ended the week with a weekly gain of GBP 6. Commitment of Traders as of 15.06 in London (NY follows today) show a reduction in the position of 2825 lots. London is now net +86 lots....

Jun 18 - Daily Cocoa Futures Market Report

Despite relatively high liquidity (26.6k lots), the London cocoa market was again spared any groundbreaking events yesterday. London ignored the calculated firm opening, preferring to avoid any movement in the summer heat and opened (guess what)...unchanged. The first month of July 21 continues to stoically wander around the 1600 GBP mark, and the second month of Sept 21 also shows itself unimaginative and feeble, almost like the German national football team at Euro2020. At the end of yesterday's match day, London found itself up 4 points (GBP 1628). In Côte d'Ivoire, there was much more going on: to a standing ovation, former president Laurent Gbagbo arrived in Abidjan after 10 years and greeted his supporters from the balcony of his former campaign headquarters.

Jun 18 - Market Briefing: Spices and Exotics (IHSmarkit)

- 9% fall in Ethiopian sesame crop.
- 17% increase in Indian coriander exports.
- Madagascar’s minimum export price for cured vanilla beans still USD250/kg fob.

Production

- The 2020-21 (October-September) Ethiopian sesame seed crop is expected to fall by 9% year-on-year to 255,000 tonnes due to a cut in acreage, according to the USDA, as many farmers are switching to other products such as sorghum. This follows rising demand for food crops after the Covid-19 pandemic restrictions hit grocery supply chains.
- The 2021 Madagascan vanilla crop may reach 2,000-2,200 tonnes of cured beans, according to trading sources.
- CBD of Denver, listed on the US OTC exchange, has started to build a factory at its Swiss headquarters. The plant will have a processing capacity of 24 tonnes of hemp annually.

Demand

- Indian demand for sesame is at minimum levels, forcing the government to increase the Minimum Support Price (MSP).
- Low prices for natural vanilla are favouring a gradual recovery in global consumption, offsetting rising purchases of vanillin by processors.

Trade

- Ethiopian sesame seed exports reached 54,540 tonnes, worth USD82.9 million, 27% less year-on-year in volume and 30% less in value, in Q1 2021 with fob prices stabilised between USD1,490-1,550/tonne despite consumption recovery.
- Indian sesame exports were 45,800 tonnes, worth USD72.7 million, in January-February 2021, 9% less year-on-year in volume and 22% less in value. The main importers were South Korea, the US, Russia and Taiwan, which took 26%, 10%, 6% and 5%, respectively, of the volume.
- Indian coriander seed exports increased by 17% year-on-year in volume to 8,390 tonnes and by 14% in value to USD10.0 mln in January-February 2021.

Prices

- The Madagascan government has fixed a minimum price of USD250/kgfob for cured beans and another of MGA75,000/kg (USD19.65/kg) for fresh. However, traders have been paying USD150/kg fob for cured beans, using Mauritius as a re-exporter for Madagascar’s vanilla. The Indonesian industry is selling fresh beans at USD17/kg and the Ugandan is offering cured beans at USD150/kg.
- India’s new sesame seed (whitish) spot price was INR8,600 per quintal (USD117.0/quintal) at Unjha wholesale market (Gujarat, North East) on 16 June, 2% less than on 17 May. Meanwhile, the Indian government has launched a Minimum Support Price (MSP) for sesame of INR7,307/quintal in the 2021-22 season, 7% more year-on-year, to secure farming costs when futures prices range from INR8,305-8,355/quintal.

Jun 18 - Market Briefing: Cocoa (IHSmarkit)

- Ghana’s 2020/21 main crop reached 965,493 tonnes as of June 3
- Brazil’s grindings for May were up 63% y/y and 14% m/m
- Ivory Coast’s arrivals surpassed two-million tonne mark

Production

- Ghana is headed for its biggest cocoa harvest in at least a decade. Reports suggest that its 2020/21 main crop was 965,493 tonnes as of June 3, above the government's projection of 850,000 tonnes and the ICCO's estimate of 950,000 tonnes. Ghana Cocoa Board also now expects the crop to exceed 1 million tonnes for the first time since 2010/11. IHS Markit’s own estimate now also points to 970,000 tonnes, compared to a previous projection on 930,000 tonnes.
- The higher-than-expected output is also now seen widening a global surplus, with cocoa supply set to exceed demand by 165,000 tonnes in the 2020-2021 season, the ICCO said in May. IHS Markit now also pegs this season’s surplus at 191,000 tonnes, compared to its previous estimates of 178,000 tonnes.
- Meanwhile, Ivory Coast’s cocoa arrivals surpassed the two-million tonne mark reaching 2.027 million tonnes between October 1 and June 13, up from 1.910 million tonnes in the same period last season.

Demand

- Brazil’s cocoa grindings for May showed a growth of 63% y/y and 14% m/m, to total 353,723 60-kilo bags (21,223 tonnes).
- A new survey from Cargill found that most US consumers have a daily chocolate intake with less than 3% avoiding chocolate. Dark chocolate was chosen by 52% of consumers, with nearly one in four perceiving chocolate that denotes cocoa bean origin country as being of higher quality.
- Meanwhile, another survey by the Germany confectionary industry (BDSI), outlined that approximately 65% of confectionery and snacks manufacturers do not expect Covid’s impact to end until 2022, and another 20% of companies not even before 2023.

Trade

Cumulative Brazilian cocoa imports climbed 514% y/y to 263,589 60-kilo bags (15,815 tonnes) by June 6, while on a weekly basis, volumes reached 39,250 tonnes, according to the Bahia Commercial Association.

Price

- New York cocoa closed at a six-week low by Wednesday (June 16), impacted by reports of Ghana’s bumper crop. July New York cocoa closed down USD26 to settle at USD2,347, while July London only slipped by GBP10 to GBP1,603 by closing.
- In Brazil, the strong US dollar prevented domestic prices from falling during the last week (to June 11) and remained flat. After starting the week at BRL189.00–193.00/15-kilo on June 7, it closed at BRL185.00–195.00 (USD2,408–2,538/tonne) on June 11.

Jun 18 - Market Briefing: Sugar (IHSmarkit)

- Mexican sugar production in the past week amounted to 11,344 tonnes
- Vietnam imposes anti-dumping duty of 47.64% on some Thai sugar products for five years
- Australia gains duty-free quota of 80,000 tonnes of sugar to the UK

Production

Mexico’s sugar cane crush is nearly complete with all but 1 out of 49 sugar mills having ended crushing operations for the 2020/21 season as of 12 June, official data showed. Sugar production in the past week amounted to 11,344 tonnes, down further from 19,244 a week earlier and compared with 39,179 tonnes in the corresponding week a year ago. This brought total sugar production so far in 2020/21 to 5,692,324 tonnes - 463,733 more than was produced by the same time a year ago. As previously projected sugar output this season will reach only about 5.7 million tonnes, below a CONADESUCA forecast for 5.8 million and compared with 5.2 million a year ago.

Demand

Vietnam has imposed an anti-dumping duty of 47.64% on some sugar products from Thailand for five years to replace a temporary tax introduced in February. The decision comes after the ministry finished an anti-dumping investigation that started last September on behalf of the domestic sugar industry. The probe showed that subsidised sugar shipments from Thailand surged 330.4% to 1.3 million tonnes in 2020 and the imports were undermining the domestic sugar industry, the ministry said in a statement. Previously the industry imposed a temporary 33.88% levy on Thai sugar in February.

Trade

The UK offered Australia tariff-free access within 15 years as new a FTA was completed this week. For sugar, this implies an eight-year transition period, during which Australia will have access to a duty-free quota of 80,000 tonnes, rising by 20,000 tonnes each year, before full tariff liberalisation as from year 9. In a heavily-protected sector like sugar, this is a concession which has the potential to influence global trading patterns quite substantially, especially as Australia currently exports virtually no sugar at all to the UK.

Price

White sugar futures in London suffered further losses by Wednesday (June 16), pressuring the August/July white sugar premium down as low as USD61.33 per tonne, the lowest since 23 December 2019. The benchmark August white sugar contract ended down USD3.80 at USD437.00 per tonne, in dealings between USD433.80 and USD445.60. Second-month October shed USD2.10 to USD447.30 per tonne and the rest of the board ended between USD1.00 down and USD1.70 up. Trading volume rose somewhat to 11,057 lots from 10,843 in the previous session.

Jun 18 - Market Briefing: Coffee (IHSmarkit)

- US green coffee stocks in port warehouses rose by 52,571 60-kg bags during May
- Ugandan coffee exports in May 2021 totalled 494,050 60-kg bags
- Brazil’s green coffee exports fell 20% in May

Production

In Brazil, coffee harvesting activities are most advanced in Zona da Mata, where between 10 and 20% were harvested until last week. In some areas, precipitation interrupted harvesting, mainly in northwestern Paraná and in Garça. The weather supported harvesting of robusta crops. In Espírito Santo, Cepea progress stood at 50-60%. In Rondônia, that percentage is between 65 and 75%. Although activities have progressed, the amount of coffee currently arriving in the market is low. Many farmers focus on delivering the product previously purchased and are waiting for higher prices, following the off-year in the arabica cycle and high demand for robusta this year.

Demand

US green coffee stocks in port warehouses rose by 52,571 60-kg bags during May 2021 to reach 5,815,138 bags at the end of the month, according to the Green Coffee Association (GCA). Stocks were down 14.7% from the year-ago level of 6,818,120 bags.

Trade

- Ugandan coffee exports in May 2021 totalled 494,050 60-kg bags, below 537,538 bags in April but up from 437,597 in the same month last year, the state-run Uganda Coffee Development Authority (UCDA) said. The May shipments were below UCDA’s projection of 540,000 bags. This brought total coffee exports in the first eight months of 2020/21 to 3,892,141 bags, up from 3,370,526 a year ago. Robusta exports were up 27.0% at 3,403,506 bags, while arabica shipments dropped 29.3% to 488,635.
- Brazil’s green coffee exports fell 20% in May 2021 y/y to around 2.3 million 60-kg bags, the lowest for that month since 2018, exporters association Cecafe said. An ongoing shortage of containers, as well as limited space in vessels, have prevented the country from shipping a higher coffee volume. Exports of arabica beans fell 16% to 2.053 million bags, while shipments of robusta even fell 40% to 287,627 bags.

Price

Arabica coffee futures posted gains by Wednesday (June 16) but remained some way off recent highs, with much-needed rains in Brazil pressuring prices. Coffee has been easing off a 4½-year high hit earlier this month with the return of rains in the world’s top producer and exporter. Banking house Citi said that it remains bullish on arabica longer-term, seeing prices averaging USD1.65 in the fourth quarter as the drought-like conditions in Brazil have already damaged the current and next season’s crop. The benchmark September contract settled up 2.20 cents at 155.45 cents per pound, in dealings between 153.35 and 156.35 cents.

Jun 17 - Daily Cocoa Futures Market Report

The cocoa market does not seem to have a plan at the moment, except to slowly wear us down and make us sleepy with the continued sideways movement and even less volume. At least it went down again a little yesterday. The Sep 21 found (SURPRISE) support towards GBP 1600 / low yesterday GBP 1612 and ended the day GBP -8 at GBP 1624. We remain optimistic and a breakout could be in the air. Fundamentally, there was also little news. The ongoing shipping crisis and massive backlog (especially in Asia and the US), as a result of scarce containers & ships, is starting to hit cocoa. After the freight rates on the Asian routes have quadrupled in some cases, those from West Africa are now also picking up. It is important to overcome the crisis in order to clear the way for the new main harvest from October.

Jun 16 - Daily Cocoa Futures Market Report

Like a train, the cocoa market has been unswervingly maintaining its recurring schedule for weeks now, with the odd delay and also correction in the timetable and sometimes more, sometimes fewer passengers on board. Yesterday, for example, only 14k lots were traded, in a pitiful GBP 13 range in the second "wagon" Sep 21, which in the evening (like the other contracts) closed almost unchanged at GBP -4 (GBP 1632). Final stop, all off. The grading room at the main station was busier: 61 of 62 SDU passed grading, 21 of which were re-graded IVC, the rest fresh Guinea beans. From Côte d'Ivoire, the political highlight of the hour is President Ouattara's decision to officially welcome his eternal adversary and ex-president Laurent Gbagbo to the presidential palace upon his return home tomorrow. This means that Gbagbo's triumphant return, which was actually hoped for by his camp, will probably not happen.

Jun 15 - Daily Cocoa Futures Market Report

After the significant reduction of the net long position (almost 16k lots) and the selling frenzy of the specs in the last few weeks, one could have hoped for a significant reaction of the markets. London, due to a slightly weaker British pound, gained a little and reached 2-week highs at GBP 1640. Sep 21 ended the day GBP +14 at GBP 1636. The LDN / NY arbitrage widened, compared to Friday, by GBP 15 to a discount of GBP -97 / Sep 21. Côte d'Ivoire arrivals as of 13.06 are at 2.027m mt vs 1.910m mt from 19/20 (+6.1%). Cocoa still seems to be the "anti-commodity" in the markets. The general weakness of the other commodities (coffee & sugar partly -3%) was, once again, completely ignored.

Jun 15 - Abundant rains return in Ivory Coast cocoa regions

Above average rainfall was recorded in Ivory Coast's cocoa growing regions last week, raising expectations for a strong finish of the April-to-September mid-crop cocoa harvest, farmers said on Monday. Ivory Coast, the world's top cocoa grower, is in the middle of its March-to-November rainy season when downpours are abundant. Farmers need a mix of heavy rainfall and sunny spells to grow cocoa.

Jun 14 - Daily Cocoa Futures Market Report

A weaker British pound, which had come under pressure due to the tense G7 talks about trade with Northern Ireland, gave prices in London some upward momentum after the opening. However, the opening in NY led to selling pressure in both markets, which London could not counter. Why should it? We already talked about impulses, which are nowhere in sight. But these are needed to finally break out of the corridor 1600/1700 and end the current indecision. Closing price Sep 21 unchanged at GBP 1622. The specs in London give it a try with a further expansion of the short position by 10k to now -13k lots; NY still 9k long. The total net long position reduced by almost 16k lots to now 38k lots (NY+Ldn).

Jan 14 - Brazil coffee exports fall 20% in May amid container shortage 

Green coffee exports from Brazil, the world's largest producer, fell 20% in May from the same month a year ago to 2.34 million 60-kg bags, exporters association Cecafe said on Friday, citing logistic issues as one of the reasons for the reduction. Cecafe said that an ongoing shortage of containers, as well as limited space in vessels, have prevented the country from shipping a higher coffee volume abroad last month.

Jun 11 - Market Briefing: Cocoa (IHSmarkit)

- Brazilian cocoa arrivals reached 155,919 60-kilo bags, up 93% y/y
- Ivory Coast sells 950,000 tonnes of cocoa at a discount
- Global exports of cocoa beans and semi-finished products surpass two million tonnes in Q1 of 2020/21 season

Production

Weekly Brazilian cocoa arrivals reached 155,919 60-kilo bags (11,814 tonnes) in the week ending May 30, a 93% y/y increase and a 21% rise compared to the previous week, according to Bahia Commercial Association. Cocoa weekly deliveries in the state of Bahia closed May at the highest level seen for this time of year, at 111,960 60-kilo bags (6,718 tonnes), up 13% w/w and 300% y/y, favoured by the return of rainfall. For the state of Pará, weekly delivered volumes also rose to 42,146 60-kilo bags (2,529 tonnes), up 51% w/w.

Ghana’s graded and sealed (G&S) cocoa arrivals had reached 924,385 tonnes by May 27 since the start of the season on October 1, up from 737,783 tonnes the previous season, figures from the marketing board Cocobod showed.

Demand

Ivory Coast had sold 950,000 tonnes of cocoa in contracts by the end of May for the 2021/2022 season at a country discount instead of its usual country premium. Agreed contracts had a country discount of GBP150-200 per tonne, a move that would effectively mean farmers still received extra cash but the government revenues from sales were reduced. Ivory Coast typically sells cocoa with a country premium of GBP70-150 (USD99-212) per tonne to reflect its quality. Since last year, it also added a USD400 per tonne premium to be paid to farmers to boost their wages.

Meanwhile, the country’s cocoa grinders processed 367,000 tonnes of beans by the end of May, down from 377,000 tonnes over the same period last season, data from exporters’ association GEPEX showed.

Trade

Global exports of cocoa beans and semi-finished products surpassed two million tonnes during Q1 of the 2020/21 season, up slightly from the previous season’s 1.9 million tonnes. Of this total, 53% (1,074,891 tonnes) consisted of cocoa beans; 18% (369,265 tonnes) cocoa powder and cake; 17% (336,926 tonnes) cocoa butter; and 13% (259,360 tonnes) cocoa paste. Separately, exports of chocolate and it chocolate products reached 1,663,032 tonnes October-December 2020, up slightly from 1,659,744 tonnes the same period last season.

Price

Cocoa butter prices in May rose to 267 cents per pound, up 4.6 cents from April’s average, though this may be short-lived, according to IHS Markit. Powder prices remained stable at 95 cents per pound and the combined cocoa powder and butter ratio was little changed in May at 3.26. The grind margin was also stable at 28.4 cents per pound.

>Jun 11 - Market Briefing: Dried Fruit and Nuts (IHSmarkit)

- 34% fall in global prune crop.
- Gradual recovery in Australian macadamia sales.
- 7% increase in pistachio consumption.

Production

The global cashew crop may fall by 100,000 tonnes year-on-year to 3.72 million tonnes in the 2021-22 season. India’s crop may be unchanged y-o-y at 690,000 tonnes; Ivory Coast, the largest grower, and Vietnam may fall by 6% and 11%, respectively, to 690,000 tonnes and 400,000 tonnes. Other large origins such as Tanzania, Guinea-Bissau or Benin are unlikely to grow as they have halted their acreage expansion. Cambodia is the only origin which expects a notable rise: 250,000 tonnes in the 2021-22 season, 31% more.

The global prune crop has fallen by 34% year-on-year to 140,000 tonnes in the 2020-21, season due to low production in California (53,000 tonnes, a third less y-o-y), Chile (35,000 tonnes, -45%), Argentina (12,000 tonnes, a third less) and France (33,000 tonnes, -12%) in the 2020-21 season. 

Demand

Total world pistachio consumption is expected to be about 60,000 tonnes more y-o-y to 914,550 tonnes in 2021-22 season, a rise of around 7%.

Demand for macadamias is gradually recovering after suffering a sharp fall in 2020 due to the Covid-19 pandemic. Sales of Australian kernels increased by 1% year-on-year between March 2020-February 2021, according to the Australian Macadamia Association.

Trade

Despite India’s massive 120% import duty on US walnuts, shipments to the Asian country in the 2020-21 season to the end of April surged to 18,860 in-shell tonnes from 9,800 tonnes in the same period of the 2019-20 season. The US was well placed to ship for Ramadan demand this year and sales to the Middle East and Africa reached 122,880 tonnes for the year-to-date period versus 90,015 tonnes in the same period a year ago.

Price

Vietnamese cashew prices were USD3.45-3.50/lb fob for W240s for shipments between June-September, according to trading sources. Broken grades such as WS, LP, and SP are in lower supply this year but drawing strong demand so prices on these are being kept high.

Chilean prune prices have peaked at USD3.00 per kilo fob since May, after having been stable at USD2.00/kg in previous years.

Jun 11 - Market Briefing: Sugar (IHSmarkit)

- Brazil's Centre/South produced a record 43.2 million tonnes of sugar, +1.9% y/y
- Domestic Indian consumption expected to reach 26 million tonnes in 2020/21 season, + 2.8% y/y
- USDA reduced re-export imports for 2020/21 by 50,000 tons to 250,000 short tons

Production

Sugar mills in Brazil's Centre/South region produced a record amount of sugar (43.2 million tonnes, +1.9% y/y) in the second half of May and nearly 10% more ethanol (1.9 million cubic metres) than a year ago, as dry weather allowed for a quick cane processing pace. However, Unica's latest crushing update also showed a nearly 10% reduction of the cane yield (79.16 tonnes per ha, -9.63% y/y) during May, due to drought. This brought total cane processing in the 2021/22 season so far to 129.6 million tonnes, which is still down 10.9% from 145.46 million in the same period last year.

Demand

Domestic Indian consumption is expected to reach 26 million tonnes in the current 2020/21 season, up 2.8% y/y, according to ISMA. However, Shree Renuka Sugars, said India will likely consume nearly 5% less sugar in the 2020-22 period as a direct result of demand loss due to the Covid-19 pandemic. That translates into a 2.6 million tonnes loss of demand. Against an expected consumption of 26.1 million tonnes in 2019/20, India consumed 25.3 million tonnes of sugar, down 3%. Similarly, in 2020/21, against an expected consumption of 26.6 million tonnes, actual demand stood at 25.4 million tonnes, down 1.2 million. In 2021/22, against the expected demand of 27.1 million tonnes, actual demand is likely to be 25.8 million tonnes, down by 1.4 million.

Trade

- In the latest WASDE, USDA reduced re-export imports for 2020/21 by 50,000 tons to 250,000 short tons, raw value, based on the pace to date.
- The EU imported 6,880 tonnes of raw sugar at an average cif price of EUR578 per tonne from ACP countries in March, compared with 9,463 tonnes imported at EUR599 per tonne in March 2020.
- Indian sugar mills are looking to export an additional one million tonnes of sugar in 2020/21, about 18% more than last year’s 5.95 million tonnes, due to high international prices. The current export quota is 6.0 million tonnes.

Price

Raw sugar futures in New York ended lower by Thursday (June 10) in the two most-actively traded months and higher in the deferred contracts as the market digested a crushing update from Brazil's Centre/South region. The benchmark contract for July delivery ended down 7 points at 17.66 cents per pound, in wide dealings between 17.58 and 17.84 cents. Second-month October shed 2 points to 17.73 cents per pound, while the rest of the board ended up between 2 and 19 points.

Jun 11 - Market Briefing: Coffee (IHSmarkit)
- Brazil’s coffee growers harvested 20% of the 2021/22 crop by May 25
- Vietnamese coffee exports in May reached 130,285 tonnes
- ICO exported 11.4 million 60-kg bags in April

Production

Brazil’s coffee growers harvested 20% of the 2021/22 crop by May 25, a slower pace than the 23% a year ago and below the five-year average of 23% for this time of year, but the first lots showed good quality, local consultancy Safras & Mercado said. It projects a crop of 56.5 million 60-kg bags this year. Brazil’s coffee ending stocks are set to reach 2.4 million bags in 2021/22, a reduction of 57% compared to the previous season, even with exports falling by 18% to 38.3 million bags in 2021/22. Brazil is the second-largest consumer of coffee in the world after the US, and Safras expects the stocks to use ratio in the country to drop dramatically to 12% in the current season, from 27% in 2020/21.

Demand

Brokerage Marex Spectron estimates that the pandemic-related collapse in global demand for coffee reached 6 million 60-kg bags in two seasons, with a stronger impact on softer arabica coffee, which is widely used by coffee chains. The company, expects demand growth of 3.75% in 2021/22, as more people return to offices and cafeterias following the Covid-19 pandemic.

Trade

- Vietnamese coffee exports in May reached 130,285 tonnes (around 2.1 million 60-kg bags), compared with 131,906 tonnes in April and 130,284 in May 2020, customs data showed.
- Colombia exported only 427,000 60-kg bags of arabica coffee in May 2021, down 52% from 894,000 bags in the same month last year, the National Federation of Coffee Growers (Fedecafe) reported.
- Members of the International Coffee Organisation (ICO) exported 11.4 million 60-kg bags of coffee in April 2021, up modestly from 11.2 million in the same month last year, ICO data showed.

Price

Arabica coffee futures closed higher by Thursday (June 10) as the market recovered somewhat after weakness early in the week. The benchmark July arabica contract settled up 1.50 cents at 158.70 cents per pound, in dealings between 156.65 and 159.30 cents. September was up 1.50 cents as well, at 160.80 cents. The rest of the board gained 1.45-1.60 cents.

Vietnam’s Central Highlands sold beans at VND33,500-35,000 (USD1=VND22,928.3) per kg, compared with VND34,200-35,300 last week. Traders offered 5% black and broken-grade 2 robusta at discounts of USD20-30 per tonne to the September contract, compared with last week’s discount of USD40.
 

 

Jun 11 - Daily Cocoa Futures Market Report

A mirror image of the previous day, at least almost. Initial firming, among others by short-coverings of the managed money sector, led to daily highs of GBP 1632 basis Sept 21. But as currently usual, price hedge sales of the industry against new coverings from the origin ensured headwinds. So once again it looked like an un-changed close. However, a final rebound brought renewed support and the Sep 21 closed 13 points higher at GBP 1622. The front spreads were slightly under pressure this time, which is probably also due to the managed money faction. The otherwise flat structure continues to wait for new impulses. They will certainly come, the only question is when? And where from?


Jun 11 - Uganda Ramps Up Coffee Production to Reach Record High (WSJ)
Uganda's coffee output is trending higher, as newly planted coffee farmlands enter the production phase, aiding Africa's top exporter to reach record output, says the country's finance ministry. Coffee production jumped nearly 60% to hit 8.1 million 60-kilogram bags in the 2020-21 fiscal year from a year earlier, aided by maturing
plantations and favorable weather conditions. The onset of the coronavirus pandemic last year induced job losses and closure of small businesses, forcing many people to return to agriculture. But the World Bank warns that the shift is adding more pressure on Uganda's natural resources, already strained by rapid population growth, urbanization and a refugee influx.


Jun 10 - Daily Cocoa Futures Market Report

Closing price Sep 21 Tuesday: GBP +3 / GBP 1613 / range GBP 1606 - 1622.
Closing price Sep 21 Wednesday: GBP -4 / GBP 1609 / range GBP 1606 - 1620.
Other highlights? None.
The longs & shorts from the speculative side alternate in a daily rhythm this week, without a clear trend at the moment.
Hardly any news from origin which could set fresh impulses, see market movement the day before yesterday after the announcement of the "big" pre-sales, here the market did not really react. Silly season in cocoa, the calm could be deceptive...


Jun 09 - Daily Cocoa Futures Market Report

For much of yesterday's trading session, the market came under slight pressure and, with a low at GBP 1606/Sep 21, gradually made its way towards GBP 1600 support. Industry price cover at these levels allowed the market to recover slightly in the afternoon and Sep 21 ended the day at GBP +3 at GBP 1613. The Sep / Dec 21 spread marked a new low at GBP -55. The CCC reported forward-sales for 21/22 at the end of May at 950,000mt (independent estimates were around 650k mt). However, about 40% of this has not yet been confirmed with a final price, among other things because there is still disagreement with the processors about the corresponding discount. This leaves a lot of room for interpretation (value-free assessment). 

Jun 09 - Ivory Coast to Double Rubber Output by 2025 (DJ) 

   The government of Ivory Coast, Africa's leading rubber producer, has said it will double the country's rubber production in the next four years.
  "Ivory Coast is investing to double its rubber production by 2025," Prime Minister Patrick Achi said Tuesday at the World Rubber Summit.
  In the last three years, Ivory Coast has faced delays in processing the huge volumes of rubber produced in the country.
  "As a result, the government of Ivory Coast has set itself the objective of supporting the processing of 400,000 tons of natural rubber and improving producer income by 2025," said the country's minister of state for agriculture and rural development Kobenan Kouassi Adjoumani.
  Ivory Coast produces 80% of Africa's rubber, with a harvest of 950,000 metric tons in 2020.

Jun 08 - Daily Cocoa Futures Market Report

The market started the new week with the lowest close of the second month since early May. Sep 21 ran to lows of GBP 1607 and closed slightly above with a loss of GBP 17 at GBP 1610. The Sep21/Dec21 spread widened further (GBP -47) putting pressure on the structure in the front months. The ongoing problems with IVC's power supply are reflected in the origin grinds, which declined by almost 25% in May. Reuters reports a lack of rainfall and an endangered IVC mid crop, while another source only an hour later proclaims "abundant rainfall and best crop prospects"... well, arrivals as of last week are now 7.6% above last year.


Jun 08 - Ivory Coast's cocoa mid-crop threatened as dry spell drags on 

An unusual dry spell persisted across most of Ivory Coast's cocoa-growing regions last week, fuelling farmers' fears that the April-to-September mid-crop could be depleted.  Ivory Coast, the world's biggest cocoa producer, is in its rainy season, which runs from April to mid-November. But the heavy downpours typical of the season have been absent for more than a month.

Jun 07 - Daily Cocoa Futures Market Report

If the market reached new 4-week lows of GBP 1612 / Sep 21 in the morning, this was only a short break out of last week's sideways movement. A mixture of fresh shorts and a little price hedging by the industry alternated in the afternoon. Closing price Sep 21 unchanged from previous day at GBP 1627. Commitment of Traders as of 01.06 show an increase in combined net long position from 3,162 lots to 53,817 lots net long. Managed money liquidated (mainly new shorts) 2,908 lots and combined with 8,288 lots is now only slightly on the long side.

Jun 07 - ICO coffee price indicator rises to highest since Feb 2017
The coffee price composite indicator from the International Coffee Organization (ICO) rose 10.4% in May to 134.78 cents per pound, the highest level since February 2017, the ICO said in a monthly market report on Friday. "A firm upward trend of coffee prices over the first eight months of coffee year 2020/21 seems to confirm a net recovery from the low price levels that began in coffee year 2017/18," said the organization.

Jun 04 - Market Briefing: Spices and Exotics (IHSmarkit)

- 0% increase in Peruvian ginger crop.
- CBD processor acquires grower to lead the South African market.
- 80% growth in Guatemalan cardamom exports.

Production

The Peruvian ginger crop may rise by 30% year-on-year to 80,000 tonnes thanks to acreage expansion, after prices started to soar between November 2020-February 2021, due to a supply shortage.

Around a third of Bulgarian rose plantations may be unharvested due to extremely low prices paid by essential oil processors, according to Bulgaria’s farming associations. As a result, the rose petal crop may fall by 40% year-on-year to 10,000 tonnes in 2021.

Agri Resources is set to open an essential oil plant with a total annual capacity of 5,000 litres in Madagascar. The factory will produce organic certified patchouli, ginger, turmeric, cinnamon, citrus leaves and pepper oil.

Demand

Covid-19 restrictions are weakening Indian spice consumption, halting domestic trade and stabilising prices after a strong price recovery in Q2, as commercialised turmeric and chilli data reveals.

African demand for CBD products is booming, granting the acquisition of the grower Canopy Growth Africa, located in Lesotho, by the South African processor and retailer Goodleaf.

Trade

Vietnamese and Brazilian pepper exports are under way. Vietnamese exports fell by 20% in volume year-on-year to 93,550 tonnes although revenue rose by 15% to USD284.0 million, in January-April 2021.

Brazilian international sales fell by 2% y-o-y in volume to 32,450 tonnes and by 32% in value to USD84.4 mln. 

Guatemala’s cardamom exports reached 18,000 tonnes, worth USD382.2 million, in Q1 2021, 80% more year-on-year in volume and 26% more in value in Q1 2021.

Peruvian ginger exports rose by 27% year-on-year in volume to 11,260 tonnes and by 47% in value to USD38.3 mln in January-April 2021, after reaching record international sales of 51,120 tonnes, worth USD107.1 mln, in 2020.

Prices

Weekly Indian wholesale chilli prices fell between 6-9% month-on-month to INR113-150 per kilo (USD1.55-2.05/kg) in the last week of May.

The Indian spot fob turmeric price closed in May at INR7,603 per quintal (USD103/quintal) at the Nizamabad market (Telangana state, South Central) on 31 May, unchanged from 3 May, despite weak demand due to lockdowns. 
The average farmgate price for oil petals paid by Bulgarian oil processors is BGN1.6 per kilo (USD1/kg).

Jun 04 - Market Briefing: Cocoa (IHSmarkit)

- Global cocoa supplies for 2020/21 estimated at 165,000-tonne surplus
- Global output seen at all-time peak of over 5 million tonnes
- Global grindings expected to rise by 3% y/y to 4.8 million tonnes

Production

Global cocoa supplies for 2020/21 are estimated at a 165,000-tonne surplus, owed to an expected historical production record, according to the ICCO. Its forecast for global output was raised by 181,000 tonnes, compared to its previous estimate, to an all-time peak of 5.024 million tonnes. Top producer, Ivory Coast is expected to produce 2.2 million tonnes, while volumes for third largest grower, Ecuador, are seen at a record 340,000 tonnes for the 2020/21 season. Ghana’s production is anticipated to increase by 19% y/y to 950,000 tonnes, while the ICCO expects Brazil’s to drop to 180,000 tonnes. Indonesia’s cocoa output is forecast at 200,000 tonnes for the season under review.

Demand


The ICCO also revised its global grindings forecast for the 2020/21 season, with volumes now expected to rise by 3% y/y to 4.8 million tonnes, recovering around 138,000 tonnes of the volume lost during the 2019/20 pandemic era. Increases are predicted for Asia and Oceania (up 5% to 1.1 million tonnes), the Americas (up 7% to 946,000 tonnes) and Africa (up 2% to 1.019 million tonnes). However, a decrease is expected for Europe (down almost 1% to 1.6 million tonnes). Cocoa grindings in importing countries are forecast to rise by 3% from 2.521 million tonnes in 2019/20 to 2.596 million tonnes in 2020/21. Meanwhile, origin grindings are forecast to rise by almost 3% in the current 2020/21 season, up by 63,000 tonnes to 2.2 million tonnes.

Trade

Brazilian exports of cocoa and its by-products slipped by 13% y/y in volume and 14% y/y in revenue in April, to 4,480 tonnes and USD15 million, according to Secex. This was driven by Bahian exports falling 15% y/y in volume and value, to 4,345 tonnes and USD14 million. Brazil’s chocolate exports in April stood at 2,335 tonnes and USD7 million. Looking at 2020 overall, cocoa and by-product exports totalled 63,520 tonnes and USD206 million, virtually unchanged compared to 2019. Chocolate shipments alone grew by 7% y/y for exports to 28,851 tonnes.

Price

Cocoa prices were mixed over the last seven days, as they tried to consolidate above last week’s three-week lows. New York cocoa hit a one-week high on Tuesday (June 1), closing moderately higher at USD2,431. However, gains were limited following the ICCO’s revised estimates. By Wednesday (June 2), London cocoa posted a three-week low, with the July contract settling GBP14 lower to GBP1,609.

Jun 04 - Market Briefing: Sugar (IHSmarkit)

- India produced 208,000 tonnes of sugar in the second half of May
- Brazil exported 2,697,844 tonnes of sugar in May
- Ukraine proposes duty-free sugar import quota of 120,000 tonnes until October

Production

India's sugar mills produced 208,000 tonnes of sugar, white value, in the second half of May, down from 445,000 in the first half and also below 473,000 tonnes in the same period a year ago, Indian Sugar Mills Association (ISMA) data showed. This brought total sugar production since the start of the 2020/21 season in October to 30.5 million tonnes, up sharply from 27 million produced in the same period a year ago. There were only 7 sugar mills (out of some 500) still in operation which compares with 18 at the same time last year.

Demand

The lowest price offered in the state-run Trading Corporation of Pakistan's (TCP) international tender to buy 50,000 tonnes of white sugar, is reported to be USD533.90 per tonne c&f from Dubai-based Al Khaleej Sugar. Traders indicated that other offers submitted in the tender were USD564.90 by Sucden, USD550.00 by Louis Dreyfus and USD542.90 by Wilmar International. A series of import tenders have been issued by the TCP in recent months. In its last sugar tender reported on May 1, Pakistan bought 50,000 tonnes at an estimated USD447 per tonne c&f, although most tender participants had offered over USD550 per tonne c&f.

Ukraine has proposed a duty-free sugar import quota of 120,000 tonnes until October in order to stabilise the situation in the domestic market. The government approved the corresponding draft law at on June 2 which specifies that the import quota will be distributed among importers in the order of priority of filing applications with the customs authority. According to the ministry, the duty on the import of sugar into Ukraine is currently 50%.

Trade

Brazil exported 2,697,844 tonnes of sugar in May 2021, up from 2,583,479 tonnes in the same month last year, government data showed. Shipments were also up significantly from 1,903,597 tonnes in April, which had risen sharply from 1,514,757 tonnes in April 2020.

Price

Raw sugar futures in New York ended weaker on Thursday (June 3) as the market moved away from a one-month high of 17.93 cents hit in the previous session. A timely start of India's four-month monsoon season and the pick-up in sugar production in Brazil's Centre/South in the first half of May helped to pressure prices. The benchmark contract for July delivery ended down 25 points at 17.43 cents per pound, in dealings between 17.29 and 17.74 cents. Second-month October also shed 25 points to 17.48 cents per pound, while the back months ended with losses between 22 and 29 points. Trading volume fell to 105,915 contracts from 119,322 a day earlier.

Jun 04 - Market Briefing: Coffee (IHSmarkit)

- Hawaii's coffee production dropped 15% to 22.7 million pounds in 2021
- Peru’s coffee exports fall to 5-year low in 2020/21 to 3.6 million bags
- Arabica coffee futures retreat 4½-year highs

Production


Hawaii's coffee production dropped 15% to 22.7 million pounds, or 171,723 60-kg bags, in the 2020/21 season, from 26.8 million pounds (203,209 bags) the season before and 26.4 million in 2018/19. Farmers have struggled with the recent spread of a potentially devastating virus throughout the island, according to the US Department of Agriculture's National Agricultural Statistics Service. Bearing acreage was estimated at 6,800, down 1% from the previous year. The average yield was 3,510 pounds per acre, down 442 pounds from the previous year.

Demand

Peru’s coffee exports fell to five-year low in 2020/21 to 3.6 million bags of coffee. There was a drop in exports to almost all of Peru’s top customers except France and Italy. Germany was been the single-largest importer of Peruvian green coffee until 2015/16; it has since been overtaken by the US. Germany’s imports of Peruvian coffee in 2020/21 retreated to a more than two-decade low of 786,444 bags from 840,466 a year earlier. The US imported 892,980 60-kg bags of green coffee in 2020/21, down from 964,809 bags the year before.

Trade

Anti-government protests in Colombia have blocked exports of around 800,000 60-kg bags of coffee in May, according to a projection from the National Federation of Coffee Growers (Fedecafe).

Ivory Coast’s coffee bean exports in April 2021 collapsed to 382 tonnes (6,367 60-kg bags) from 4,872 tonnes (81,200 bags) in the previous month and 6,588 tonnes (109,800 bags) in the same month last year, provisional port data showed.

Brazil exported 3.169 million 60-kg bags of green coffee in May 2021, down from 3.595 million in the same month last year, government data indicated.

Price

Arabica coffee futures have been retreating, with the New York contract suffering sizeable losses by Thursday (June 3), as the market moves away from the 4½-year high of 166.75 cents per pound set on Tuesday. The benchmark contract for July delivery ended down 3.55 cents at 157.60 cents per pound, close to the lower end of the day's rather wide 156.10-162.10 trading range. Market participants said the pull-back was not unexpected, as the market had become technically overbought after the recent strong advance, but it remains supported by dry conditions in Brazil and delays to exports from Colombia. Second-month September shed 3.50 cents to 159.65 cents per pound, while the back months finished with losses between 2.80 and 3.50 cents.

Jun 04 - Market Briefing: Dried Fruit and Nuts (IHSmarkit)
- World almond production projected to be slightly higher than last crop year.
- Turkish dried apricot production forecast to gain by 22% in 2021-22.
- South African raisin exports 8% ahead in January-April 2021.

Production

This month’s online conference of the International Nut and Dried Fruit Council has ensured that the industry is now up to date with the latest production estimates across many of the key categories of nuts and dried fruits.

Turkey’s 2021 hazelnut crop is projected at 790,000 in-shell tonnes compared with an estimated 640,000 tonnes in 2020. Italy, in contrast, is expecting this year a much lower crop of 70,000 tonnes after its record 160,000 tonnes in 2020.

World almond production is set for a moderate increase this year (2021-22) to 1.77 million tonnes from 1.73 mln tonnes in 2020-21. The US crop is forecast by the USDA at 3.2 billion pounds, but the industry expects it to end up below this.

The US 2021 pistachio crop is pegged at 400,000 in-shell tonnes compared with 477,000 tonnes in 2020.

Frost and heat has reduced Iran’s 2021 pistachio crop to an expected 145,000 in-shell tonnes from 190,000 tonnes in 2020.

South Africa’s recently harvested 2021 raisin crop is estimated at 72,000 farmer stock tonnes.

Turkish 2021 dried apricot production is expected to increase by 22% from that of last year to 110,000 tonnes, as the trees are in an ‘on-year’.

The global dried fig crop is expected to reach 142,500 tonnes in the 2021-22 season, 3% down year-on-year. Turkey may total 75,500 tonnes, 12.5% less, experiencing an ‘off-year’. Meanwhile, the US is expecting another disappointing crop of 8,000 tonnes, 500 tonnes down.

Demand

Export figures (see Trade below) confirm that demand for Turkish hazelnuts is down this season. This nut is heavily dependent on premium chocolate demand and sales through gift shops etc. and both have been hit by the Covid-19 influenced limits on travel. However, trade sources this week reported a significant increase in demand for new crop.

Almonds and pistachios continue to generate strong offtake and global industry sources at the INC event were understandably optimistic for the future growth prospects.

Raisins South Africa cites increased snacking at home and use of raisins in home baking as helping to boost demand during the Covid-19 pandemic. Export volumes (see Trade below) reflect this upturn.

Trade

Turkish hazelnut exports between 1 September 2020-30 May 2021 totalled around 230,545 tonnes, down from 293,573 tonnes in the same period of 2019-20.

South African raisin exports are about 8% ahead for the January-end of April 2021 period at around 20,000 tonnes.

Turkey’s dried apricot industry is considering proposing dried apricots as a complementary product to prunes, the idea being that this would help cover gaps in prune supply.

Logistical issues (including high freight rates) continue to challenge trade flows and create difficulties for exporters.

Prices

Turkish 11-13 hazelnuts are quoted on the spot market at USD6,300 per tonne cpt Europe. Shipment indications on the same are at USD5,890/tonne cif Europe.

US almonds were described as competitively priced against other tree nuts by sources at the INC event. US Non Pareil select 23/25 shelled, are listed on the IHS Markit database at USD5,842/tonne cif NW Europe and standard sheller run at USD4,188/tonne cif NW Europe.

Turkish dried apricots continue to command high prices. The No. 8 size is listed at USD3,200/tonne cif UK.
 

Jun 04 - Daily Cocoa Futures Market Report

With a GBP 14 range (Sep 21 GBP 1639/1625), it was a quiet trading day in which current sideways movement continued. Yesterday's holiday in large parts of Europe also did not contribute to a breakout from the current lethargy. The Sep 21 ended the day at GBP -3 at GBP 1627, while the remaining dates closed almost unchanged. The only "mini" highlight was the Jul / Sep 21 spread, which converged GBP 7 and ended the day at GBP -14.

Jun 03 - Daily Cocoa Futures Market Report

Business as usual - yesterday, too, there was no breakthrough to the south, although new long liquidations in the front months put the market under pressure and levelled out yesterday's gains. However, the 'magic' support around GBP 1620 held once again. The Sep 21 traded down to lows of GBP 1621 to close at GBP 1630 (-8). The British pound has stoically held at the same level for weeks. However, it is likely that Boris Johnson, under pressure of the encouraging Covid 10 development in the UK, will lift the economic restrictions there completely by the end of June at the latest, which should then support the GBP.

Jun 03 - Vietnamese and Brazilian pepper exports enjoying momentum

- 15% increase in Vietnamese revenues despite fall in exported volume.
- Vietnam, the main importer of Brazilian pepper.

The Vietnamese and Brazilian pepper industries continue with rising revenues thanks to high prices, despite most trading sources considering that it was a short-term trend.

Vietnamese exports fell by 20% in volume year-on-year to 93,550 tonnes although revenue rose by 15% to USD284.0 million, according to Vietnamese customs data.

The US and the UAE were the main importers, accounting for 21% and 6%, respectively, of the total volume.

Brazilian international sales fell by 2% y-o-y in volume to 32,450 tonnes and by 32% in value to USD84.4 mln in January-April 2021.

The UAE, Vietnam and Germany were the main importers, accounting for 12% and 11% and 11%, respectively of the total exported volume.


Jun 03 -Guatemalan cardamom exports closed Q1 with a sharp rise in volume

- 80% increase in exports.
- Gradual fall in fob export prices.

Guatemala’s cardamom exports reached 18,000 tonnes, worth USD382.2 million, in Q1 2021, 80% more year-on-year in volume and 26% more in value.

The Middle East markets were the main importers. Saudi Arabia, the UAE and Egypt co-led purchases, accounting for 26%, 20% and 11% of the total volume.

Exports started 2021 with record sales of 9,000 tonnes. Exporters sold out the previous crop after closing 2020 with another record: 65,110 tonnes valued at USD1.13 billion, 78% more in volume and 75% more in value.

Analysis

Most players expected a sharp rise between February-March due to the end of bottleneck in the  Suez Canal , but volume was 4,040 tonnes, quite close to February.

The Guatemalan industry is still focused on covering the demand for the Ramadan festival, taking advantage of its window of opportunity against the Indian crop and a disappointing crop of the latter. The average export fob price is still falling. It reached USD21,939/tonne, 21% less month-on-month and 16% less y-o-y.


Jun 03 - Global hazelnut supply looking favourable

- Consumption mostly intact despite Covid-19 and logistical challenges.
- US and Chile have sights set on significant growth in future years.
- Hopes for improved shipping movements soon.

Global hazelnut supply is projected to be higher this crop year (2021-22) as an expected bigger crop in Turkey should help to offset a substantial decline in Italy.

Chile, Georgia and Azerbaijan are among other countries forecast for a rise in production this year, based on figures presented at the INC (International Nut and Dried Fruit Council (INC) Online Conference on May 25.

Further ahead, global output looks set to expand as the US and Chile increase plantings and other origins increase their involvement.

Industry sources on the hazelnut panel at the event were generally quite optimistic for the consumption outlook ahead, although it was acknowledged that Covid-19 has had an impact.

Jun 02 - African cashew processing activity and lower stocks expected to lift prices

- Sharp rise in prices for small kernels.
- African origins are gradually increasing processed exports to EU and US.
- Stocks expected to fall sharply in Q3.

Indian and Vietnamese stocks of raw cashew nuts (RCN) are tight, meaning higher prices than in 2020, according to trading sources.

Cashew is still being harvested in the northern hemisphere and most crops are no higher than in 2021 due to Covid-19 restrictions. Cambodia is the only origin with a bumper crop, initially estimated at 250,000 tonnes, 32% more year-on-year, thanks to acreage expansion developed by the Vietnamese industry.

The general manager of the Indian company Samsons Traders, Pankaj Sampat, quoted that Vietnamese W320 processed cashews ranged from USD3.15-30 per pound fob in May, up from USD2.7-2.9/lb from February-March. Broken grades peaked at 2.20-2.30, 13% more; and LP rose by 60% to USD1.65-1.75/lb.

The Vietnamese trader Golden Bridge confirmed those price levels in its latest market update.

West Africa’s RCN prices ranged from USD1,250-1,500/tonne c&f in May, up from USD1,050-1,150/tonne in February.  

Sampat explained that the industry may be experiencing a turning point due to the following factors:

- Lower crops and rising consumption are cutting stocks in India and Vietnam, the main processors.
- African markets are starting to export processed cashews to the EU and the US, after obtaining certification as reliable origins.
- Port congestion is being fixed gradually although export recovery is pushing up sea transport prices.

A new Covid-19 outbreak may impact key importers, as India just now. However, if the current scenario is stable, prices will be stable and will start to grow when the Indian market recovers high consumption levels.

Meanwhile, Golden Bridge predicts a slight fall in Vietnamese prices when African and Cambodian RCN shipments are in full swing although current high prices are blurring this scenario.

Jun 02 - Indian turmeric price stabilised despite weak consumption

-  Stabilised spot and futures prices.
- 10% increase in exports.

The Indian spot fob turmeric price closed in May at INR7,603 per quintal (USD103/quintal) at the Nizamabad market (Telangana state, South Central) on 31 May, unchanged from 3 May, despite weak demand due to lockdowns.

The country’s global sales reached 24,790 tonnes, worth USD29.4 million, 10% more year-on-year in volume but 16.7% less in value.

The main importers were Bangladesh and the UAE, taking 23.5% and 9.2% of the total volume.

The updated daily futures market prices on NCDEX were:

    Deliveries in May 2021 closed at INR7,122/quintal on 20 May, 12% more than on 22 April.

Jun 02 - Daily Cocoa Futures Market Report

Wrapped in a GBP 19 range, the market literally swallowed any fundamental news released over the long weekend in the UK and the US. The ICCO raised its surplus expectations to 165,000mt (previously 120k mt) and expects an all-time record crop of 5.02m mt! Arrivals in Côte d'Ivoire as of 30.05 are at 1.997mn mt vs. 1.857mn mt from last year (+7.5%). New lockdown measures in Malaysia and a generally firm commodity environment were also virtually ignored, or was cocoa just taking a short break? Bulls and bears are almost equally matched. The Sep 21 played ping pong between light hedging pressure and price hedges. Closing price GBP +8 at GBP 1640

Jun 02 - France's Tereos seeks to exit ventures in China, Romania - sources 

French sugar producer Tereos is seeking to exit its ventures in China and Romania as part of a wider move by the new management to divest some international assets to lighten the group's heavy debt and boost profitability, sources close to the matter said. Tereos, the world's second largest sugar producer by volume, reshuffled its top management since an extraordinary meeting in December dismissed its chief executive.

May 31 - Daily Cocoa Futures Market Report

It was an unspectacular end of the week. A firmer British pound the market could not put the market under pressure, but caused the arbitrage to narrow around GBP 17. That was perhaps already the highlight of the day, as it went sideways once again. The tentative break towards the technically relevant moving averages was intercepted at the day's highs at GBP 1632 basis Sep 21 by price hedge selling against origin cover. Through the board, London closed unchanged (Sep 21 GBP 1632; -1). Speculative selling reflected the Open Inte-rest that grew during the week, as evidenced in the Committments on Traders with a reduction in the speculative net long position of around 60% across both markets. In London, 'Specs' reduced around 4.4k lots, in NY -9k; Managed Money thus 11k lots net long. Today, the markets remain closed today due to the holiday. 

May 28 - Market Briefing: Spices and Exotics (IHSmarkit)

    Cloves crops falling short of hopes.
    Honey draws strong demand.

Production

Zanzibar and Comoros will have disappointing cloves crops of 4,500 tonnes and 3,500 tonnes respectively, due to unfavourable weather, with harvests starting between June-July.

Cyclone Taukta has severely damaged Indian clove plantations, pushing up farmgate prices to a record INR103,000/tonne (USD1,414/tonne) last week.

Brazil’s next cloves harvest will take place in December but Brazilian crops are not bountiful and will be unable to cover the supply gap expected this year.

Harvesting of the Indian turmeric crop is in full swing. The 2020-21 crop estimate is 10% lower than the previous crop (939,000 tonnes), due to lower cultivation as a consequence of falling prices between Q2-Q3 2020.

Spain’s 2021 fresh garlic output may reach 275,000 tonnes, 1% more year-on-year, on 28,000 hectares, 6.8% more, according to the Spanish Garlic Farming Association (Anpca).

The federation of Indian spices stakeholders (FISS) has launched its Gujarat (the main Indian origin) 2020-21 cumin crop estimate, 15% lower (200,000 tonnes) than in the previous season due to poor yield and cut in planted acreage.

Demand

The Indonesian cloves market is undersupplied, and many Chinese importers are taking advantage to re-export to the former at higher prices.

Indian clove importers are advised to be covered until Q3, just when Madagascar starts to ship its new output.

Internal demand for cumin seed in India is expected to slow down due to new Covid restrictions.

Export data shows continued strong demand for honey, such as from key origin China (see Trade below). Interest has been heightened by increased home working due to lockdowns (consumers therefore having a proper breakfast before starting work).

Trade

Partial lockdowns are slowing domestic trade in Indian turmeric.

The Codex committee on spices and culinary herbs (CCSCH) has debated standards on spices and herbs such as ginger, chilli, paprika, basil, nutmeg, cloves, saffron, oregano and basil in its fifth session, held from 20-29 April 2021.

Draft proposals specify product presentation, insect damage, adulteration and microbiological levels, aflatoxins and chemical and physical characteristics such as moisture, volatile oil contents and ash proportion.

China exported about 34,000 tonnes of natural honey in Q1 2021, 25% up year-on-year from the preceding year. Its shipments to the UK were over 6,000 tonnes in Q1, a 36% decrease from the same time last year.

Japan is the largest destination for Chinese honey, with 10,000 tonnes in Q1, 32% up y/o/y.

Peruvian ginger exports rose by 32% year-on-year in volume to 9,940 tonnes and by 56% in value to USD26.3 mln in Q1 2021, after reaching record international sales of 51,120 tonnes, worth USD107.1 mln, in 2020, up from 23,830 tonnes valued at USD41.9 mln.

Indian cumin seed exports reached 33,140 tonnes, worth USD65.2 million in January-February 2021, 31% more year-on-year in volume and 19% more in value.

Prices

Madagascar’s new cloves season started last November at USD4,500 per tonne cfr Singapore and has increased by 55% to USD7,500/tonne in May.

Indonesian cloves prices were at USD6,020/tonne this May, unchanged from April and 34% more than last November.

The Indian spot fob turmeric price closed on April 28 at INR7,646 per quintal (USD103/quintal) at the Nizamabad market (Telangana state, South Central), down from INR7,726/quintal on 26 March.

Average prices of Chinese natural honey exported in Q1 2021 were USD1,870 per tonne fob, 4% down year-on-year.

Among top 10 destinations, Chinese honey to Japan in Q1 2021 was sold at the highest price of USD2,200/tonne.

The Indian cumin seed fob spot price closed at INR14,000 per quintal (USD195.3/quintal) on 10 May at the Jodhpur market (Rajasthan, North West), unchanged from 12 April, but far from INR14,825/quintal reached on 7 April.

Forward view

- Traditionally, cloves prices should fall in October, when the Madagascan harvest is around the corner, but most market participants estimate the global supply will be between 50-60% less than average, leading to a long-term bullish scenario.
- Indian demand is expected to be strong as the country’s own cloves crop is down and material is needed for the festival season.
- Honey demand has been boosted in part due to lockdowns and people working from home so it remains to be seen whether this trajectory will slow to any extent as some of these consumers get out of their home more and/or return to their offices.

May 28 - Market Briefing: Coffee (IHSmarkit)

    Brazil is estimated to produce 48.8 million 60-kg bags of coffee in the upcoming 2021/22
    Colombian coffee exports blocked by protests, up to about 500,000 bags delayed
    Vietnam’s coffee exports in April down 22.1% from March at 132,111 tonnes

Production

Brazil is estimated to produce 48.8 million 60-kg bags of coffee in the upcoming 2021/22 harvest, down 22.6% from a record 63 million bags produced in 2020/21, according to Conab. If realised, this would be the lowest output since 44.9 million bags in 2017/18. Meanwhile, Safras & Mercado, sees the crop at 56.5 million 60-kg bags cutting its previous forecast of 57.1 million bags. Safras now expects the harvest of arabica beans to reach 34.7 million bags versus 35.2 million bags previously. This would be 31% less than a year ago.

Colombia produced 810,000 60-kg bags of coffee in April 2021, up 9% from 744,000 produced in the same month last year, the National Federation of Coffee Growers (Fedecafe) said. Total output in the first seven months of 2020/21 is up 2.9% at 8.3 million bags from 8.1 million last year.

Demand

Green coffee stocks in US port warehouses rose by 83,405 60-kg bags during April 2021 to reach 5,762,567 bags at the end of the month, according to the Green Coffee Association (GCA). End-April stocks were down 755,300 bags from the year-ago level, the 10th consecutive y/y decline. Stocks in March had been at the lowest level since June 2015, at 5.6 million bags.

Green coffee stocks held in Japanese ports amounted to 2.8 million 60-kg bags at the end of March 2021, up from 2.8 million at the end of the previous month but 49,933 bags below the count at the same time last year, data from the All Japan Coffee Association showed. This was the 12th straight month during which stocks were lower than in the same month last year even though the y/y decline is falling since September.

Trade

Buenaventura, Colombia’s main shipping hub, continues to be blocked by protests which started April 28, with about 500,000 bags delayed in the country, which ships roughly 1 million 60-kg bags a month. About 60% of the nation’s beans are shipped from Buenaventura. US-based coffee importer Caravela told clients on 21 May that shipments of Colombian coffees will be delayed by up to five weeks.

Ugandan coffee exports in April 2021 totalled 537,538 60-kg bags, down slightly from 572,839 in March but up sharply from 359,973 bags in the same month last year. This brought total coffee exports in the first seven months of 2020/21 to 3,398,201 bags, up from 2,932,929 a year ago.

Vietnam's coffee exports in April were down 22.1% from March at 132,111 tonnes. Volumes were also down from the 165,799 tonnes shipped this time last year. For the first four months of 2021, Vietnam exported 584,981 tonnes of coffee, down 14.3% from a year earlier.

Price

Arabica futures in New York have recently posted strong gains that elevated the benchmark July contract to fresh four-year highs amid worries over poor production in top producer and exporter Brazil in 2021/22 and transportation problems in Colombia. On May 26, the July contract added 5.20 cents to settle at 155.70 cents per pound, having hit a four-year high of 156.75 earlier in the session. By May 27, it reached a 4½-year high of 157.25 cent per pound for the July contract, also early on in the session. However, the market was not able to hold onto the gains and ended slightly lower, down 35 points on the day at 155.35 cents per pound.

In Vietnam, farmers in the Central Highlands offered coffee beans at VND33,400-34,300 (USD1.44-1.49) per kg, up from VND32,800-34,000 last week. In Indonesia, beans were offered at premiums of USD110 per tonne to the July contract.

May 28 - Market Briefing: Sugar (IHSmarkit)

    Global sugar production in 2020/21 estimated at 186.9 million tonnes
    Brazil’s sugar production likely to drop 5.7% to 38.9 million tonnes in 2021/22
    China’s sugar imports in April 2021 reached 180,000 tonnes

Production

Global sugar production in 2020/21 is estimated at 186.9 million tonnes, up from 179.7 million in 2019/20. This means that IHS Markit’s marginal surplus estimate for the 2021/22 season has gotten even smaller, at less than 0.1 million tonnes compared with 0.3 million previously. Meanwhile, the deficit in the current 2020/21 season has been cut to 3.4 million tonnes from 4.3 million in IHS’s previous projection.

India produced 445,000 tonnes of sugar in the first half of May, down from 824,000 in the second half of April and also below 723,000 tonnes in the same period a year ago, Indian Sugar Mills Association (ISMA) data showed. This brought total sugar production, since the start of the 2020/21 season, to 30.3 million tonnes, up sharply from 26.5 million a year ago.

Brazil's sugar production is likely to drop 5.7% to 38.9 million tonnes in the new 2021/22 season, Conab said. Output from the Centre/South is seen dropping 6.4% to 35.7 million tonnes, while production in the North/Northeast region is projected to rise 2.8% to 3.1 million tonnes.

Demand

Apparent global sugar consumption in 2021/22 is practically unchanged from IHS’s previous forecast at 183.4 million tonnes (-0.1 million).

China's sugar imports in April 2021 reached 180,000 tonnes, little changed from 200,000 in March but up significantly from 124,000 tonnes in the same month last year. This brought total sugar imports in the first 7 months of 2020/21 to 3.9 million tonnes, up sharply from 1.5 million imported in the same period last year and the highest total ever imported during the first 7 months of the season.

EU sugar imports in March reached 64,000 tonnes, down from 120,000 in the previous month and compared with 133,000 tonnes in March last year. This brought total imports in the first six months of 2020/21 to 593,000 tonnes, down from 1.05 million tonnes in the same period a year ago.

Trade

India’s sugar exports may touch 6.5 million tonnes in 2020/21 according to the National Federation of Cooperative Sugar Factories. The government has cut the subsidy on sugar exports from INR6,000 to INR4,000 per tonne, applicable from 20 May. However, this loss of USD27 per tonne should not have a major impact on 2020/21 shipments, with 5.7 million out of the mandatory export quota of 6 million tonnes already contracted and some mills even selling sugar without the support of government subsidies.

EU members exported 65,000 tonnes of sugar in March 2021, down from 70,000 in February and in line with 60,000 tonnes in the same month last year, according to preliminary Eurostat data. This brought total exports in the first six months of 2020/21 to 492,000 tonnes, down from 603,000 tonnes in the same period last year.

Price

Sugar started off May on a two-month high of 17.89 cents per pound, after which, the raw July New York contract has been moving sideways, at around 17 cents for the past two weeks. Sugar then hit a one-month low of 16.54 cents this week (May 24) before showing signs of recovery as the week progressed, bouncing back to 17.12 cents per pound by Thursday (May 27). Overall, raw sugar futures in New York have generally been weaker as stronger-than-expected crushing results in Brazil's Centre/South were seen as bearish. The market was also dragged down by fears about rising inflation that may prompt the US Federal Reserve to raise interest rates.

May 28 - Market Briefing: Dried Fruit and Nuts (IHSmarkit)

- 9% increase in global macadamia crop.
- 10% increase in global almond consumption expected due to low prices and rising demand in China and India for healthy products.
- US walnuts ready for bull market when the latest crop is almost sold out.

Production

The 2021-22 global macadamia production is likely to increase by 9% year-on-year to 266,400 tonnes thanks to a combination of acreage expansion and better water management in Australia, China and South Africa, it was announced during the virtual International Nut and Dried Fruit Congress held from 25-27 May.

The 2021 US almond output is expected to reach 3.2 billion pounds, 3% more year-on-year, thanks to a record acreage of 1.33 million acres, according to the initial USDA forecast on 12 May.

Spain’s 2021 almond output is expected to fall by 5.5% year-on-year to 109,360 tonnes due to a combination of frosts in non-irrigated areas and poor pollination.

The 2020-21 Argentinian peanut crop is expected to fall by 6.8% to 910,000 (kernel) tonnes and exports by 13.6% to 623,610 tonnes despite planted acreage increasing by 10% to 385,590 hectares, according to the Argentine Chamber of Peanut (CAM).

The 2021-22 global date crop is forecast at 1.11 million tonnes, 11% more, thanks to acreage expansion in the Middle East and North Africa.

Demand

The global almond consumption is expected to increase by 10% y-o-y to 1.72 mln tonnes in the 2021-22 season due to the rising demand from China and India for healthy products and abundant and cheap supply.

Demand for hazelnuts is weak and international buyers want to wait before they commit to buying for Q4. Travel restrictions and lockdowns due to Covid-19 make it very difficult to predict consumption.

Chinese demand for peanut oil is still at record levels. Indian exports of peanut oil to China may reach 225,000 tonnes in April-March 2020-21, according to the Indian Oilseeds and Produce Exports Promotion Council (IOPEPC), up from 40,000 tonnes in the previous season.

Trade

High logistical costs are hitting international and domestic sales of processors and packers such as Spain’s Borges and Importaco and the US company John Sanfilippo & Son. In addition, some port authorities such as the Vietnamese are proposing to increase fees to shipping companies to fund updated handling equipment.

The Almond Board of California (ABC) April 2021 position report showed that US almond exports last month were 179.83 mln lbs versus 103.49 mln lbs in the same month in 2020. This brought seasonal (August 2020-April 2021) exports to 1.62 billion lbs compared with 1.27 bln lbs in the first nine months of the 2019-20 season, an increase of nearly 28%.

US pistachio sales reached 24,360 (short) tons this April, unchanged from March 20201 but 27% more year-on-year, bringing seasonal shipments (September-April) to 227,860 tons, 12% up y-o-y.

Prices

Vietnamese cashew prices are firming, and fob quotes are as follows: WW180: USD3.85-3.90/lb; WW240: USD3.50-3.55/lb; WW320: USD3.10-3.15/lb: DW: USD2.50-2.55/lb; WB: USD1.65-1.70/lb; WS: USD2.00-2.05/lb.

The Walnut Board of California (WBC) reveals that 91.8% of the 2020-21 crop is sold or committed in April. Many farmers and packers are halting sales and renegotiating prices, after a long bearish period. Prices for Californian walnuts in the first fortnight of May are: Chandler LHP 20 at USD2.5 per pound; domestic LHP between USD2.25-2.35/lb; Combo Halves and pieces between USD1.85-1.90/lb.

Dried fig prices are rising because the 2020-21 crop is set to sell out. Prices were at USD5,258/tonne cif UK for Lerida no 6/7 this May, 2% more than in April.

Forward view

- Covid-19 vaccination process and the gradual end of lockdowns and restrictions, whose end will grant a sharp rise in nut exports.
- International food companies predict that container shortage may finish in Q4, once the global port congestion is been gradually fixed by governments in Q3, cutting logistics costs.
- USDA’s objective almond forecast will determine prices between June and the 2021 harvest (August-September).
- Global dried fruit preferences after heavy rains and hails damaged raisin and prune crops in France, Chile, Argentina and South Africa, Turkish processors proposing to use dried apricots as a substitute in the latest virtual International Nut and Dried Fruit Congress, held from 25-27 May.

May 28 - Market Briefing: Cocoa (IHSmarkit)

    Global cocoa surplus of 178,000 tonnes estimated for 2020/21
    Ivorian cocoa production projected at 2.2 million tonnes this season
    Global 2021 cocoa grind expected to rise by 1.2% to 4.7 million tonnes
    Cocoa futures down 8.2% since the start of 2021, losing USD214/tonne

Production

The 2020/21 cocoa season is now estimated to see a global cocoa surplus of 178,000 tonnes, up from a IHS Markit’s recent estimate of 99,000 tonnes. Global production is now also placed at 4.9 million tonnes, from IHS’s prior estimate of 4.8 million tonnes. IHS Markit also increased its Ivorian cocoa production estimate to 2.2 million tonnes from 2.1 million forecast previously. In addition, the production forecast for Ghana, was increased by 80,000 tonnes to 930,000 tonnes.

Brazil’s cocoa output dropped to its lowest level in over a decade, producing 3 million 60-kilo bags (166,532 tonnes) in 2020/21, down 16% y/y. In the state Bahia, total production in the past crop-year plunged to its lowest level on record to 2 million 60-kilo bags (95,455 tonnes), a 19% y/y decrease.  

Demand

IHS Markit also revised its 2021 cocoa grind estimate, now expected to rise by 1.2% to 4.72 million tonnes, compared to a 0.3% decline expected in earlier forecasts. This, along with the increased surplus, has also resulted in changes for the ending stocks to grind ratio, now expected to rise to 40.4%, up from 37.1% in 2019/20.

Ivory Coast cocoa grinding could drop by 40% to 25,000 tonnes in May, and to 20,000 tonnes in June, due to power shortages, according to exporters' association GEPEX. Cocoa grinding reached 42,000 tonnes in April, down 8.7% from 46,000 tonnes last season. Cumulatively from October 1 to the end of April, grinders processed 335,000 tonnes of beans, up from 328,000 tonnes last season.

In its Q1 financial results, Mondelez noted confectionary demand growth of 10% y/y in emerging markets and 7% for the last two years.

Trade

Exports of Ecuadorian cocoa beans and semi-finished products reached 101,605 tonnes in the first four months of the year, rising by 10.7% y/y. In April alone, Ecuador exported just over 20,000 tonnes compared to 22,000 tonnes the month prior and 24,000 tonnes on average over January and February.

April’s average exchange certified cocoa stocks increased by 22% m/m in Europe, while a 13% m/m rise was recorded in in the US, outlined the ICCO. European warehouses averaged 106,075 tonnes, up by 4% compared to their average level of 101,801 tonnes in April 2020. In the US, total stocks increased by 14% y/y to reach an average of 302,765 tonnes in April 2021.

A fifth of cocoa purchases by multinational companies in Ivory Coast must be fulfilled by local firms in an effort to improve competition, according to a new government decree.

Price

Cocoa prices are down 8.2% since the start of 2021, losing USD214 and totally missing the inflation boat that has buoyed countless commodities from soybeans to copper and lumber.

In May alone, cocoa prices were again mostly in a slump, with a 5½-month low at the start of the month, as New York fell to USD2,369 a tonne. On May 17, prices hit a two-month high of USD2,539. Though since then, prices have continued to falter, as New York slipped to a three-week low on May 25 to USD2,380.

Meanwhile, average cocoa butter prices in April dipped by 15% y/y in Europe to USD4,839 per tonne and by 11% in the US to USD5,025 per tonne, said the ICCO. In contrast, cocoa powder prices rallied by 55% to USD4,251 per tonne in the US and by 44% to USD3,381 per tonne in Europe.

May 28 - Global sugar supply balance seen at a surplus in 2021/22 ( StoneX ) 

The global sugar market is expected to shift from a deficit in the current season to a small surplus in 2021/22 (Oct-Sept) as production increases in countries such as India and Thailand outweigh a smaller crop in top producer Brazil, broker StoneX said on Thursday. It expects a surplus of 1.7 million tonnes in 2021/22 compared to the deficit of 3.7 million tonnes in 2020/21.

May 28 - Daily Cocoa Futures Market Report

The downside continued yesterday and Sep 21, with yesterday's low at GBP 1621, slowly targeted GBP 1600 support and early May levels before an impressive rally snapped market participants out of spring fatigue. Sep 21 ended the day GBP -17 at GBP 1731, NY was slightly up ($+9) and arbitrage widened back to a triple digit discount. Hedge pressure from the origin for the new crop seems to be the most discussed topic at the moment. They were certainly active, but the question is whether the pressure on prices will continue. London and New York will remain closed on Monday (Spring Bank Holiday), perhaps the last day before the long weekend will bring new insights. 

May 27 - Kenyan Coffee-Export Revenue Rose 27% in First Four Months (DJ)
  Kenya's coffee-export revenue rose 27% from January to April compared with the prior-year period, Patrick Njoroge, governor of the country's central bank, said Thursday.
  Coffee beans sold to overseas markets brought in revenue of $98 million in the first four months, up from $77 million a year ago, Mr. Njoroge said during a virtual media briefing.
  Almost all Kenyan arabica coffee is sold at an auction run by the Nairobi Coffee Exchange, with most destined for export, although direct sales are allowed. Kenya's arabica auctions use the New York ICE futures index as their benchmark.
  The coffee auction is now in recess from April 30 until June 29 due to low volumes between harvesting seasons.

May 27 - Daily Cocoa Futures Market Report

The 2nd month Sep21 tested the resistance around GBP 1650 and closed slightly below it at GBP 1648 (GBP- 9). Over the week, therefore, once again states a general direction, namely sideways. The origin appeared with new main crop sales actively in the market and furthermore let announced in the evening that in the Côte d'Ivoire from now on 20% of the export contracts closed by multinational firms must be fulfilled by local companies, in order to increase their competitiveness. A decree to this effect has now been passed. Within 5 years, the number of local exporters has been cut in half, which is related to the competition of multinationals (but - what remained unmentioned - also to their lack of financing and more restrictive granting of export licenses by the CCC...).

May 27 - Indian mills sign sugar export deals without government subsidy (Reuters) 

Indian sugar mills have started selling sugar without the support of government subsidies, which could lift exports by 14% from a year ago to a record 6.5 million tonnes in 2020/21, industry officials told Reuters on Wednesday. The exports will help the world's second-biggest sugar producer to lower stockpiles and support local prices, which, at odds with the global market, have been under pressure from oversupply at home.

May 26 - Malaysia limits cocoa/rubber/pepper workforce capacity to 60% amid Covid-19 (Agricensus)

Malaysia imposed a stricter implementation of the Movement of Order Control (MCO) on agribusinesses, limiting workforce capacity on palm oil plantations to 60% in a bid to curb the spread of Covid-19, the government said in a statement Wednesday.

The stricter policy is effective immediately and failure to comply will be subject to legal action taken against the business, the Plantation Industries and Commodities Minister Mohd Khairuddin Aman Razali said in the statement.

“All sectors under the agri-commodity industry such as palm oil, rubber, lumber, cocoa, pepper, kenaf and biodiesel are allowed to operate with a capacity of only 60 percent of workers,” he said.

“In this regard, all industry players and employers must ensure that employees always follow the new standard operating procedures (SOP) that have been set. More frequent monitoring by employers on compliance by employees should be implemented,” the minister added.

Similar Covid-19 measures were taken by Malaysia during the first half of 2020, limiting the production of palm oil due to a lack of labour and causing prices of the tropical oil to heat.

May 26 - Demand uncertainty prevails across Turkish hazelnut market (IHSmarkit)

  • 2021 crop still expected to be good.
  • Indian variant of Covid-19 is cause for concern.
  • Traders watching strategy of TMO.

The Turkish hazelnut market remains subdued with future demand prospects uncertain as global importers hope for a continued easing of Covid-19 lockdowns.

In the UK, there is nervousness over the Indian variant of Covid-19 and hopes that planned additional relaxation of previous lockdown restrictions will not be jeopardised by recent increased instances of the Indian variant.

Meanwhile, the outlook for the 2021 crop is positive. The weather has remained favourable.

Vittorio Friedmann of Voicevale told IHS Markit: “The new crop looks good. There have been some minor damages but it still looks like a fairly large crop.”

The key question is what will the Turkish Grain Board (TMO) do. “This year they got away without buying any quantities but the local politicians and MPs want them to come with a price acceptable to the farmers. So what they are saying is that the price they came up with last year was not acceptable to the farmers,” Friedmann said.

Recent estimates have pegged the 2021 crop in a range of 780,000-800,000 tonnes.

However, Friedmann cautioned that it is still a bit early to forecast the crop as it is at the kernel formation stage. A third count by the exporters union will be made soon.

Italy is also not optimistic for its crop prospects, pegged by some at 70,000-80,000 tonnes, with carry-over giving a total availability of around 100,000 tonnes.

Weather permitting, Turkey starts its harvest at the beginning of August and has it all dried by the end of that month. Italy’s follows in mid-August. Hence, arrivals from these crops are under way from mid-September.

Dutch broker/agent QFN Trading & Agency noted in a report today that the market remains quite quiet.

Despite a stronger US dollar against the Turkish lira the market increased since there are a limited number of sellers that want to offer at the current market level, the company added.

Friedmann said: “The demand is not very strong. The buyers want to see how the demand goes in the summer months to decide to buy the balance for quarter four. There has been some industrial business for Q4 but still there is some business to be done. The question is to what extent the business done in quarter three will extend to quarter four, without having a clear picture on the lockdowns and whether people will be travelling or staying at home. This makes it very difficult to predict the consumption. So people are in a wait and see mode. It could be that all of a sudden the demand at home goes well and then we see a lot of spot trading for quarter four.”

Friedmann expressed fears that if UK citizens resist the urge to travel abroad, then there is a realistic hope that the Indian variant of Covid-19 will not escalate into a major issue, but if they give into temptation and there is a hefty travel exodus there is a high risk of the Indian variant spreading widely.

Inevitably, this could result in a reinstated lockdown or at the very least prevent the next anticipated relaxation in lockdown restrictions.

It also remains to be seen to what extent consumers will return to foodservice establishments – although hazelnuts as a category do not feature prominently here, unlike certain other categories of nuts and dried fruits. Hazelnuts, though, do feature strongly in premium confectionery and as such are vulnerable to any loss of sales at airports and other key travel outlets.

QFN Trading suggested the market will be dominated by the exchange rate in the coming days.

Friedmann predicted that as long as the Turkish lira eases slowly, prices are unlikely to fall much beyond current levels. He confirmed that 11-13 hazelnut kernels this week are holding levels of USD6,300/tonne cpt Europe.

A more accurate view on price trends should be possible in September, by which point the TMO position and farmers’ reactions should be clearer. In addition, the behaviour of the largest user should also be clear then.

May 26 - Daily Cocoa Futures Market Report

After a volatile start to the week on Monday, calm returned to the cocoa market yesterday. Sep 21 slipped to new lows of GBP 1635, which also marked yesterday's close (GBP -9). The decline in open interest in July 21 and the (slight) increase in Sep 21 suggest an initial rolling of specs / funds positions. Here, the near July / Sep 21 spread may come under further pressure. Yesterday, the industry cautiously accompanied the market with individual price hedges. The question now is where we would be without the liquidation of the shorts or the new longs of the speculative community. The current comfortable surplus seems to be priced in, the cover is successively held at current levels....So we would probably be exactly where we are now. However, without a (slightly) elevated resting pulse with ranges of sometimes over GBP 40 on some days.

May 25 - Indian guar gum price recovery (IHSmarkit) .

The Indian guar gum spot price was INR6,491 per quintal (USD88.9/quintal) at the Jodhpur wholesale market on 24 May, 4% more than on 26 April.

Indian guar gum exports were 30,580 tonnes, worth USD39.0 million from January-February 2021, 24% less year-on-year in volume and a third less in value. The US, Germany and Russia accounted for 30%, 14% and 10%, respectively, of the total exported volume.

The daily futures market prices on India’s National Commodity & Derivatives Exchange (NCDEX) were:

Deliveries in May 2021 closed at INR6,430/quintal on 20 May, 2% more than on 21 April.

May 25 - Daily Cocoa Futures Market Report

In anticipation of the long Whitsun weekend and the new Commitment of Traders figures, it was a quiet end to the week. The Sep 21 traded in a GBP 14 range (GBP 1642/1656) and ended the day GBP -2 at GBP 1650. With the majority of European and West African market participants absent, the start of the week was much heavier yesterday. Sep 21 gained over GBP 40 at times and traded to highs of GBP 1687. No need to panic, there was a 180 degree turnaround in the afternoon and Sep 21 ended the day GBP -6 at GBP 1644. Commitment of Traders as of 18.05 show an increase in net position from 23,530 lots to 59,275 lots net long. Managed money bought a combined total of over 28,000 lots, the majority of which was a reduction in shorts (almost 12k lots in London alone) and, interestingly, over 7k lots of fresh longs. This will have to be monitored closely.


May 24 - Ivory Coast Farmers Replacing Cocoa Trees With Rubber (DJ)

  Some cocoa farmers in the Ivory Coast are looking to harvest rubber as they seek to expand their income following a decision by the government-controlled Coffee-Cocoa Council to cut prices paid for cocoa at farmgates.

  The Coffee-Cocoa Council has lowered the price paid at farmgates for a kilogram of cocoa to 750 CFA francs ($1.39) for the current mid-crop, from XAF1,000 during last season's main crop.

  "Cocoa producers are annoyed and disgruntled with the CCC about the price fixed to be paid for a kilogram of cocoa. Right now, many farmers are cutting off their cocoa trees and replacing them with rubber plants," said Dominique Serikpa, a cocoa farmer who has now turned to rubber production.

  "We're still to do a study to know how many new rubber farmers are entering into our business, but we're happy to welcome new farmers," Eugene Kremien, president of The Natural Rubber Producers' Association in the Ivory Coast, said.

  "Everyone is diverting his attention onto rubber farming," said Romuald Kolo, a farmer. He added that farmers weren't prepared to sell their cocoa at a loss.

  The CCC couldn't be reached for comment.


May 24 - Gradual fall in Indian coriander prices (IHSmarkit)

The Indian coriander spot price was INR6,837 per quintal (USD97.3/quintal) at Jaipur (Rajasthan, North India) on May 17, 2% less than on 19 April.

The Kota market price fell by 3% to INR6,921/quintal between 19 April-5 May.

Indian exports increased by 17% year-on-year in volume to 8,390 tonnes in volume and by 14% in value to USD10.0 mln in January-February 2021, according to customs data.

The updated daily futures market price on India’s National Commodity & Derivatives Exchange (NCDEX) was:

Deliveries in April 2021 closed at INR7,194/quintal on 20 April, INR36 more than on 22 March.

May 24 - Sugar closes at three-week low (IHSmarkit)

Sugar prices on Friday (May 21) tumbled to three-week lows, as brazil rain outlook sparks long liquidation pressure.

July New York sugar #11 closed down 0.37 cents to 16.67 cents, while August London white sugar #5 closed down USD6.00 to USD447.40.

The outlook for rain in Brazil’s sugar-growing areas sparked long liquidation pressure in sugar futures after Somar Meteorologia forecast 20mm of rain for Brazil’s sugar-growing areas starting Friday.

Another negative for sugar prices was weakness in the Brazilian real, which fell to a two-week low against the dollar on Friday. A weaker real encourages export selling from Brazil’s sugar producers.

May 24 - Tanzania's Coffee Production to Rise 3.7% in 2021-2022 Season - DJ
  Tanzania's coffee production is expected to rise 3.7% to 84,000 metric tons in the marketing year beginning July 2021 to June 2022, the U.S. Department of Agriculture said.
  The increase is mainly attributed to more fertilizer use, improved extension services and a high-yield production cycle, the USDA said in its latest Tanzania annual coffee report released this month.
  Exports are expected to increase by 34% to 82,800 tons, the USDA said.
  "This is due to an increase in quality from improved marketing systems and relaxation of Covid-19 restrictions in Tanzania and neighboring countries," it said.

  The quality of coffee in Tanzania is expected to improve in the marketing year as buyers, many now working directly with growers, are expected to require higher growing standards as a condition to enter into a contract, the USDA said.
  Tanzania is Africa's fourth-largest coffee producer, according to the International Coffee Organization. The country produces arabica and robusta coffee.

May 21 - Market Briefing: Spices and Exotics (IHSmarkit)


Production

The Chinese garlic harvest started this month and the output may fall by 20% year-on-year due to heavy rains and floods during the sowing period.

The Codex committee on spices and culinary herbs (CCSCH) has debated standards on spices and herbs such as ginger, chilli, paprika, basil, nutmeg, cloves, saffron, oregano and basil in its fifth session, held from 20-29 April 2021. In addition, CCSCH has added recently drafts for oregano and turmeric.

The 2021 Mexican honey crop may rise by 22% year-on-year to 66,270 tonnes, according to the Mexican ministry of agriculture.

Demand

Rising demand for spices is encouraging investments to develop M&A and new processing plants. The German company Amatheon Agri, listed on the Euronext exchange (Amsterdam), is to open a chilli processing plant after starting its first chilli harvest in Zambia with a total capacity of 1,500 tonnes of dried chilli annually, meeting EU MRL limits.

US demand for high-quality spices is growing strongly as Indian export data between January-February 2021 reveals.

Trade

The EU is to limit the permitted level of morphine and codeine in poppy seeds from 1 July 2022 under a draft regulation likely to be adopted before autumn. The draft Commission regulation will set maximum levels for morphine equivalents in poppy seeds sold to consumers or bakery products containing them, from 1 July 2022.

Indian coriander exports increased by 17% year-on-year in volume to 8,390 tonnes in volume and by 14% in value to USD10.0 mln in January-February 2021, according to customs data.

India’s pepper exports reached 3,720 tonnes worth USD15.0 mln, 31% more y-o-y in volume and 39% more in value in January-February 2021.

Prices

Chinese dehydrated garlic prices rose by 50% y-o-y and 5-7% month-on-month this May to USD2,500/tonne fob Qingdao for flakes, despite softening between March-April and although carry-over stocks may cover the international demand, according to trading sources.

Indian black pepper prices have gradually risen to USD5,500/tonne ex-works nw Europe for MG1 grade in April, 19% more than in January 2021, according to IHS Markit.

 

May 21 - Market Briefing: Cocoa (IHSmarkit)

  • Global cocoa surplus estimated at 178,000 tonnes for 2020/21
  • Ivory Coast cocoa grinding could drop by 40% to 25,000 tonnes in May
  • Ecuadorian cocoa bean and semi-finished exports up 10% y/y

Production

The 2020/21 season is now estimated to see a global cocoa surplus of 178,000 tonnes, up from a IHS Markit’s recent estimate of 99,000 tonnes. The revised forecast is also up from the 102,000 tonnes expected by the International Cocoa Organization. The larger surplus is owed to top producer Ivory Coast’s current pace of crop arrivals. Recently IHS Markit increased its Ivorian cocoa production estimate to 2.2 million tonnes from 2.1 million forecast previously. In addition, the production forecast for Ghana, was increased by 80,000 tonnes to 930,000 tonnes. Nigeria also claims to be producing more this season than previously expected at 320,000 tonnes, this is against IHS Markit’s estimate of 260,000 tonnes.

Demand

Ivory Coast cocoa grinding could drop by 40% to 25,000 tonnes in May, and to 20,000 tonnes in June, due to power shortages, according to exporters' association GEPEX. Ivory Coast typically grinds 45,000 to 49,000 tonnes of beans a month. In April, Ivory Coast cocoa grinders processed 335,000 tonnes of beans by the end of month from the start of the season on October 1, up from 328,000 tonnes over the same period the previous season. Cocoa grinding reached 42,000 tonnes in April, down 8.7% from 46,000 tonnes last season.

Trade

Exports of Ecuadorian cocoa beans and semi-finished products reached 101,605 tonnes in the first four months of the year, rising by 10.7% compared to the same period in 2020. However, in April alone, Ecuador exported just over 20,000 tonnes compared to 22,000 tonnes the month prior and 24,000 tonnes on average over January and February.

April’s average exchange certified cocoa stocks increased by 22% m/m in Europe, while a 13% m/m rise was recorded in in the US, outlined the ICCO. European warehouses averaged 106,075 tonnes, up by 4% compared to their average level of 101,801 tonnes in April 2020. In the US, total stocks increased by 14% y/y to reach an average of 302,765 tonnes in April 2021.

Price

Cocoa prices on Thursday (May 20) moved lower for a third day and posted 1½-week lows, on rain forecast for Ivory Coast. July New York cocoa closed down USD25 to USD2,444, while July London cocoa closed down GBP19 to GBP1,632.

Average cocoa butter prices in April dipped by 15% y/y in Europe to USD4,839 per tonne and by 11% in the US to USD5,025 per tonne, said the ICCO. In contrast, cocoa powder prices rallied by 55% to USD4,251 per tonne in the US and by 44% to USD3,381 per tonne in Europe.

May 21 - Market Briefing: Sugar (IHSmarkit)

  • India's sugar mills produced 445,000 tonnes of sugar in the first half of May
  • Chinese sugar imports in April 2021 reached 180,000 tonnes
  • Sugar futures mostly retreated from last week’s 2½-month peaks

Production

India's sugar mills produced 445,000 tonnes of sugar in the first half of May, down from 824,000 in the second half of April and also below 723,000 tonnes in the same period a year ago, Indian Sugar Mills Association (ISMA) data showed. This brought total sugar production since the start of the 2020/21 season to 30.3 million tonnes, up sharply from 26.5 million produced in the same period a year ago.

Brazil's sugar production is likely to drop 5.7% to 38.9 million tonnes in the new 2021/22 season, Conab said. Output from the Centre/South is seen dropping 6.4% to 35.7 million tonnes, while production in the North/Northeast region is projected to rise 2.8% to 3.1 million tonnes.

Demand

China's sugar imports in April 2021 reached 180,000 tonnes, little changed from 200,000 in March but up significantly from 124,000 tonnes in the same month last year. This brought total sugar imports in the first 7 months of 2020/21 to 3.9 million tonnes, up sharply from 1.5 million imported in the same period last year and the highest total ever imported during the first 7 months of the season.

Ukraine’s sugar imports in April 2021 fell to 2,519 tonnes from 31,438 tonnes in March, according to official data. Total imports in the first 8 months of 2020/21 stand at 40,820 tonnes, up from just 1,397 tonnes imported in the same period in 2019/20.

Trade

India’s sugar exports may touch 6.5 million tonnes in 2020/21 according to the National Federation of Cooperative Sugar Factories. The government has cut the subsidy on sugar exports from INR6,000 to INR4,000 per tonne, applicable from 20 May. However, this loss of $27 per tonne should not have a major impact on 2020/21 shipments, with 5.7 million out of the mandatory export quota of 6 million tonnes already contracted.

Price

Sugar futures have mostly been ended lower this week, as the market extends its retreat from the 2½-month peak of 18.25 cents per pound set on May 12. By Thursday (May 20), raw sugar in New York ended only fractionally higher in the actively-traded months, amid support from a general recovery of commodities and equities from the previous day’s sell-off. Meanwhile, the benchmark contract for July delivery added 9 points to settle at 17.04 cents per pound, in dealings between 16.89 and 17.12 cents. Benchmark August white sugar futures ended down 10 cents at USD453.40 per tonne, having moved between USD451.80 and USD456.60 throughout the session.

May 21 - Market Briefing: Coffee (IHSmarkit)

  • Brazil’s coffee crop to reach 56.5 million 60-kg bags in 2021
  • Vietnam’s coffee exports in April were down 22.1% from March
  • US green coffee stocks rose by 83,405 60-kg bags in April

Production

Brazil’s coffee crop this year should reach 56.5 million 60-kg bags, consultancy Safras & Mercado said, cutting its previous forecast of 57.1 million bags. Safras now expects the harvest of arabica beans to reach 34.7 million bags versus 35.2 million bags previously. This would be 31% less than a year ago. The consultancy adjusted slightly upwards its projection for robusta coffee production by 100,000 bags to 21.8 million, which would be up 12% from last year.

Demand

Green coffee stocks in US port warehouses rose by 83,405 60-kg bags during April 2021 to reach 5,762,567 bags at the end of the month, according to the Green Coffee Association (GCA). End-April stocks were down 755,300 bags from the year-ago level, the 10th consecutive y/y decline. Stocks in March had been at the lowest level since June 2015, at 5.68 million bags. Current levels of green coffee stocks for the world’s largest consumer of the beverage remain, however, above historical lows around 4 million bags seen in 2011. The largest increases in April were seen in the ports of South Carolina and Savannah.

Trade

Ugandan coffee exports in April 2021 totalled 537,538 60-kg bags, down slightly from 572,839 in March but up sharply from 359,973 bags in the same month last year. This brought total coffee exports in the first seven months of 2020/21 to 3,398,201 bags, up from 2,932,929 a year ago. Robusta exports were up at 2,974,192 bags from 2,338,627 last year, while arabica shipments dropped to 424,009 bags from 594,302.

Vietnam's coffee exports in April were down 22.1% from March at 132,111 tonnes. Volumes were also down from the 165,799 tonnes shipped this time last year. For the first four months of 2021, Vietnam exported 584,981 tonnes of coffee, down 14.3% from a year earlier. Coffee export revenue in the January-April period rose 7.3% to around USD1.1 billion.

Price

Coffee prices were mixed this week, with dry weather in Brazil and protests in Colombia adding bullish sentiment on May 18, though values subsequently slipped amid spillover weakness from a broad-based decline in commodity markets linked to fears about rising inflation that may prompt the US Federal Reserve to raise interest rates. By May 20, the benchmark July arabica contract settled flat at 150.95 cents per pound after hitting an intraday high of 153.65 cents during the session. The contract had hit 155.40 cents on May 6, its highest level since January 2017.

May 21 - Daily Cocoa Futures Market Report

After several days of unsuccessfully testing the technical support at the 100-day average GBP 1665, the 2nd month Sep 21 was able to close yesterday just below. Momentum was only found late in the afternoon, some time after opening in New York, after hours of sideways movement in a GBP 10 range and not even four-digit volume. The Sep/Dec spread converged again to a discount of GBP -40. Half of the recent rally has been wiped out in a matter of days, which the industry took advantage of with partial covering. For the correction may follow the pattern of recent months and find its bottom soon. It is considered likely that the corridor between GBP 1615 at the lower end and 1730 at the upper end, which has been in place since mid-January, will continue.

May 21 - India cuts 2020/21 sugar export subsidy by 31.4%   (Reuters)

India on Thursday cut sugar export subsidies by 31.4% for the season that ends on Sept. 30, according to a government order issued by the Ministry Of Consumer Affairs, Food And Public Distribution. Late last year, India, the world's biggest sugar producer behind Brazil, approved subsidies of 5,833 rupees ($79.87) per tonne to encourage cash-strapped mills to export 6 million tonnes of sugar in the current 2020/21 season.

 

May 20 - Daily Cocoa Futures Market Report

After days of consolidation at 2 month highs, the market corrected yesterday and the Sep 21 date made up exactly 50% of the rally seen in the end, in just under two trading days mind you. The Sep 21 broke sharply through GBP 1700 support and traded to lows of GBP 1662, ending the day weak at GBP -37 at GBP 1668. The Sep / Dec 21 spread also lost sharply and traded to a discount of GBP -49 / close GBP -47. Just like the last volatile move up, there are no fundamentals behind yesterday. So back to the old / familiar range, in which we can soon expect further price hedging by the industries.

May 19 - Codex to set standards for oregano, ginger, chilli, basil and cloves (IHSmarkit)

  • New drafts for oregano and turmeric.
  • CCSH set to launch groups for allspice, juniper berry, star anise and vanilla.

 

The Codex committee on spices and culinary herbs (CCSCH) has debated standards on spices and herbs such as ginger, chilli, paprika, basil, nutmeg, cloves, saffron, oregano and basil in its fifth session, held from 20-29 April 2021.

Draft proposals specify product presentation, insect damage, adulteration and microbiological levels, aflatoxins and chemical and physical characteristics such as moisture, volatile oil contents and ash proportion.

The committee members have already made complete drafts for the following listed products: dried ginger (roots, whole, cracked, broken and ground); dried and dehydrated garlic (whole, cracked, broken and powdered); chilli and paprika (whole, cracked and ground) specifying forms of presentation in every country; dried basil (whole, pieces, crushed, rubbed and powdered); nutmeg (whole with shell, whole without shell, broken and powder);  cloves (whole, cracked, crushed and ground); saffron (filaments, cut filaments and powdered).

The committee has added recently drafts for:

  • Oregano (common: ‘Origanum spp. L.’; Mexican: ‘Lippia spp. L’).
  • Turmeric (or dried and dehydrated whole, split, crushed or ground turmeric).

Finally, CCSCH proposed to launch drafts for spices derived from the dried fruits and Berries, such as allspice, Juniper berry and star anise and vanilla.

May 19 - Uganda April Coffee Exports Rose 49% as Weather Boosts Yields (DJ UCDA)

- Uganda's coffee exports jumped 49% on year in April, boosted by maturing plantations and favorable weather conditions across Africa's top exporter, the state coffee regulator Uganda Coffee Development Authority said Wednesday.

- Coffee shipments in April rose to 537,538 60-kilogram bags, up from the 360,293 bags exported in the same month last season. April, the seventh month of the 2020-21 season brought the cumulative coffee exports since the commencement of the season to 3.4 million bags, a 17% rise over 2.9 million bags of coffee exported in the same period last season.

- The Ugandan regulator noted that global coffee prices have seen a positive trend since October, driven by the imbalance between production and consumption, as well as a weaker harvest from Brazil, the world's top producer. "Increasing robusta exports during the month was due to newly planted coffee which has started yielding, supported by favorable weather as well. This was also compounded by a positive trend in global coffee prices which influenced exporters to release their stocks," UCDA said in a report.

- Uganda, which exports mainly the bitter tasting robusta coffee variety, used in instant drinks and blends, expects exports to hit 7.5 million bags this season, from 7 million bags last season.

May 19 - Daily Cocoa Futures Market Report

Monday's firming in London almost leveled off yesterday, which was certainly also favoured by a firmer British pound, because the job figures published yesterday in the UK were positive. Nevertheless, the support of GBP 1700 in the second month Sep 21 could not be broken. In any case, the day's performance only picked up towards the evening with a Sep 21 close of GBP 1703 (GBP -21) . Whether this correction will continue, however, remains questionable, but not ruled out - the still heavily undersold origin should eventually come into the market with large volumes and trigger hedge selling. The market is structurally indecisive, and while a small short position of speculators was still evident in London last week, the New York Managed Money colleagues are long again.

 

May 18 - Raw sugar futures extend losses (IHSmarkit)

Raw sugar futures in New York ended lower as the market extended its retreat from a 2½-month peak of 18.25 cents per pound set last Wednesday (May 12).

The benchmark contract for July delivery ended down 15 points at 16.96 cents per pound, just above the lower end of the day's wide 16.92-17.45 cent range. Second-month October shed 17 points to 17.06 cents per pound and the back months eased between 10 and 15 points. Trading volume declined to 98,366 lots.

Similarly, white sugar futures in London also ended in the red with the most-active August contract falling by USD1.90 to settle at USD453.60 per tonne, in dealings between USD452.30 and USD463.00. Second-month October also dropped USD1.90 to USD454.50 per tonne, while the rest of the board finished with losses between 50 cents and USD1.80. Trading volume was 3,113 contracts.

May 18 - Daily Cocoa Futures Market Report

The cocoa market gave us only a short break in the morning on yesterday's trading day. The Sep 21 recorded lows of GBP 1705 and GBP 1700 support held yesterday. Further covering against short positions pushed the second month up to GBP 1735, where tentative hedging pressure for the near dates prevented a further breakout. The Sep 21 ended the day at GBP +24 at GBP 1726, the highest close in 2 months now. GBP 1740 resistance is getting closer and closer. New York Sep 21 traded high yesterday at $2590 towards the important $2600 level. The origin should be back in the market soon for 21/22.

 

May 18 - Bearish trend in Indian cumin seed prices due to Covid-19 restrictions (IHSmarkit)

The Indian cumin seed fob spot price closed at INR14,000 per quintal (USD195.3/quintal) on 10 May at the Jodhpur market (Rajasthan, North West), unchanged from 12 April, but far from INR14,825/quintal reached on 7 April.

Meanwhile, the spot price was unchanged at INR13,987/quintal between 12 April-10 May at the Unjha market (Gujarat, also North West), being closed from 14 April-9 May.

Futures prices indicate that traders expect a fall in consumption due to new Covid-19 restrictions.

Updated daily futures market prices on India’s National Commodity & Derivatives Exchange were: 

  • Deliveries in April 2021 closed at INR14,000/quintal on 20 April, 5% less than on 22 March.

 

May 18 - Gradual fall in Indian coriander prices ( IHSmarkit )

  • 2% fall in spot prices.
  • 17% increase in exports.
  • Futures prices fell between 4-6% for deliveries between May and August.

The Indian coriander spot price was INR6,837 per quintal (USD97.3/quintal) at Jaipur (Rajasthan, North India) on 17 May, 2% less than on 19 April.

The Kota market price fell by 3% to INR6,921/quintal between 19 April-5 May.

The 2020-21 crop is expected to mirror the previous season, when it reached 940,000 tonnes. Carry-over stocks are falling and the domestic crop is expected to remain firm in Q1 and Q2, according to Olam Spices in its latest market update.

Indian exports increased by 17% year-on-year in volume to 8,390 tonnes in volume and by 14% in value to USD10.0 mln in January-February 2021, according to customs data.

The main importers of whole coriander were Malaysia, Sri Lanka and Nepal, which took 24%, 16% and 14%, respectively, of the total volume.

The updated daily futures market price on India’s National Commodity & Derivatives Exchange (NCDEX) was:

Deliveries in April 2021 closed at INR7,194/quintal on 20 April, INR36 more than on 22 March.

May 17 - Daily Cocoa Futures Market Report

Even if the bridge day on Friday slowed down the rally somewhat, London closed the Ascension week with a 2.7% firming on balance. The new second month Sep 21 tested tentatively the support of GBP 1700 on its second trading day, which also marked the lows of the day, and closed just above at GBP 1702 (-17).  With 17k contracts traded, volume remained rather meager. The focus in London was more on the expired May 21, against which around 72k mts of cocoa were tendered, almost exclusively Cameroon, IVC and Nigeria. Such volume has not been tendered since March 2019. Committment of traders show an opposite speculative picture: in London an expansion of shorts by -2.1k lots (now -11.6k lots net short), in NY in return almost 9k lots of new longs (now 8k lots net long). On balance, a speculative net short position of -3.5k lots. Across all participants 37k lots net long.

May 14 - Market Briefing: Cocoa (IHSmarkit)

  • Ivory Coast’s cocoa arrivals up 6.8% y/y to 1.8 million tonnes
  • Gepex cocoa processing down 7.3% y/y to 42,267 tonnes.
  • Brazil imported 21,623 60-kilo bags (1,297 tonnes) of cocoa, 42% lower w/w

Production

Ivory Coast’s cocoa volumes arriving at its ports were up 6.8% y/y reaching 1.8 million tonnes between October 1 and May 9. In weekly volumes, 23,000 tonnes of cocoa beans were delivered to Abidjan port and 27,000 tonnes to San Pedro between May 2-9 for a total of 50,000 tonnes. This is again higher than the 31,000 tonnes noted in the same period last season.

Meanwhile, for Ghana, its own graded and sealed (G&S) cocoa arrivals stood at 849,266 tonnes by April 29 since the start of the season on October 1. This is up 19.6% from the same period the previous season.

Demand

Gepex, a cocoa exporter group that includes six of the world’s biggest cocoa grinders, showed that April cocoa processing was down 7.3% y/y to 42,267 tonnes.

Ivory Coast’s state power provider will begin rationing electricity after a drought cut hydropower output. The disruption will force Ivory Coast cocoa grinders to run capacity at 50% or less, which could cut grindings by -41% to 25,000 tonnes in May.

Trade

In the last week of April, Brazil imported 21,623 60-kilo bags (1,297 tonnes), 42% lower w/w and down 66% y/y. Cumulatively in the season-to-date, Brazilian imports accounted for 19% of all Brazil arrivals, or 635,060 60-kilo bags (38,104 tonnes).

In Q1, sales of Peruvian cocoa beans totaled USD26 million and made up 1.6% of non-traditional agri-export sales. In March alone, total sales of agricultural exports reached USD479 million, with cocoa beans and cocoa butter making up 1.8% and 1.5% of the share.

Price

Cocoa futures were mostly firm over the last seven days, hitting one-week highs on May 10 with July New York cocoa closing up USD51 to USD2,514 and July London cocoa settling GBP22 higher at GBP1,667. This was mostly spurred by a slump in the dollar index to a 2½-month low which supported gains in most commodities priced in dollars. By Wednesday (May 12) cocoa rallied sharply, with London cocoa at a six-week high on concern that cocoa supplies may fall due to power shortages in the Ivory Coast. July New York cocoa closed up USD51 to USD2,517 and July London cocoa closed up GBP46 to GBP1,698.

In Brazil, after starting the week at BRL207.00–210.00/15-kilo, and declining mid-week, domestic cocoa prices reached BRL200.00–208.00 (USD2,550–2,652/tonne) by May 7.

May 14 - Market Briefing: Sugar (IHSmarkit)

  • Global sugar production in 2020/21 forecast at 186.9 million tonnes
  • World sugar consumption in 2021/22 seen at 183.4 million tonnes
  • EU sugar exports total 65,000 tonnes of sugar in March

Production

Global sugar production in 2020/21 is estimated at 186.9 million tonnes, up from 179.7 million in 2019/20. This means that IHS Markit’s marginal surplus estimate for the 2021/22 season has gotten even smaller, at less than 0.1 million tonnes compared with 0.3 million previously. Meanwhile, the deficit in the current 2020/21 season has been cut to 3.4 million tonnes from 4.3 million in IHS’s previous projection. Production is now seen 0.3 million tonnes higher than before.

Brazil’s sugar production on an October/September basis is estimated to rise to 40.4 million tonnes, raw value, in 2021/22 from 38.8 million in 2020/21 amid an expected recovery in cane crushing in 2022.

Demand

Apparent global sugar consumption in 2021/22 is practically unchanged from IHS’s previous forecast at 183.4 million tonnes (-0.1 million).

EU sugar imports in March reached 64,000 tonnes, down from 120,000 in the previous month and compared with 133,000 tonnes in March last year. This brought total imports in the first six months of 2020/21 to 593,000 tonnes, down from 1.05 million tonnes in the same period a year ago. Total imports fell to 1.7 million tonnes in 2019/20 from 1.9 million in 2018/19.

Trade

EU members exported 65,000 tonnes of sugar in March 2021, down from 70,000 in February and in line with 60,000 tonnes in the same month last year, according to preliminary Eurostat data. This brought total exports in the first six months of 2020/21 (October/September) to 492,000 tonnes, down from 603,000 tonnes in the same period last year. Israel accounted for 22% of the exports, followed by Norway (12%), Ukraine (11%), Albania (8%), Switzerland (8%) and Cameroon (4%).

Price

Raw sugar futures remain strong amid concern over the impact of dry weather on crushing volumes in Brazil's 2021 harvest and a strengthening Brazilian real. The strong real is deterring Brazilian producer selling. New York sugar climbed to a 2½-month high and London sugar rose to a two-week high on Tuesday (May 11), with the nearby July contract advancing by 0.61 cents to 18.10 cents per pound and August white sugar contract rising by $14.40 to $480.50 per tonne. By May 12, sugar did post moderate losses on some long liquidation pressure after the week's rally. July New York closed down 26 cents to 17.84 cents per lb, while August London white slipped by USD8.70 to USD478.10 a tonne.

May 14 - Market Briefing: Spices and Exotics (IHSmarkit)

  • Eastern European honey crops in difficulty.
  • Indian cumin seed exports show strong start to 2021.
  • Arrests made over fraudulent sales of saffron.

Production

Paraguay’s 2020-21 sesame seed crop may total 70,000 tonnes, a volume similar to the previous season.

The 2020-21 Brazilian sesame seed output is expected to treble y-o-y to 127,500 tonnes.

Spanish paprika output fell by 17% year-on-year to 3,200 tonnes on 1,158 hectares, 10% less y-o-y, in the Designation of Origin La Vera (Extremadura, South West) in 2020, after heavy rain and strong winds hit orchards and processing installations last September.

The spring crops of rapeseed honey in Bulgaria, Romania and Hungary are in a poor state due to increasingly dry conditions in recent years which has meant that farmers have grown much less rapeseed.

In addition, the weather is too cold now at 12-15ﹾC which is not conducive for bee activity so the acacia honey crop which is the next one due is also compromised.

Demand

Export statistics indicated continued good demand for sesame seed. Paraguay and Brazil have both recorded an increase in Q1 2021 sales (see Trade below).

China has proved to be a keen buyer of Indian cumin seed in the first two months of this year.

Global demand for honey remains strong as Covid-19 enforced home working has meant that more consumers are having a proper breakfast as opposed to snacking “on the hoof” during their daily commute.

Trade

Paraguay’s sesame seed exports quadrupled to 3,600 tonnes, worth USD5.7 mln in Q1 2021. Brazilian sesame seed sales increased by eight times to 9,040 tonnes, valued at USD9.5 mln.

Mexico’s honey exports closed 2020 at 27,480 tonnes, worth USD67.4 million, 580 tonnes and USD400,000 less than in 2019 despite a sharp rise in global demand during the pandemic.

Indian cumin seed exports reached 33,140 tonnes, worth USD65.2 million in January-February 2021, 31% more year-on-year in volume and 19% more in value. China was the main importer of whole product, taking 17% of the total exported volume.

Europol, Spanish police and customs officers this month arrested 17 people and seized 500 kilos of Iranian saffron sold as Spanish.

Prices

The Indian cumin seed fob spot price closed at INR14,000 per quintal (USD195.3/quintal) on 10 May at the Jodhpur market (Rajasthan, North West), unchanged from 12 April, but far from INR14,825/quintal reached on 7 April.

Mexican honey prices started a strong growth in H2 2020, closing at USD3,835 per tonne cif northwest Europe for orange blossom in December, a third more than in June, and at USD4,630/tonne in April 2021, 21% more than in January 2021.

Eastern European honey prices are already much higher than they used to be and the next development is very much dependent on what happens with Argentine honey prices (the 50 mm grade is currently listed at USD3,990/tonne cif northwest Europe).

May 14 - Market Briefing: Coffee (IHSmarkit)

  • Kenyan coffee production currently at 40,000 tonnes/year
  • Lower consumption drives Illycaffè’s earnings down 25% drop in 2020
  • Japanese green coffee stocks total 2.85 million 60-kg bags at the end of March

Production

Kenya's coffee sector has been on a steady decline in recent years because of low returns and mismanagement. Production currently stands at 40,000 tonnes, with levels peaking at 130,000 tonnes annually in the late 80s. The majority of the smallholder coffee farmers are producing less than 2 kg per tree per year against an annual potential of 35 kg per tree. As a result, the quantity of coffee exported plunged 19% to 2,129 tonnes in January 2021 from 2,639 tonnes in the same month in 2020.

Demand

Illycaffè posted a 25% drop in 2020 core earnings as restrictions put in place to contain the Covid-19 pandemic hit consumption in bars and restaurants, the Italian coffee maker said. Revenues decreased 14% as growing sales of coffee for home consumption - either through supermarkets or online - only partially compensated for the drop in the out-of-home segment. Sales through supermarkets and online were up 30% and 39% last year, respectively. Illycaffè said the US was the market hardest hit by the pandemic, while sales in Asia were recovering, with South Korea posting strong growth.

Trade

Green coffee stocks held in Japanese ports amounted to 2.85 million 60-kg bags at the end of March 2021, up from 2.84 million at the end of the previous month but 49,933 bags below the count at the same time last year, data from the All Japan Coffee Association showed. This was the 12th straight month during which stocks were lower than in the same month last year even though the y/y decline is falling since September. Most of the beans were from Brazil, followed by Central America and Colombia.

Price

Arabica coffee futures slipped from their four-year highs this week. By Wednesday (May 12), coffee prices fell back further from last week's highs on some long liquidation pressure with July arabica coffee closed down 3.60 cents to USD1.465 per lb and July ICE Robusta coffee slipping USD18 to USD1,514 a tonne. On May 6, Arabica coffee futures rose to their highest level since January 2017, boosted by the prospect of a much smaller Brazilian crop this year and expectations that demand may soon begin to rebound. Fund buying was facing little resistance from producer selling, as growers in Brazil remain worried about the size of this year's crop and hold on to new sales.

May 14 - Market Briefing: Dried Fruit and Nuts (IHSmarkit)

  • US peanut plantings were averaging 23% completed.
  • 27.5% increase in California almond exports.
  • Turkish dried apricots landed between the last week of April the first of May.

Production

Yunnan’s (China) provincial government has recently planned to increase walnut production to 2.4 million tonnes by 2023, with a planted area of 43 mln mu (2.9 mln hectares). In 2020, Yunnan’s production was 1.5 mln tonnes.

US peanut plantings were averaging 23% completed on May 9, just two percentage points behind the same stage last year, despite delays in Alabama due to rain.

The Turkish apricot bloom period is finished in the valley area, Malatya, where most apricots are growing. Total new crop is expected to be around 110,000 tonnes.

Demand

California prunes are becoming increasingly popular globally, with sales figures across key international markets showing year-on-year rises. The latest figures from August 2020 to January 2021 show the volume of imports of California prunes grew by 5%, with an increase in value of 6%.

Rising demand for plant-based products is encouraging peanut product launches such as candies, peanut butters and cookies, especially in the US and Brazil.

Trade

The Almond Board of California (ABC) April 2021 Position Report showed that US almond exports last month were 179.83 mln lbs versus 103.49 mln lbs in the same month in 2020. This brought seasonal (August 2020-April 2021) exports to 1.62 billion lbs compared with 1.27 bln lbs in the first nine months of the 2019-20 season, an increase of nearly 28%.

California raisin shipments fell by 13% year-on-year to 22,690 (short) tons this April, bringing seasonal sales (August 2020-April 2021) to 196,550 tons, 4% less y-o-y.

Price

Vietnamese cashew prices ranged from USD3.50- 3.55 per pound fob for WW240 and USD3.10-3.15/lb for WW320 until September/October shipments in the first fortnight of May, according to trading sources.

Turkish dried apricot prices stabilised at USD3,850/tonne fob for No 4 between the first week of May and the last of April, according to IHS Markit.

May 14 - Costa Rican exports of organic pineapples increase by two-thirds (IHSmarkit)

  • March exports of 1,900 tonnes.
  • Annual exports around 15,000 tonnes.
  • Annual conventional exports in 2020 of 1.8 million tonnes.

Costa Rica exported 4,480 tonnes of organic fresh pineapple in the first quarter of this year, compared with 2,680 tonnes in Q1 2020.

In March alone, its exports doubled to nearly 1,900 tonnes.

Most (about three-quarters) of its organic fresh pineapples are sold to the US, but Europe has taken over 1,000 tonnes so far this year, double last year’s tonnage.

The country’s organic fresh pineapple exports were under 8,000 tonnes in 2017 and then suddenly more than doubled to over 17,000 tonnes in 2018 before falling back to under 8,000 tonnes in 2019 and rebounding to nearly 15,000 tonnes in 2020.

It has been suggested that demand is growing for fresh-cut pre-packed pineapple for the US supermarket trade. If this is so, then freight would be relatively easy but it would probably be too expensive for Europe.

Analysis

These volumes are tiny compared with Costa Rica’s exports of conventional fresh pineapple, which are over 190,000 tonnes for Q1 2021 and have been running at between 1.5-2.0 mln tonnes for the last 10 years.

As such, they present no threat to raw material supplies destined for juicing, but as Costa Rica’s government is now restricting the establishment of new pineapple groves for environmental reasons (the country is finding eco-tourism extremely popular and profitable) it would be a smart move to increase margins and profitability by increasing its organic pineapple cultivation. IHSM expects this to happen.

May 14 - Indian pepper industry recovery (IHSmarkit)

  • 31% increase in exports.
  • 19% growth in price.
  • Sri Lanka was the main supplier.

International trade data reveals a robust recovery in India’s pepper network, with exports and prices at high levels and processors triggering whole imports from Sri Lanka due to high prices in Vietnam.

Indian exports reached 3,720 tonnes worth USD15.0 mln, 31% more y-o-y in volume and 39% more in value in January-February 2021.

Crushed sales accounted for 58% of the total volume. The US was the main importer, taking 57% of the total volume

Imports of whole product rose by 45% in volume to 27,360 tonnes. Sri Lanka, Brazil and Vietnam were the main suppliers, accounting for 37%, 22% and 18%, respectively, of the total volume.

However, April data may reveal a strong fall due to the Covid-19 second wave, hitting processing activity and consumption.

Indian prices have gradually risen to USD5,500/tonne exw nw Europe for MG1 grade in April, 19% more than in January 2021.

May 14 - Daily Cocoa Futures Market Report

Despite yesterday's holiday, the upward movement continued. The July 21 traded to highs of GBP 1728, corrected slightly at the end of the day and ended the day "only" with GBP +8 at GBP 1706. The May 21 went off the board at noon with a premium of GBP +4. With an open interest of still over 7000 lots, quite a bit of cocoa will change hands today. With most market participants in holiday mode and accordingly hardly any buyers for the origin, it remains to be seen when the latter will show itself again in the market. Next resistance is seen at GBP 1740 (see the long-term downtrend in the chart), as well as GBP 1800. Despite all this, the upward movement seems to have slowly lost steam. Sep 21 is now the second month. 

May 14 - Tanzania 1Q Coffee-Bean Procurement Fell 60% on Month

  Tanzania's coffee-bean procurement fell 60% on month in the first quarter of 2021, the Bank of Tanzania said Friday.

  The amount of coffee beans procured by the Tanzania Coffee Board fell to 14,125 metric tons in the first quarter from 35,139 tons the previous quarter, the central bank said in its quarterly economic review.

  However, in year-on-year terms, Tanzania's coffee procurement more than tripled in 1Q, from 4,052 tons in the same quarter of 2020.

  "Coffee procurement increased [...] due to high coffee production cycle season, which is attributed to favorable weather conditions in the main coffee regions of Songwe, Ruvuma and Kagera," the central bank said.

  Tanzania produces both arabica and robusta coffee, mainly for export. Tanzanian arabica auctions use New York ICE Futures price index as their benchmark, while robusta prices follow the London-traded contract on ICE.

May 13 - Daily Cocoa Futures Market Report

After a rally of over GBP 120 within a week, the cocoa market seems to continue to face little resistance and currently knows only one direction. July 21 gained GBP 51, at the peak, and broke through the GBP 1700 mark with a high of GBP 1703. Closing price of GBP +46 at GBP 1698 only just below. Yesterday was a holiday in Côte d'Ivoire and Ghana, so little significant resistance was expected from that direction. The July / Sep 21 spread narrowed from GBP -19 to GBP -1. Today's May 21 expiry and the further development of the structure will be decisive in determining the direction.

May 13 - Paraguayan and Brazilian sesame exports closed strongly in Q1

  •     Paraguayan exports rose by four times.
  •     India was the main importer of Brazilian sesame.  

Paraguay’s sesame exports were 3,600 tonnes, worth USD5.7 mln in Q1 2021, four-fold more year-on-year. Brazilian sales increased by eight times to 9,040 tonnes valued at USD9.5 mln. 

Paraguayan and Brazilian sesame expansion has been encouraged by government agreements with Asian countries.

Paraguayan sales are governed by agreements with the Japanese government. As a result, Japan was the main importer, taking a quarter of the exported volume. In addition, European countries are also launching offers for Paraguay’s product due to its high-quality standard. The Netherlands, Germany and Greece took 14%, 10% and 7%, respectively, of the total volume. Paraguay’s 2020-21 crop may total 70,000 tonnes, a volume similar to the previous season. 

Meanwhile, the 2020-21 Brazilian output is expected to treble y-o-y to 127,500 tonnes, after the Indian government authorised imports of Brazil’s sesame in negotiations led by the Brazilian president Jair Bolsonaro in January 2020. 

India was the main importer, accounti
ng for 43% of the total exported volume.


May 13 - Covid-19: Exports tempered fall in 2020 Spanish food and beverage sales

  •     Per capita home consumption increased by 21.1% between March-Dec 2020.
  •     4.4% increase in exports, China becoming the second-largest importer.
  •     UK orders fell by 21% in Q1 2021.


The Spanish food and beverage industry closed 2020 with total revenue of EUR129.8 billion (USD156.9 bln) in 2020, 5.3% less year-on-year despite record home food consumption as a result of Covid-19 restrictions and the large contribution of the horeca sector to Spain’s GNP.

Exports rose by 4.4% y-o-y to EUR33.9 bln.

Home food per capita consumption grew by 19% y-o-y to EUR1,610. March 2020 was a turning point with per capita consumption rising by 21.1% to EUR1,349 from March-December.

Canned fish, juices processed vegetables and fruits, dairy products and spices and sauces were the drivers of growth, rising by 2.7%, 10%, 5.5%, and 13%, respectively.

China became the second-largest importer of Spanish food and beverages, taking 11% of the total revenues, up from 6% in 2019, thanks to meat sales.

Food prices rose by 0.9% y-o-y on average in 2020, after deflationist trends in 2018 and 2019 (-1.4% and -1.6%, respectively). Beverages rose by 0.4%.
Brexit

Orders launched by British importers until March 2021 were 21% less y-o-y due to the initial Brexit impact although FIAB expects that sales reached 2020 levels in December 2021.

May 13 - Starbucks says 25% of its drinks now contain plant-based dairy alternatives, up from 17% last year.
Oat-milk maker Oatly Group AB is driving much of the growth, as Starbucks started offering the alternative recently, coffee chain CEO Kevin Johnson says. Starbucks sales, in part, are prompting the company to invest in new manufacturing plants to keep up with demand, Johnson says at The Wall Street Journal's Future of Everything Festival.

May 13 - Starbucks says nothing about the current political situation in China has changed its plans to keep opening more stores in its second biggest market and hiring employees there. The coffee company is averaging 600 additional stores in China a year, more than a fourth of the 2,200 additions it makes annually. CEO Kevin Johnson says at The Wall Street Journal's Future of Everything Festival that he doesn't expect China to overtake its home US market in store count anytime soon, though.

May 12 - Daily Cocoa Futures Market Report

Two days before the May 21 expiry in London, all eyes were on the nearby structure. Movement was mainly in the near May / July 21 spread, which traded in a range of GBP 19 (level to GBP -19). As of yesterday's close, May 21 still has over 11k lots of open interest, with minimal activity in the grading space. July 21 was under selling pressure from the origin yesterday, this was absorbed by covering against the speculative short position. Closing price July 21 GBP -15 at GBP 1652. After the market's rise of GBP 90 since last Thursday, the structure also changed in the further terms. The July / Sep 21 spread narrowed from GBP -29 to GBP -14, and the Sep / Dec 21 spread narrowed from GBP -49 to GBP -20. Not entirely surprising in a rally, but the structure of the market and the associated spec line-up should continue to be watched closely.

May 11 - Daily Cocoa Futures Market Report

The massive reduction of managed money longs in New York and a weak US$ also ensured another firm trading day for its little sister in London. The July 21 in London traded at highs of GBP 1671 and only found significant resistance at the 200-day moving average there. Close: GBP +22 at GBP 1667. The origin was cautious with selling in the market, but should soon do so more in light of the continued low pre-sales. With 3 days to go, the May / July 21 spread traded in an impressive range of GBP -29 to GBP +5 (close GBP -19). Arrivals in Côte d'Ivoire are at 1.896 mt (+6.8%) as of end-April. Purchases in Ghana are up 19.6% and the total harvest is forecast at 950,000mt. Last but not least....Nigeria announced a harvest forecast of 320,000mt, last season's estimate was 250,000mt.

May 10 - Daily Cocoa Futures Market Report

It took two firm trading days on Thursday and Friday to catapult the market back to the old range of late April around GBP 1640. New York, driven by a weak US$, was the driver on Friday afternoon. London involuntarily followed suit on light volume and the July 21 traded to highs of GBP 1650. Closing GBP +33 at GBP 1645. Commitment of Traders as of 04.05.21 show a notable shift in position in NY. Managed Money "only" liquidated 2,473 lots of its longs, but built up a considerable 11k lots of new shorts. Managed Money now has a speculative short position of 10,239 lots on both markets. In net terms, both exchanges still have a combined long position of 26,909 lots.


May 07 - IHSmarkit Market Briefing: Dried Fruit and Nuts

  • The 2021 South African macadamia crop is expected to rise by 18% thanks to abundant water supply.
  • 23% increase in US pecan exports.
  • Rise in Spanish organic almond prices after frosts hit non-irrigated orchards.

 

Production

The 2021 South African macadamia output is expected to reach 57,834 in-shell tonnes (3.5% moisture content), 18% more year-on-year, thanks to favourable weather in main origins, according to the South African Macadamia Association (SAMAC). This promising outlook is launched after SAMAC revealed that the 2020 production fell by 17% y-o-y in 2020 due to pests and drought.

The 2021-22 crop is estimated at 750,000 in-shell tonnes, according to trading sources.

Dry and warm weather has triggered peanut plantings in most US growing states.

Demand

Chinese demand for US pecans is lifting sales and cutting in-shell stocks, commercial data reveals.

China’s high demand for peanut oil and candies from the Covid-19 pandemic onwards is encouraging India, Argentina, Brazil, the US and Nicaragua to expand their acreages.

Trade

Global sales of US pecans were 17.1 million in-shell basis pounds this March, 14.2% more year-on-year, bringing seasonal (September-March) exports to 59.9 mln lbs, 23% more y-o-y.

The Japanese Ministry of Health, Labour and Welfare (MHLW) has suspended a mandatory aflatoxin inspection regime imposed on walnuts from the US and other exporting countries on 1 April, the USDA reports in its latest update. This inspection requirement started in 2004, requiring all imports to be checked.

India’s Agricultural Produce Marketing Committee (APMC) has temporarily suspended peanut trading activities due to the new Covid-19 outbreak.

Container shortages due to abandoned containers in wrong ports and rising prices have boosted premium-service prices just when China is revealing a robust recovery, forcing delays and bottlenecks in US ports.

Price

US pecan prices are stable at USD12,200/tonne cif UK for halves and USD8,021/tonnes for pieces although they may rise if Chinese purchases are high in Q2.

Spain’s wholesale organic almond prices reached EUR7.80 per kilo (USD9.37/kg) in the week ending on 29 April, up 10 cents month-on-month and mirroring levels reached in January.

May 07 - Market Briefing: Sugar 

  • Belarus’ beet sowing 92% complete
  • Ukraine purchased 26,200 tonnes of raw cane sugar under 260,000 tonnes duty-free quota
  • Brazil’s sugar cane crush down 5% y/y to 576 million tonnes in 2021/22

Production

Belarus’ beet sowing was 92% complete as of May 5 corresponding to 83,300 hectares, behind last year’s level of 86,200 hectares. The total sugar beet area is projected to drop to 90,500 hectares in 2021 against 91,500 hectares in the previous year.

India’s sugar mills produced 824,000 tonnes of sugar, white value, in the second half of April, below 984,000 tonnes in the same period last year, Indian Sugar Mills Association (ISMA) data shows. India’s total sugar output totalled 30 million tonnes in April, up from 26 million tonnes produced in the same period last year.

In mid-April, Mexico’s National Sugar Council (CONADESUCA) trimmed its sugar output outlook for the current 2020/21 season by a further 197,000 tonnes to 6 million tonnes, due to a lower harvest area (795,000 ha against 805,000 ha in the previous forecast) and a decrease of the cane yield (66.02 tonnes per ha against 66.94).

Demand

Ukraine has recently purchased its first shipment of raw cane sugar under a duty-free quota of 260,000 tonnes. Over 26,000 tonnes arrived in Ukraine as of May 5 priced at USD480 per tonne, according to the Economy Ministry.

Brazil’s sugar cane crush in the Centre/South region is forecast to decline by 5% y/y to 576 million tonnes in 2021/22 due to dry weather, local consultancy JOB Economia reported.

Trade

Chinese trader, Honors Commodity, is expected to receive raw sugar at the expiration of the May contract on the ICE exchange, according to Reuters. Honors Commodity will receive 1,200 lots of raw sugar, or around 61,000 tonnes, to be loaded in Brazil, on a total of 11,351 lots (576,660 tonnes).

Prices

Raw sugar futures in New York posted a second consecutive day of strong gains with the benchmark July contract adding another 41 points to settle at 17.53 cents per pound, just below the upper end of the day's 17.18-17.58 cents range. The contract had hit 17.79 cents per pound last Tuesday, the highest level for a most-active contract since the end of February.

White sugar futures in London also posted further gains with the most-active August contract rising by USD11.00 to USD460.80 per tonne.

May 07 - IHSmarkit Market Briefing: Spices and Exotics 

  • 10% fall in Indian turmeric crop.
  • US demand for honey is fuelling Brazilian and Argentinian sales.
  • Fall in domestic Indian chilli prices.

 

Production

The 2020-21 Indian turmeric crop may fall by 10% year-on-year to 939,000 tonnes, due to lower cultivation following falling prices between Q2-Q3 2020.

Indian chilli stocks may total 490,000 tonnes, when 70% of the domestic crop has been harvested. The harvest is set to conclude in May.

The government of French Polynesia has launched a bill to organise Tahiti’s vanilla industry. The 2019 Tahiti vanilla crop reached 30 tonnes, 6% less year-on-year and very far from a record output of 200 tonnes in 1949, according to FAO data. Traders claim that there is no control for processing activity, mirroring adulteration and maturity problems in Papua New Guinea and Indonesia.

Demand

US demand for honey is still high as Argentinian and Brazilian export data reveals.

New Covid-19 outbreak and partial lockdowns have reduced domestic demand slowed shipments to China and Bangladesh, say trading sources.

Trade

Peruvian ginger exports rose by 32% year-on-year in volume to 9,940 tonnes and by 56% in value to USD26.3 mln in Q1 2021, after record international sales of 51,120 tonnes, worth USD107 mln, in 2020, up from 23,830 tonnes valued at USD42 mln.

Argentina’s honey international sales rose by 4% year-on-year in volume to 16,170 tonnes and by 49% in value to USD52 million in Q1 2021. The US was the main importer, accounting for 68% of the total volume.

Brazilian honey exports doubled y-o-y in volume to 13,700 tonnes in Q1 2021, and tripled in value to USD45 mln,. The US was also the main importer, accounting for 81% of the total volume.

Prices

International honey prices eased in March. Argentinian prices averaged USD4,218/tonne cif nw Europe in April, USD20 less than in March. Brazilian prices were USD3,833/tonne for organic in April, 3% less than in March.

Wholesale chilli prices in the Guntur market were on 12 April: INR120 per kilo (USD1.61/kg) for S4, 1% less month-on-month; INR148/kg for US 341, 6% less; and INR139/kg for Indam, 5% less.

May 10 - Tanzania Coffee Sales Hit $136.4 Mln in Season to May 7

  Tanzania sold 69,237.3 metric tons of coffee beans from the beginning of the marketing season until May 7 worth a total value of $136.4 million, the Tanzania Coffee Board said Monday.
  During the period, Tanzania sold a total of 20,571.2 metric tons at weekly auctions, 48,394.1 tons through direct exports and 272.1 tons for local roast, the board said.
  The coffee sales by variety were mild arabica at 28,408.0 metric tons, hard arabica at 2,122.2 tons and robusta at 38,707.2 tons.
  The marketing year runs from July 2020 to June 2021. In the prior season, Tanzania sold a total of 92,396 tons of coffee beans, missing an earlier estimate of 100,000 tons, according to the board.
  Tanzania, which produces both arabica and robusta coffee, is Africa's fourth-largest coffee producer after Ethiopia, Uganda and Ivory Coast.

May 07 - IHSmarkit Market Briefing: Coffee

  • Colombian coffee production falls for fifth straight month.
  • EU coffee consumption hit by Covid pandemic.
  • Arabica coffee futures rise to highest level in more than four years.

Production

Colombia produced 810,000 60-kg bags of coffee in April 2021, up 9% from 744,000 produced in the same month last year. This was the fifth straight month with higher output than in the same month last year. Total output in the first seven months of 2020/21 (October/September) is up 2.9% at 8.393 million bags from 8.156 million last year. Meanwhile, the International Coffee Organization (ICO) has revised its global production estimate for the current coffee year downwards, owing to Brazil’s smaller 2021/22 Arabica crop. Total production in coffee year 2020/21 is estimated to rise by 0.5% to 169.63 million bags, with Arabica production increasing by 2.6% to 99.42 million bags.

Demand

EU coffee imports in 2020 fell 3.2% to 53.348 million bags from the all-time high of 55.120 million 60-kg bags hit in 2019. Yet, this was still the second-highest level ever. The year 2020 has been a challenging one for the world of coffee as the Covid-19 pandemic affected consumption and trade patterns. For the EU this came along with a notable drop of green coffee imports by 3.5% and an even steeper drop of R&G imports by nearly 15% whereas soluble coffee imports rose by 7.7% year-over-year. Given that the coronavirus pandemic-related lockdowns are still dominating daily life, a full recovery cannot be expected this year. While mass vaccinations are now taking place and coffee shop operators are adapting with new trading formats, a full recovery should not be expected before 2022.

Trade

Brazil’s exports of green coffee in April 2021, the first month of the new 2021/22 crop year, totalled 207,170 tonnes (around 3.453 million 60-kg bags), up from 165,083 tonnes (2.751 million bags) in the same month one year ago. Figures for the previous month show that members of the International Coffee Organisation (ICO) exported 11.944 million 60-kg bags of coffee in March 2021, up modestly from 11.661 million in the same month last year, ICO data show. This brought total exports in the first six months of 2020/21 (October/March) to 65.402 million bags, up 3.5% from the corresponding period a year ago. Arabica exports are up 7.9% so far this season at 41.814 million bags, while robusta shipments were 3.5% lower at 23.588 million.

Price

Arabica coffee futures on ICE rose to the highest level in more than four years, boosted by the prospect of a much smaller Brazilian crop this year and expectations that demand may soon begin to rebound. Moreover, protests in Colombia are hurting the flow of coffee to export markets. On 6 May, the benchmark July arabica contract settled up 4.45 cents at 154.30 cents per pound, in dealings between 148.80 and 155.40 cents. The intraday high was the market's highest level since January 2017. The benchmark July robusta contract settled up $9 at $1,547 per tonne. Vietnam’s domestic coffee prices inched up on upbeat global prices and tight supplies but Indonesia’s Sumatran robusta beans were offered with lower premium this week as more supplies from the ongoing harvest continue to arrive.

May 07 - IHSmarkit Market Briefing: Cocoa

  • IHS Markit revises its 2020/21 global cocoa grind and production estimates
  • Confectionary demand stages a demand recovery in emerging markets
  • Ample bean stocks pressure cocoa butter prices in April
  • Brazil’s total cocoa arrivals up 30% y/y in the second-to-last week of April

Production

IHS Markit has raised its estimate for Ivorian cocoa production to 2.22 million tonnes, as the global balance is now set to finish with a surplus of 99,000 tonnes in 2020/21, up from 92,000 tonnes forecast previously. Global production is now also placed at 4.875 million tonnes from IHS’s prior estimate of 4.843 million tonnes. IHS Markit has also raised the production forecast for Ghana by 10,000 tonnes to 850,000 tonnes.

Demand

Following fresh grinding statistics from key regions, IHS Markit also revised its cocoa grind estimate which in 2021 are now expected to rise by 1.2% compared to a 0.3% decline expected in earlier forecasts. Despite the ongoing Covid-19 pandemic, demand begins to recover. First quarter 2021 grinding numbers combined grew by 0.6% compared to the same period last year. This, along with the increased surplus, has also resulted in changes for the ending stocks to grind ratio, now equal to 38.7% in 2020/21, up from 37.1% in 2019/20.

In its Q1 financial results, Mondelez noted confectionary demand growth of 10% y/y in emerging markets and 7% for the last two years. This was based on strong growth in Brazil, India, China and high-single digit in Russia.

Trade

Brazilian cocoa imports of 37,242 60-kilo bags (2,235 tonnes) in the second-to-last week of April, led to total arrivals of 68,618 60-kilo bags (4,117 tonnes), a rise of 34% w/w and 30% y/y.

Price

Cocoa butter prices declined in April, as expected, to 262 cents per pound, down 12.3 cents, mainly due to ample bean stocks. Cocoa powder prices were again unchanged at 95 cents per pound, with powder anticipated to trade at the same level with an upside price risk.

Brazilian cocoa prices started last week (April 26) at BRL218.00–222.00/15-kilo and by the end of the week, closed at their lowest level since November 2020, at BRL210.00–211.00 (USD2,575–2,587/tonne), owed to the New York futures price collapse.

 

May 07 - Daily Cocoa Futures Market Report

Little selling pressure from speculators gave the market time to recover a little yesterday. Further industry price hedging led to a short-lived correction and the July 21 traded to highs of GBP 1622, closing GBP +13 at GBP 1612. Next Thursday the May 21 goes off the board in LDN. In the grading room yesterday 2 old BDU's Cameroon (both approved) and 4 new BDU's Nigeria (1 was rejected) were under the knife. The May / July 21 spread converged from GBP -35 to GBP -22.

May 07 - Weekly Int'l Pepper Market Report, Week 3-7 May 2021 (IPC)

- Market showed a mixed response. In local market, Malabar black pepper was reported stable, averaging at USD 5,019 per Mt. Indonesia black and white pepper were reported with an increase of 1% respectively when compared to the previous week, averaging at USD 3,299 per Mt for black pepper and USD 6,077 per Mt for white pepper. The increase of Indonesian price could be contributed to the strengthening of Indonesian Rupiah against the USD Dollar (IDR 14,398 @USD 1), recording a 1% appreciation. Malaysia black and white peppers were reported stable, averaging at USD 3,293 per Mt for black pepper and USD 4,931 per Mt for white pepper. Furthermore, Viet Nam farm gate price of black pepper was reported with 1% deficit as compared to the previous week, averaging at USD 2,666 per Mt. Whilst, Viet Nam white pepper was reported stable, averaging at USD 4,303 per Mt. Sri Lanka black pepper was reported with 1% deficit as compared to the previous week and was traded at an averag e of USD 3,374 per Mt.
- International market also showed a a mixed response as India black pepper was reported stable, averaging at USD 5,291 per Mt. Indonesia black and white pepper were reported with an increase of 1% respectively when compared to the previous week, averaging at USD 3,930 per Mt for black pepper and USD 7,006 per Mt for white pepper. Malaysia black and white peppers were reported with an increase of 1% respectively as compared to the previous week, averaging at USD 4,692 per Mt for black pepper and USD 6,196 per Mt for white pepper. Furthermore, Viet Nam black pepper 500 g/l, 550 g/l and Viet Nam white pepper were reported stable with a slight decreasing trend, averaging at USD 3,595 per Mt, USD 3,635 per Mt and USD 5,330 per Mt respectively.

May 06 - Daily Cocoa Futures Market Report

The previous day's losses (-29 GBP) were mostly recovered yesterday, although the second month of July 21 could not hold the daily highs of GBP 1604 and finally failed at the resistance of GBP 1600. However, this had been tested several times by level-related price cover buying, which however faced too much headwind in renewed speculative selling. Close July 21 at GBP 1599 (GBP+21). At no point did quotes move into negative territory. Is this now the trend reversal or rather the correction of the crash from the end of last week? The markets continue to move in oversold territory, and industrial price cover remains at around 7 months, but could well be extended a bit further at these levels. So both bullish indicators, although the ultimate resistance of the early March 21 highs would be around GBP +170 away.

May 05 - Daily Cocoa Futures Market Report

Right at the start, the negative momentum in London from last Friday continued. However, price covering by the industry provided initial support at levels just below the GBP 1600 mark. This did not hold for long and further selling pressure (long liquidations and new shorts) from NY put further strong pressure on prices. July 21 traded at lows of GBP 1575 and is only GBP 50 away from last year's lows (mid July), there second month traded to lows of GBP 1525. Close July 21 GBP -29 at GBP 1578. Arbitrage continued to approach, this trades at a discount LDN / NY of GBP -97 / July21. The movements of the last 3 days will certainly be seen in the new Comittment of Traders Report next Friday. Both markets are now heavily oversold. Ivory Coast Exports Oct-March Beans -8.3% / Semi-finished +10.3%

May 05 - Fall in Indian turmeric price (IHSmarkit)

  • Second Covid-19 wave and partial lockdowns are slowing sales.
  • Slight fall in spot prices.
  • 37% increase in exports.
  • Futures prices fell from 5-9% for deliveries between May and August.

The Indian spot fob turmeric price closed in April at INR7,646 per quintal (USD103/quintal) at the Nizamabad market (Telangana state, South Central) on 28 April, down from INR7,726/quintal on 26 March.

Harvesting is in full swing and partial lockdowns are slowing domestic trade.

There have been strong international sales and a 2020-21 crop estimate 10% lower than the previous crop (939,000 tonnes), due to lower cultivation as a consequence of falling prices between Q2-Q3 2020. As a result, prices are expected to be steady in the mid-term.

The country’s global sales started 2021 with 12,200 tonnes, worth USD14.2 million, 37% more year-on-year in volume but 2% less in value.

The main importers were Bangladesh and Morocco, taking 20% and 12% of the total volume.

Deliveries in April 2021 closed at INR7,928/quintal on 20 April, 4% less than on 23 March.

May 04 - Thai pineapple raw material price drops in April (IHSmarkit)

The Thai pineapple raw material output in April reached over 100,000 tonnes, with some industry sources estimates closer to 110,000 tonnes. “There was the Songkran holiday that took at least four days of harvest out, so this figure could be slightly lower,” one highlighted.

The raw material price has fallen from THB9.0/kg (USD0.28) in March to around THB7.0/kg, sources reported on 30 April. Premium fruit quality is rated slightly higher than THB7.0/kg, though most of the fruit is rated slightly lower than THB7.0/kg.

The peak of the summer harvest is running between April-May, “From late May, the peak of the season will be over and daily tonnage will be down again […] The harvest has progressed at a very quick pace this month because the growers’ approach has been to harvest as much fruit as possible before raw material prices start softening, as this is the peak of the season,” a second source noted.

“In addition, Songkran harvest disruptions eventually resulted in more green immature fruits, as farmers prematurely harvested before the holiday period. Immature fruit is likely to result in more volumes of lower quality, only suitable for standard grade and juice, which will slow down canneries’ recovery.”

Raw material is flowing and availability changes week by week, with fruit prices fluctuating accordingly.

A Bangkok-based pineapple source highlighted: “A positive fact is that we are getting more rainfall than in a normal year during this peak of the season.”

May 04 - Indian guar gum price recovery (IHSmarkit)

The Indian guar gum spot price was INR6,228 per quintal (USD83.0/quintal) at the Jodhpur wholesale market on 26 April, 4.2% more than on 30 March.

Indian guar gum exports were 15,120 tonnes, worth USD19.1 million in January 2021, and a third less year-on-year in volume and 42% less in value. The US, Germany and Russia accounted for 34%, 11% and 8%, respectively, of the total exported volume.

Deliveries in April 2021 closed at INR6,367/quintal on 20 April, 8% more than on 22 March.

May 04 - Daily Cocoa Futures Market Report

In New York, without the participation of the London market, it initially looked like the expected correction of Friday's losses. But the US$ 30 firmer opening, also favoured by a weak US$, marked the day's highs at the same time. However, there was hardly any buying interest. Without any support, the market came under significant pressure towards the evening, triggering system stops and thus further selling. New York found new lows last traded five and a half months ago with a close of US$ 2369 basis Jul21. Today's opening in London is calculated at GBP -20, below support at GBP 1600. While farmers in Côte d'Ivoire are concerned about the continuing mid-crop due to erratic rains, last week's arrivals there are at 50k mt vs just under 19kmt last year. Total arrivals for the current crop thus stand at 2.02m mt.

May 04 - Ivory Coast 2020/21 cocoa port arrivals seen at 1.896 mln T by May 2 

Cocoa arrivals at ports in top grower Ivory Coast reached 1.896 million tonnes between Oct. 1 and May 2, exporters estimated on Monday, up 9.2% from 1.737 million tonnes over the same period last season. About 24,000 tonnes of beans were delivered to Abidjan port and 26,000 tonnes to San Pedro between April 26 to May 2 for a total of 50,000 tonnes up from 19,000 tonnes during the same week last season.

 

May 03 - Daily Cocoa Futures Market Report

At last, one could say. After the official opening in New York at 2 pm, prices came under heavy pressure. Fresh shorts, as well as further selling of the longs, sent the July 21 down to lows of GBP 1606. By the end of the month, the July 21 posted a loss of GBP -47 and ended the day at GBP 1607. New York lost triple digits and the July 21 ended the day at $ -117 to $ 2382. The industry was timid in showing up with price hedges in the market, providing little significant support. London remains closed today for the May Day holiday, giving an extra day to sort out respective positions. Commitment of Traders show a net, not surprising, expansion of the long position from 3,550 lots to 38,080 net long. The key factor here was a tentative expansion of price hedging. Managed Money liquidated further (3,681 lots) to 7,959 lots long.

Apr 30 - IHSmarkit Market Briefing: Spices and Exotics

  • Severe drought in the Rio Grande Valley is damaging chilli plantations in the US and Mexico.
  • 75% growth in Guatemalan cardamom exports.
  • Bullish trends in pepper prices as the Vietnamese harvest has been delayed by one month due to unfavourable weather.

 

Production

The Vietnamese pepper harvest is delayed by one month due to heavy rains. The global pepper crop is likely to fall by 10% year-on-year to 485,000 tonnes although carry-over stocks may still exceed the demand.

The Spanish garlic acreage has risen by 6% year-on-year to 28,000 hectares thanks to high prices in the previous season. As a result, the crop may reach a record level.

Brazil’s garlic acreage has increased to 14,000 hectares in 2020, almost 50% more than six years ago.

India’s 2020-21 turmeric crop estimate is 10% lower than the previous crop (939,000 tonnes), due to lower cultivation as a consequence of falling prices between Q2-Q3 2020.

Argentina’s 2020-21 honey harvest finished this March with a crop of around 71,000-72,000 tonnes, similar to the previous season.

Demand

Home food consumption is still strong as sales data from large specialists in spices and essential oils reveal, encouraging M&A.

Olam Food Ingredients (OFI) is acquiring US private label spices and seasonings manufacturer Olde Thompson for USD950 million. The Spanish essential oil manufacturer Iberchem, owned by the British company Croda, has bought the French flavour firm Parfex for EUR45 million (USD53.6 mln). The US company Sensient Technologies Corporation, listed on the New York exchange, has acquired New Mexico Chilli Products for an undisclosed sum.

Trade

The EU has tightened controls on Brazilian pepper following what the regulation says was a “high frequency” of non-compliance with salmonella requirements and the large number of notifications about contamination to the EU’s Rapid Alert System for Food and Feed (RASFF) in 2019 and in the first semester of 2020.

Argentina’s international honey sales rose by 7% year-on-year in volume to 9,380 tonnes and by 4% in value to USD20.3 million from January-February 2021, confirming a strong start of the year.

Guatemala’s cardamom exports reached 14,000 tonnes, worth USD295 million, from January-February 2021, three quarters more year-on-year in volume and 27% more in value.

Prices

Vietnamese pepper prices rose by 17% month-on-month to USD3,900/tonne for min 550g/l cif nw Europe in April.

Brazilian organic honey prices were USD3,860 for organic in April, down from USD3,960/tonne in March.

Guatemalan cardamom prices have been stable at USD28,000/tonne cif since February.

Sudan’s gum Arabic prices are steady month-on-month at USD2,250 per tonne fob for Grade 1 and the sesame prices at USD1,200-1,250 per tonne fob Port Sudan for 99.1% cleaned product in April despite rising demand as shipments are slowed due to Port Sudan congestion.

Apr 30 - IHSmarkit Market Briefing: Cocoa

  • Brazil to increase cocoa output by 60,000 tonnes over next four years
  • EU Q1 2021 cocoa grinding -3% y/y, US +2%, Asia up 3%
  • Cocoa butter prices down by 11% in Europe and US

Production

Brazil is set to increase its production of cocoa beans by 60,000 tonnes over the next four years. Brazil is the 7th-largest global cocoa producer, with an average annual production of 250,000 tonnes, according to the Brazilian Institute of Geography and Statistics (IBGE). IHS Markit placed 2019/2020 output at around 200,000 tonnes, with estimates for 2020/21 recently lowered to 145,000 tonnes.

Total Colombian cocoa output in January and February, surpassed its highest volume in 10 years. During the first two months of 2021, cocoa production totaled 15,428 tonnes, a 54% y/y increase compared to the 10,046 tonnes produced during the same period in 2020, and also almost double the volume seen back in 2012, where January and February’s total production reached 8,416 tonnes.

Demand

European Q1 2021 cocoa processing figures fell to their lowest level in four years for the quarter, dropping by 3% from a year earlier to 357,815 tonnes. In the US, grinding data hit a two-year high, reaching 117,956 tonnes, up by 2% from Q1 2020. Cocoa processing in Asia increased by 3% from a year earlier in its Q1 2021 figures, volumes totaled 213,858 tonnes; the highest Q1 grindings seen for at least a decade.

Hershey raised its 2021 full-year financial outlook to 4-6% growth, signaling optimism for a global cocoa demand recovery. The company also reported 12.7% sales growth for Q1, with Mondelez also seeing its organic revenue up 3.8% on elevated consumption of chocolate and biscuits amid Covid-19 lockdowns. Swiss chocolatier, Barry Callebaut, did see its half-year sales volumes decline, though the company still noted signs of a continued recovery.

Trade

Brazilian exports of cocoa and its by products totalled 6,731 tonnes in March, increasing 9% y/y the Secretariat of Foreign Trade (SECEX) reported. Revenue of exports were almost stable (+1%) at USD21 million. Cocoa butter (35% of the total) and powdered (31%), were the main products shipped by Brazil, with chocolate exports reaching 3,333 tonnes and USD12 million in March.

In terms of imports, Brazil shipped in 8,012 tonnes of cocoa beans, 3,918 tonnes of cocoa powered, 248 tonnes of cocoa liquor and 46 tonnes of cocoa butter in March, totalling USD31 million. Chocolate purchased by Brazil hit 1,825 tonnes and USD12 million in the same month.

Price

Cocoa prices have mostly been in a slump during April, hitting multi-month lows for contracts in both New York and London. On April 9th, New York cocoa fell to a five-month low of USD2,354 and London cocoa slipped to a four-month nearest-futures low of GBP1,598. Since then, its mostly been a case of sideways trade with push and pull factors; abundant supply coupled with, at times, signs of a demand recovery.

Meanwhile, cocoa butter prices slipped 11% y/y in both Europe and the US during March 2021, said the ICCO. Values shrunk from USD5,834 to USD5,218 per tonne in the US, while in Europe they fell from USD5,701 to USD5,096 per tonne. Cocoa powder prices in the US were up by 56% y/y, from USD2,573 to USD4,007 per tonne in March 2021. Over the same period in Europe, powder prices jumped by 35% from USD2,408 to USD3,248 per tonne.

Apr 30 - IHSmarkit Market Briefing: Sugar

  • Global sugar market is set for a surplus of 0.3 million tonnes in 2021/22
  • Global consumption is projected to rise about 3.4 million tonnes
  • Indian sugar exporters have contracted to export 5.2 million tonnes
  • New York futures hit fresh two-month highs

Production

The global sugar market is set for a surplus of 0.3 million tonnes in 2021/22. Global sugar production in 2021/22 may rise by 7.9 million tonnes to 187.3 million tonnes from this season’s 179.4 million. The sharpest increase in output in 2021/22 is seen in Asia, where sugar production is projected to rise by 3.7 million tonnes to 70.8 million, due to a sharp recovery in Thailand and India. An increase by 1.5 million tonnes to 47.7 million could be on the cards for South America in 2021/22, as the cane crush in Brazil’s Centre/South in 2022 is seen recovering.

Sugar mills in Brazil’s Centre/South concluded the 2020/21 harvest with 605.46 million tonnes of sugar cane processed, an increase of 2.6% over the 590.36 million registered in 2019/20, Unica data showed. The final total is within expectations, as IHS Markit had raised its total crush estimate to 605 million tonnes, from 600 million previously.

Demand

Global consumption is projected to rise by 3.4 million tonnes (1.9%) y/y to 185.5 million tonnes, amid a global economic recovery, with only 1.1 million tonnes growth projected for the current sugar year. Asian sugar consumption in 2021/22 is expected to rise to a record 89.7 million tonnes, up from 87.4 million the year before. European sugar consumption is seen recovering somewhat to 30.7 million tonnes in 2021/22, after falling to 30.4 million this season from nearly 30.8 million a year ago. China's sugar imports are seen falling back somewhat to 5.4 million tonnes in 2021/22 after surging to 5.8 million tonnes this season from just 4.5 million in 2019/20

Trade

Indian sugar exporters have contracted to export 5.2 million tonnes of the commodity until now and could well be on the way to ship out more than the 6.0 million tonnes target set for the current 2020/21 (October/September) season, said the All-India Sugar Traders Association (AISTA). Some 3.3 million tonnes have been physically exported so far. By April 15, Indonesia accounted for 38.5% of the total, followed by Afghanistan and Sri Lanka. An additional 303,000 tonnes of sugar is in transit and delivered to port-based refineries.

White sugar imported into Russia at zero duty is only to be used to supply the domestic market or for the production of sugar-containing products, its government stated. The volume of duty-free sugar imports into Russia until 1 October 2021 will be 350,000 tonnes. Ukraine proposed reducing the import duty on 120,000 tonnes of sugar imports from 50% to nil. Duty-free imports shall be allowed until 1 October 2021.

Price

Raw sugar futures have been trading higher for a third week in a row. New York futures hit fresh two-month highs on April 26, with the July contract adding 21 points to settle at 17.09 cents per pound, after rising as high as 17.18 cents per pound in the course of the session. By April 27, a buying frenzy was pushing raw sugar towards 18 cents, as the May contract finally settled up 77 points, at 17.94 cents per pound.

The market continues to be supported by concerns about global sugar supplies and fund buying. The stronger Brazilian currency poses an upside risk for sugar prices as well. However, the ravaging second wave of COVID-19 in India is expected to hit local demand, which could increase domestic stocks and may put downward pressure on local prices.

Apr 30 - IHSmarkit Market Briefing: Meat and Livestock

  • Beef production falling further in Australia and EU.
  • Beef consumption falls to 18-year low in Argentina as exports rise.
  • Chinese meat imports break million tonne barrier in March.
  • Pork prices rebound in Brazil, chicken moves higher in Poland.

Production

With global beef supplies already tight, figures released this month point to further declines in Australia and the EU. As Australian producers rebuild their herd and take advantage of improved seasonal conditions, cattle slaughter is expected to fall 11% from 7.2 million head in 2020 to 6.4 million head in 2021. Preliminary data shows that EU beef production in January 2021 was down 15% y/y, and although that gap will close as the year progresses, there is a general expectation that production volumes this year will be down on 2020. In Ireland, new forecasts suggest supplies of slaughter-ready cattle will fall by 100,000-120,000 head during 2021.

Demand

Chinese demand helped drive up Argentine beef exports in the first quarter of this year, while volumes consumed within Argentina itself fell to their lowest levels for 18 years. Argentina exported 146,000 tonnes of unprocessed beef in January-March 2021 – an increase of 22% y/y. Three quarters of this total went to mainland China. The Argentinian government claims the surge in exports is starting to make beef unaffordable to local consumers. This is rejected by the head of Argentina’s beef industry chamber Ciccra, who says lower domestic demand is mainly due to a drop in purchasing power during the pandemic.

Trade

China’s meat imports reached record levels in March driven by sharp increases for pork and sheepmeat. Total imports of meat and offal rose by 12% y/y to surpass one million tonnes for the first time ever in a single month. These purchases were worth more than USD3.2 billion – an increase of 4% when compared to March 2020. The overall increase was driven by higher Chinese demand for pork, imports of which jumped by 17% y/y to 451,250 tonnes. More than a third of all March pork imports came from Spain, which has taken up much of the slack left by China’s ban on German pig products. Chinese imports of Spanish pork reached 153,000 tonnes in March – more than twice the amount imported in the same month last year.

Prices

A dramatic turnaround in Brazilian pork markets saw domestic prices rise by more than 40% in April. Values have been lifted by another surge in purchases from China, along with improved demand in Brazil itself. In Paraná state, wholesale pork prices reached BRL11.90 per kg (USD2.18/kg) on April 22 – up from BRL8.40 per kg at the start of April. Meanwhile in Europe, pork prices continued to rise in Spain and Denmark this month, but eased back in Germany, where processors are still unable to export to China. Meanwhile, broiler chicken prices are rising in Poland where as many as 10 million birds have been lost to avian flu since the start of this year.

Apr 30 - IHSmarkit Market Briefing: Coffee

    Colombia produced 1 million 60-kg bags of coffee in March
    US coffee imports fell to a five-year low in 2020
    Japan’s coffee imports fell to 7.6 million bags in 2020

Production

Colombia produced just over 1 million 60-kg bags of coffee in March 2021, up 30% from 806,000 produced in the same month last year. This was the fourth straight month with higher output than in the same month last year. Yet, total output in the first six months of 2020/21 is up only 2.3% at 7.5 million bags from 7.4 million last year, due to poor output in the first two months of the current season.
Coffee production from Brazilian growers associated with coffee co-op Cooxupe, is seen falling by almost a third to 7.4 million 60-kg bags in 2021/22. The 32% fall in production, down from 10.9 million bags in 2020/21, comes as Brazil enters the off-year in the biennial coffee production cycle.

Demand

US coffee imports fell to a five-year low in 2020, its lowest since the 27.8 million bags of 2015. Total imports of green coffee, R&G coffee and soluble coffee into the US fell sharply to 28.6 million 60-kg bags in 2020, from a record 31 million bags the year before. There was a strong drop in green coffee imports, by about 2.7 million bags to 23.7 million. Imports of R&G coffees also fell by 5.1% to 1.9 million bags, whilst volumes of soluble imports rose by 16.8% to an unprecedented 2.9 million bags in 2020.
Japan’s coffee consumption fell in 2020 as total imports fell to 7.6 million bags, after reaching 8.3 million bags in 2019. Brazil is still the single largest origin, accounting for around 30% of total green coffee imports in 2020. Total arrivals from the world's largest producer were 1.9 million bags last year, down sharply from 2.5 million a year earlier but still above 1.8 million bags in 2018.

Trade

Vietnam’s coffee exports in the first three months of the year are estimated to have fallen 17% from a year earlier to 428,000 tonnes (7.1 million 60 kg bags), the General Statistics Office (GSO) said. Export revenue was seen down 11.3% at $771 million in Q1. Coffee shipments in March are estimated at 145,000 tonnes, valued at $275 million.
Ugandan coffee exports in March 2021 totalled 572,839 60-kg bags, practically unchanged from 562,763 in February but up 19.1% from 480,961 bags in the same month last year. This brought coffee exports in the first six months of 2020/21 to 2,861,703 bags, up from 2,572,636 a year ago.

Price

Arabica coffee futures have hit multi-year highs this month amid ongoing bullish market sentiment. On April 26, New York futures hit their highest level since August 2017, with the July settling at 143.35 cents per pound, after rising as high as 144.15 cents in the course of the session. By April 30, July arabica contract settled lower at 143.00 cents per pound, after reaching its highest since February 2017 at 147.65 cents in the course of the session. The arabica premium also hit a six-year high of 78.29 cents a on April 26.
Bullish market sentiment is buoyed by the prospect of tightening supplies in coming months due to a relatively small Brazilian harvest in 2021/22 and a stronger Brazilian currency, which rose to a two-month peak against the US dollar, deterring producer selling.

Apr 30 - IHSmarkit Market Briefing: Canned and Tomato

  • Thai pineapple raw material prices down to THB7.0/kg in April amid adequate supply.
  • Canned bean’s 2020 trade up 15% in volume and 22% in value y-o-y.
  • European canned fruit prices up foreseen amid lower raw material supply.

Production

European cling peach supply for industrial use will be significantly reduced in the coming season as the Greek crop is expected at least 50% lower due to frosts in mid-April. South Africa is sold out for the 2021 crop and the season in Argentina and Chile is nearly completed. Spanish cling peach production, although foreseen stable, will not be able to fill the gap.

Thai pineapple raw material output in April is close to 110,000 tonnes and daily fruit supply to canneries was described as adequate. The harvest has progressed quickly this month, resulting in more immature fruit only suitable for canned pineapple of standard grade – rather than choice – and juice.

Global production of tomato for processing is expected to rise by just 1% year-on-year in 2021 to 38.9 million tonnes. Production in California, the world’s largest processor, should increase by 7% to 10.9 mln tonnes; China’s output is expected to drop by 17% to 4.8 mln tonnes.

Demand

European demand is rising for Ecuadorian tuna pouches, which have risen USD3.70 per kilo in March to USD4.05/kg in early April; Asian and Ecuadorian tuna sources agree the sunflower oil price surge in recent months is influencing demand for canned tuna, which is partially shifting from preparations in sunflower oil towards those in soybean oil where possible, amid lower prices of the latter.

Demand for Chinese canned white asparagus is slow, probably driven by final product prices 20% higher than last year coupled with high sea freight costs. As opposed to last season at this stage, when demand surged amid Covid-19 panic buying, there are available stocks at Chinese warehouses.

Trade

Global trade of prepared beans (both shelled and unshelled) accounted for 1.2 million tonnes worth USD1.2 billion in 2020, up 15% in volume and 22% in value year-on-year, the highest figure of the last decade. Top importer the US received 185,000 tonnes worth USD229 mln last year – of which 100,000 tonnes were shipped from Puerto Rico –, up 67% in volume and 148% in value y-o-y.

Canned tuna exports to MENA in 2020 remained stable year-on-year at 254,000 tonnes, worth USD910 million. However, latest customs data shows significant demand variations among territories, probably influenced by oil prices slump, currency fluctuations and socio-economic factors.

Price

The Thai processing pineapple price fell from THB9.0/kg reported in March to around THB7.0/kg in late April. Premium fruit quality rates slightly higher than THB7.0/kg, though most fruit is quoted below THB7.0/kg.

The price for Pacific mackerel whole round for canning was quoted at USD1.16 per kilo (300-500g/pc) and USD1.15/kg (250-350g/pc) fob Ningbo on 15 April, for produce caught between October and December last year in major fishing area FAO61. Rates are expected to fall as soon as the fishing season resumes in August.

Apr 30 - Slight fall in Indian sesame prices (IHSmarkit)

    2% fall in spot price.
    3% fall in futures prices.
    Imports fell by two thirds.

India’s new sesame seed (whitish) spot price was INR8,975 per quintal (USD134/quintal) at Unjha wholesale market (Gujarat, North East) on 13 April, 2% less than on 15 March. African origins are shipping in full swing, easing global prices.

Indian exports started 2021 at 19,000 tonnes, worth USD30.3 million, in January 15% less year-on-year in volume and 27% less in value. The main importers were South Korea, the US, Russia and Iran, which took 24%, 11% and 6%, respectively, of the volume.

Imports reached 6,180 tonnes in January 2021, down from 20,300 tonnes in January 2020. The main suppliers were Brazil and Sudan, which accounted for 65% and 17%, respectively, of the total volume.

The daily futures market prices on NCDEX were:
    Deliveries in April 2021 closed at INR8,975/quintal on 20 April, 3% less than on 22 March.

Apr 30 - Daily Cocoa Futures Market Report

The search for new impulses mentioned yesterday seemed to be over yesterday, although the close in London speaks a different language. Given the weeks of sideways movement, something had to happen at some point and good support was found yesterday. The front months marked new 3-week highs, the second month managed to break through the 100- and 200-day averages, but closed below (July 21 GBP 1654; +7). The volume was also impressive with over 30k lots. In part, the momentum is attributed to positive Q1 figures from a major confectionery producer and its forecasts for 4-5% growth in 2021. However, in this case, declining sales in the bakery segment, which had absorbed some of the losses at the beginning of the Covid crisis, are recorded. It remains to be seen how this powder-relevant segment will develop in other cases.

Apr 30 - Weekly Int'l Pepper Market Report, week 26-30 April 2021 (IPC)

- Market showed a rather negative response. In local market, Malabar black pepper was reported with 2% deficit when compared to the previous week, averaging at USD 5,031 per Mt. Indonesia black and white pepper were reported with 4% and 1% deficit respectively when compared to the previous week, averaging at USD 3,280 per Mt for black pepper and USD 6,041 per Mt for white pepper. Malaysia black and white pepper were reported with an increase of 2% respectively as compared to the previous week, averaging at USD 3,292 per Mt for black pepper and USD 4,920 per Mt for white pepper. Furthermore, Viet Nam farm gate price of black and white pepper were reported with 6% and 5% deficit respectively as compared to the previous week, averaging at USD 2,699 per Mt for black pepper and USD 4,306 per Mt for white pepper. Sri Lanka black pepper was reported with 4% deficit as compared to the previous week and was traded at an average of USD 3,414 per Mt. China white pepper was reported with 1% defici t as opposed to the previous week and was traded at an average of USD 6,125 per Mt locally.

- International market also showed a rather negative response as India black pepper was reported with the same 2% deficit when compared to the previous week, averaging at USD 5,300 per Mt. Indonesia black and white pepper were reported with 3% and 1% deficit respectively when compared to the previous week, averaging at USD 3,907 per Mt for black pepper and USD 6,965 per Mt for white pepper. Malaysia black and white pepper were reported with an increase of 1% and 2% respectively as compared to the previous week, averaging at USD 4,665 per Mt for black pepper and USD 6,120 per Mt for white pepper. Furthermore, Viet Nam black pepper 500 g/l, 550 g/l and Viet Nam white pepper were reported with 1% deficit respectively when compared to the previous week, averaging at USD 3,608 per Mt, USD 3,648 per Mt and USD 5,343 per Mt respectively. China white pepper was also reported with 1% deficit as compared to the previous week and was traded at an average of USD 6,325 per Mt. US market and trading house back to back order was reported stable and unchanged in the last two weeks. Muntok white pepper in US Market for CF May/June was reported at USD 6,900 per Mt. 

Apr 29 - Daily Cocoa Futures Market Report

Closing prices July 21 of the last 1.5 weeks: 19.4 +4 / 20.4 -21 / 21.04 +23 / 22.04 +10 / 23.04 +-0 / 26.04 +7 / 27.04 -5 and yesterday 28.04 -2 (GBP 1647). We think the current sideways movement cannot be described more clearly. Coupled with the extremely thin volume, the result is the perfect reflection of the cocoa market. Fundamental market participants as well as specs / funds are looking for new impulses. Even if the market seems tired - we all know our market well enough: too long a calm / sideways could only further provoke a possible violent breakout. Despite the calm, we recommend watching the market at least with a weary eye.

Apr 28 - China and Australia agricultural commodities trade reshuffled (IHSmarkit)

  • Australian grapes to China are delayed at ports.
  • Australia has diversified its export destinations.

The Chinese government told Chinese traders to halt importing a range of Australian commodities such as coal, sugar, barley, lobsters, wine, copper and so on last year. China has placed high tariffs on Australian barley and wine.

According to the Global Times, a Chinese state-owned press outlet: “The bilateral relations further plunged after Canberra used an anti-China law to tear up agreements signed between the state of Victoria and China regarding the Belt and Road Initiative. China has vowed to take forceful countermeasures but has not announced any so far.”

There are reports on the delay of customs clearance of Australian grapes at Chinese ports. The Global Times cited from its own sources that there are indeed many containers of Australian grapes waiting for inspection and nucleic acid tests at ports. It remains unclear when the backlog can be cleared. Other fruit shipments from Australia are also under inspection.

Reuters reported (23 April) that Australian table grapes have been experiencing lengthy delays at Chinese ports for the last three weeks. Jeff Scott, chief executive at the Australian Table Grape Association told Reuters there are about 400 or 500 containers that are taking between five and 10 days longer than normal to be cleared.

Trade

Australia sent about USD400 million worth of fresh grapes to China in 2020, up 2% year-on-year. In the first two months of 2021, Australian grapes to China reached USD31 mln, up 2% y/y compared with the same time last year.

In the first two months of 2021, Australian wine sales to China decreased 97% y/y to USD2.0 mln.

There was no record of Australian barley sent to China in the same period.

However, Australian traders have found alternative destinations or ways for clearing their stock. In the first two months of 2021, wine exports to the world excluding China increased 19% y/y to USD210 mln, barley rose 374% y/y to USD373 mln.

There are some reshuffles of the trade flow as the relationship between the two countries continues to be sour.

Apr 28 - US almond crop benefits from excellent growing conditions (IHSmarkit)
 

  • April weather in April favourable for the developing crop.
  • Dry conditions reduce disease ‘pressure’ and the need for fungicide applications.
  • Variable crop potential on Nonpareils.

Clear skies and mild to warm temperatures dominated nearly the whole of April in California’s Central Valley and this benefited the almond crop.

This was the assessment of Blue Diamond Growers in its 26 April Crop Progress Report, which covers conditions and observations made between Monday, 29 March and Sunday, 25 April. Its next scheduled report will be posted on Monday, 31 May 31, 2021.

The firm noted that in the event of any significant occurrences prior to that date, it will be updating its website as soon as possible.

Blue Diamond recalled that daily maximum temperatures ranged between the mid and upper 60s (ﹾF) to mid-80s throughout the month, with morning lows dipping into the upper 30s and low to mid 40s.

Bright skies prevailed over the region up until the final day of the period when a winter-like storm system passed over the state, bringing heavy overcast and scattered rain on 25 April.

“While the storm delivered much needed snow to the high Sierra watershed, rainfall totals on the valley floor varied widely,” the report explained. “Most areas reported little to no precipitation while brief scattered downpours dropped a few hundredths of an inch. The threat of frost early in the month failed to materialise, with lowest temperatures in the coldest locations failing to drop to damaging levels.”

Growers spent April tending to the needs of the developing crop under the influence of the excellent growing conditions. As the crop develops, procedures implemented as part of Integrated Pest Management programmes move into a different phase. With the completion of the bloom and jacket split stages, growers and the Pest Control Advisors (PCA), shift their attention to nut and foliar diseases, as well as insect and weed management.

“This year’s predominately dry bloom and post-bloom weather failed to produce conditions supportive of fungal development, thus reducing disease ‘pressure’ and the need for fungicide applications,” Blue Diamond observed.

Apr 28 - Ivory Coast to boost local firms' share in cocoa exports, say sources 

Ivory Coast will soon require 20% of cocoa purchases by multinational companies to be fulfilled by local firms in order to reduce foreign influence on the world's largest cocoa-exporting economy, four sources told Reuters on Tuesday. President Alassane Ouattara is expected to sign on Wednesday an order to enforce a 2012 law under which Ivorian cocoa exporters are meant to handle at least 20% of national cocoa output.

Apr 28 - Daily Cocoa Futures Market Report

Further spring fatigue in the cocoa as London didn't really wake up yesterday either, consolidating further on meagre volume of 17k lots / range GBP 16 (perhaps in part due to the Kings Day holiday in the Netherlands). In the process, the second month Jul 21 failed to make a single gain on the trading day, testing lows on the 10-day average at GBP 1638 to close slightly weaker at GBP 1649 (GBP -5). In this context, the increasing open interest possibly suggested further selling interest from specs. From the origin, there are reports about a pending legislation change that is supposed to limit the international influence on the local cocoa business and the oligopolistic structure. According to this, in future 20% of purchases by multinationals are to be handled by Ivorian exporters. The CCC is thus giving way to long-standing pressure and the demands of local exporters

Apr 27 - Daily Cocoa Futures Market Report

It took until early afternoon for the market to break out of its GBP 5 range / July 21. New insights were scarce in the afternoon as well. The July 21 LDN ended the day at GBP +7 at GBP 1654, still the highest close in 3 weeks. New York was a little firmer on the move, ending the day $ +37 at $2487, struggling to crack $2500 (high yesterday $2491). Next resistance in London we see around GBP 1666/68, where the two long term (100 & 200 day) moving averages now crossed. Industry support/buying interest remains around GBP 1610. Ivory arrivals as of 25.4 are 1.846 mt vs. 1.718 mt (+7.5%) from last year. The weekly arrivals in the last week are even three times higher than in the previous year.

Apr 27 - Indian guar gum price recovery (IHSmarkit)

    4% increase in spot price.
    33% fall in exports.
    Futures price rose by 7% for deliveries between July-October 2021.

The Indian guar gum spot price was INR6,228 per quintal (USD83.0/quintal) at the Jodhpur wholesale market on 26 April, 4.2% more than on 30 March. Indian guar gum exports were 15,120 tonnes, worth USD19.1 million in January 2021, and a third less year-on-year in volume and 42% less in value. The US, Germany and Russia accounted for 34%, 11% and 8%, respectively, of the total exported volume.

Apr 26 - Daily Cocoa Futures Market Report

At the end of the week, both markets continued to move sideways, if one can speak of movement at all. London languished in a range of just GBP 11 with a pitiful volume of not even 14k lots. After opening GBP 10 firmer, the Jul 21 soon found resistance on its way to the 200-day moving average and half-heartedly retraced at daily highs of GBP 1655. Closing Jul 21 at GBP 1647, those who bothered to participate at all focused on the Jul/Sep 21 spread, which diverged by GBP 6 and is trading at GBP -22. Commitments of traders as per 13.4. show the final liquidation of the speculative net long position in London by almost -11k lots to now -3k lots, while the New York managed money position only lost around 1k lots (+15k). 

Apr 23 - IHSmarkit Market Briefing: Dried Fruit and Nuts

    Chilean walnut crop upgraded by 5,000 tonnes due to heavy rain.
    Mexican peanut consumption is expected to increase due to post-lockdown economic.
    Vietnamese cashew prices crossed the USD3.0/lb level thanks to large orders from packers.


Production
The 2021 Chilean walnut crop estimate has been upgraded by 5,000 tonnes to 150,000 tonnes, 15% more year-on-year, thanks to heavy rains which, on the other hand, damaged domestic raisin and prune outputs.

Frosts hit 16,500 hectares of Spanish almond trees although there is not expected to be a sharp fall in the 2021 crop. 

Severe drought in the Rio Grande valley is set to damage US plantations, mainly located in the US states of New Mexico and Texas, after the Mexican agribusiness industry expressed concerns about agreed water transfers between Mexico and the US  due to low water irrigation level.

Demand
High demand for hazelnut products is encouraging new launches and acquisitions. The Turkish military pension fund Oyak has acquired Sagra, a specialist in chocolate and hazelnut products for an undisclosed sum.

Mexico’s peanut consumption is forecast to increase by 5.2% y-o-y to 304,000 tonnes in the 2021-22 season, thanks to rising consumption as a result of the economic recovery. 
Trade

US pistachio sales reached 24,560 (short) tons this March, 3% less year-on-year, bringing seasonal shipments (September-March) to 203,490 tons, 10% up. Seasonal domestic sales were 64,390 tons, 8% more y-o-y. Exports rose by 14% y-o-y to 139,100 tons.

Chilean walnut exports reached 490 in-shell equivalent tonnes this March, 50% more year-on-year, bringing seasonal sales (21 March 2020-20 March 2021) to 130,750 tonnes, 3.5% less y-o-y.

Turkey’s dried fig exports reached 830 tonnes in the week ending on 10 April, 45% less year-on-year, bringing seasonal sales (30 September 2020-10 April 2021) to 50,360 tonnes.

India’s Food Safety and Standards Authority (FSSAI) has confirmed that prunes from plums are a processed food product and, consequently, non-subject to the non-genetically modified (GM) cum GM-Free status certificate requirement for international suppliers.

Price
Trading sources reported that Vietnamese cashew prices increased in the week ending on 18 April, particularly, WW320 and WW240, crossing the USD3.0 per pound level. WW320s were at USD3.0/lb fob and WW240s USD3.40/lb fob. 

According to Turkey’s Aegean Export Association (EIB), in the week ending 10 April Turkish dried fig fob prices were: USD4,450/tonne for whole product, 3% more month-on-month; for cut product: USD2,170/tonne, 25% less m-o-m; and USD1,320/tonne for paste, 12% less.

Apr 23 - IHSmarkit Market Briefing: Sugar

  • Global sugar surplus of 0.3 million tonnes estimated for 2021/22
  • Global sugar production in 2021/22 may rise by 7.9 million tonnes to 187.3 million tonnes
  • Consumption projected to rise 3.4 million tonnes y/y to 185.5 million tonnes

Production

The global sugar market is set for a surplus of 0.3 million tonnes in 2021/22. Global sugar production in 2021/22 may rise by 7.9 million tonnes to 187.3 million tonnes from this season’s 179.4 million. The sharpest increase in output in 2021/22 is seen in Asia where sugar production is projected to rise by 3.7 million tonnes to 70.8 million, due to a sharp recovery in Thailand and India. An increase by 1.5 million tonnes to 47.7 million could be on the cards for South America in 2021/22, as the cane crush in Brazil’s Centre/South in 2022 is seen recovering.

Demand

Global consumption is projected to rise about 3.4 million tonnes (1.9%) y/y to 185.5 million tonnes amid a global economic recovery with only 1.1 million tonnes growth projected for the current sugar year. Asian sugar consumption in 2021/22 is expected to rise to a record 89.7 million tonnes, up from 87.4 million the year before. European sugar consumption is seen recovering somewhat to 30.7 million tonnes in 2021/22, after falling to 30.4 million this season from nearly 30.8 million a year ago. China's sugar imports are seen falling back somewhat to 5.4 million tonnes in 2021/22 after surging to 5.8 million tonnes this season from just 4.5 million in 2019/20

Trade

Russia published a draft order confirming that any white sugar imported into Russia at zero duty is used for supply to the domestic market or for the production of sugar-containing products. The volume of duty-free sugar imports into Russia until 1 October 2021 will be 350,000 tonnes.

Ukraine also published a bill proposing to reduce the import duty on 120,000 tonnes of sugar imports from 50% to nil, according to local press reports. Duty-free imports shall be allowed until 1 October 2021.

Price

Raw sugar futures in New York ended fractionally lower by Thursday (April 22) in the two most actively traded months, as the market went into consolidation mode after hitting a 2-month high at 17.05 cents per pound in the course of the session. The most-active contract for July delivery eventually ended down 1 point at 16.88 cents per pound, in dealings between 16.76 and 17.05 cents. The intraday high marked the market's highest level since the end of February. Front-month May shed 2 points to 16.92 cents per pound, in dealings between 16.81 and 17.07 cents.

Apr 23 - IHSmarkit Market Briefing: Coffee

  • US coffee imports fall to five-year low in 2020, to 28.644 million 60-kg bags
  • Vietnamese coffee farmers sold 68% of the 2020/21 crop as of 15 April
  • Ugandan coffee exports in March 2021 totalled 572,839 60-kg bags

Production

Coffee growers in Vietnam have likely sold 68% of the 2020/21 crop as of 15 April, compared with 65% a year earlier. Sales may rise to 75% by the end of June if prices remain at current levels. Output is estimated at 1.7 million tonnes (28.3 million 60-kg bags) during the 2020/21 season, in line with the previous survey.

Demand

US coffee imports fell to a five-year low in 2020, its lowest since the 27.860 million bags of 2015. Total imports of green coffee, R&G coffee and soluble coffee into the US fell sharply to 28.644 million 60-kg bags in 2020, from a record 31.068 million bags the year before. There was a strong drop in the imports of green coffee by about 2.7 million bags to 23.797 million. Imports of R&G coffees also fell by 5.1% to 1.928 million bags, whilst volumes of soluble imports rose by 16.8% to an unprecedented 2.918 million bags in 2020. US coffee imports from Brazil, its main supplier, fell only modestly to 7.488 million bags in 2020 from an unprecedented 7.693 million bags the year before.

Trade

Ugandan coffee exports in March 2021 totalled 572,839 60-kg bags, practically unchanged from 562,763 in February but up 19.1% from 480,961 bags in the same month last year. This brought coffee exports in the first six months of 2020/21 (October/September) to 2,861,703 bags, up from 2,572,636 a year ago. Robusta exports were up at 2,510,688 bags from 2,075,631 last year, while arabica shipments dropped to 351,015 bags from 497,005.

Price

Arabica coffee futures rose to the highest level in nearly two months amid ongoing bullish market sentiment related to the outlook for a strong drop in Brazilian production in 2021/22 and indications of a post-Covid demand recovery. Arabica July settled up 1.95 cents at 136.15 cents per pound, after peaking at 136.45 cents, the highest since 1 March. The bullish sentiment in the arabica market elevated the arabica premium over robusta to the highest level since late February, at 71.75 cents per pound.

Farmers in Vietnam’s Central Highlands sold beans at VND32,500-33,500 ($1.41-1.45) per kg, compared with VND32,000-33,000 a week earlier. Indonesian Sumatran robusta beans were offered at a $180 premium over the July contract, down from $200 last week as new beans are starting to enter the market.

Apr 23 - IHSmarkit Market Briefing: Fresh Fruits and Vegetables

  • Spanish stone fruit crop production expected to reach 1.8 mln tonnes this year.
  • EU fresh asparagus supplies may not meet demand.
  • Global pineapple trade decreased 9% year-on-year in early 2021.
  • The UK recorded a 14% week-on-week increase of fresh cauliflower wholesale price in week 15.

Production

Orange growers in Brazil’s São Paulo state are expected to harvest 308.6 million boxes (40.8 kilos each) of industrial oranges this season, about 3% less than the 317.7 mln boxes harvested in the preceding season.

The 2021 Spanish stone fruit crop production is expected to reach 1.8 mln tonnes, 9% less year-on-year. Valencia’s output may reach 30,000 tonnes. Nectarines, paraguayans and plums are expected to total 9,600 tonnes, 6,500 tonnes and 5,500 tonnes, respectively.

Demand

US strong demand for ready-to-eat (RTE) salads as well as fresh-cut produce such as apple slices, melon spears and carrot sticks has boosted sales of packaging materials. Sales of fresh produce packaging is forecast to grow about 4% annually to about USD7 billion by 2024.

The EU is likely to buy more fresh asparagus from Mexico and Morocco as recent frost has damaged asparagus crops and the start of the harvest is delayed by about two weeks. In the first two months of 2021, total fresh asparagus shipments (from both intra-EU and overseas) to the EU were about 7,350 tonnes, a 20% decrease from the same time last year. Meanwhile, the easing of lockdowns in some countries may see recovery of demand for asparagus.

European demand and prices for organic lemons have remained high, encouraging Spanish expansion in planted areas to 45,830 hectares, accounting for 16% of the country’s lemon growing area.

Trade

The global pineapple trade was subdued in the first two months of 2021, with a total for all countries of 460,000 tonnes imported, down 9% compared with the same time last year. Reduced air travel and foodservice lockdowns continue to affect supplies and overall consumption.

In 2021's first two months, Peru’s main exported non-traditional agricultural products were: fresh grapes (USD509 mln, +27% y/y), mango (USD166 mln, +4% y/y), blueberry (USD45 mln, +26% y/y), avocado (USD39 mln +76% y/y) and onions (USD22 mln, +94% y/y). Exports decreased for quinoa (USD14 mln, -25% y/y) and fresh asparagus (USD44 mln, -17% y/y).

Prices

The world’s average pineapple imported price was USD750/tonne cif in February, a 4% month-on-month decrease.

UK average cauliflower wholesale price was GBP1.12 per head in week 15, up 14% from the preceding week, the highest increase rate among major vegetables recorded.

Apr 23 - IHSmarkit Market Briefing: Cocoa

  • European certified stocks increased by 21%, US up 31%
  • Ivory Coast cocoa port arrivals up 5.2% y/y
  • Brazil’s domestic chocolate consumption rose by 1.5% y/y in 2020

Production

The rate of Ivory Coast’s cocoa volumes arriving at its ports has risen again this week, with supplies now 5.2% above this time last year. Cocoa arrivals at Ivorian ports reached 1.783 million tonnes between October 1 and April 18, up from 1.695 million tonnes in the same period last season. In weekly volumes, 31,000 tonnes of cocoa beans were delivered to Abidjan port and 34,000 tonnes to San Pedro between April 11-18 for a total of 65,000 tonnes. This is up from the 23,000 tonnes noted in the same period last season.

Demand

Barry Callebaut’s half year results saw total sales volumes at 1,071,603 tonnes, down 2.9%, though Q2 sales only dropped 1.3% compared to Q1’s 4.3%, signaling a recovery. Its CEO said he sees a very strong rebound in chocolate demand in most of Asia with a "remarkable" recovery in China and "impressive" performance in India.

Brazil’s domestic chocolate consumption rose by 1.5% y/y in 2020, though it produced only 757,000 tonnes of chocolate in 2020, up marginally by 0.1% y/y. Approximately 83% of Brazilian households bought chocolate in 2020, with the frequency of chocolate sales points in supermarkets growing by 9% y/y.

Trade

A boost in European and US certified cocoa stocks, indicate a preference for cocoa outside the LID premium, the ICCO outlined. European certified stocks increased by 21%, while a 31% rise was recorded in certified stocks in the US. The ICCO stated that 52,860 tonnes of cocoa beans were tendered against the MAR-21 contract in Europe, compared with the 6,130 tonnes physically delivered against the MAR-20 contract a year ago. During the main crop of 2020/21, cocoa graded by the ICE Futures Europe reached 74,140 tonnes, up from 71,130 tonnes the year prior. US graded 47,731 tonnes of cocoa beans, up from 10,747 tonnes graded during the same period of the preceding year.

Price

Cocoa futures saw a mixed week with the most notable movement reported on Tuesday (April 20), when New York prices turned sharply lower. July New York cocoa closed down USD73 to USD2,419, while July London cocoa closed GBP21 lower to GBP1,614. By the end of the week, futures only saw moderate gains, backed by renewed demand optimism. July New York cocoa closed up USD3 to USD2,442 by Thursday’s (April 22) close, while July London cocoa closed up GBP10 to GBP1,647.

Apr 23 - Spanish organic lemon production has risen by more than half in three years (IHSmarkit)

  • Well over 7,000 hectares under cultivation.
  • Covid-19 has kept demand high for all lemons.
  • The US is the world’s biggest exporter.

Spain had some 1,700 hectares under organic lemon cultivation in 2012. By 2017 that had increased to exactly 4,091 ha. Last year, according to Ailimpo, the country’s trade association, Spain was growing organic lemons on more than 7,100 ha.

This means that 16% of the country’s total lemon growing area (45,830 ha) is devoted to organic production, and this area is likely to expand. The area quoted by Ailimpo comprises 3,729 ha as fully converted and 3,388 ha as in the conversion period.

Andalusia has the largest organic area, comprising 36% of the total. Murcia has 33% and Valencia 30%.

This year, unlike in other years, demand and prices for organic lemons have remained high, according to Freshplaza. After Christmas, the Fino campaign usually comes to an end, coinciding with the end of the season from other origins, and demand usually weakens, but this year, after the emergence of Covid-19, there was a significant rebound in sales as consumers were seeking vitamin C. Consumers were clearly looking for citrus.

The market for organic lemons is relatively small compared to the total volume, but the demand is increasing and the availability is limited. “For non-European suppliers, it remains a niche because most organic lemons are sourced from within Europe,” observes CBI, the Dutch Ministry of Foreign Affairs, which offers guidelines and assistance for extra-EU lemon producing countries that want to sell into Europe.

In absolute production terms, Mexico is the world’s leading lemon and lime provider for the fresh market, selling 2.2 million tonnes annually. The EU is in second place, with about 1,4 mln tonnes, and most of that fruit is Spanish. Argentina is in third place with 1.4 mln tonnes: Argentina grows more fruit than this, but much of it is destined for processing into juice and oil rather than fresh sale.

The US remains the world’s biggest exporter of organic fresh citrus fruit, however.

One problem when monitoring organic lemon production and trade is the lack of data. There is an organic HS code for fresh lemons (0805502010) but nobody seems to use it.

There are some organic lemon juice consumer products on the market. Biona is one supplier, selling NFC juice. Organic concentrate and NFC lemon juice finds its way into upmarket juice blends (the Swiss manufacturer Biotta uses it, as does Ingrilli of Sicily).

Apr 23 - Daily Cocoa Futures Market Report

Yesterday also brought no clear insights. The half-hearted attempt to attack Monday's highs at GBP 1660 / July 21 failed due to lack of volume. July 21 ended the day slightly firmer at GBP +10 to GBP 1647. While meagre trading was confined to the front dates, the last 5 months (May 22 to March 23) all ended the day unchanged.
The CCC announced yesterday that it will compensate exporters with a total of US$ 30 million for losses incurred due to the introduction of the LID and the impact of the Corona pandemic.

 Apr 23 - Weekly Int'l pepper Market report, Week 19-23 April 2021 (IPC)

- Market showed a mixed response. In local market, Malabar black pepper was reported with 1% deficit when compared to the previous week, averaging at USD 5,118 per Mt. Indonesia black and white pepper were reported with an increase of 8% and 1% respectively when compared to the previous week, averaging at USD 3,404 per Mt for black pepper and USD 6,086 per Mt for white pepper. The increase of Indonesian prices could be factored in the continuous high demand amidst the stock limited to none as well as the strengthening of Indonesian Rupiah against the USD Dollar (IDR 14,541 @USD 1), recording a 1% appreciation. Malaysia black and white pepper were reported with an increase of 8% and 9% respectively as compared to the previous week, averaging at USD 3,228 per Mt for black pepper and USD 4,803 per Mt for white pepper. Viet Nam farm gate price of black pepper was reported 2% deficit as compared to the previous week, averaging at USD 2,875 per Mt. Whilst, Viet Nam white pepper was reported stable, averaging at USD 4,511 per Mt. Sri Lanka black pepper was traded at an average of USD 3,561 per Mt. Furthermore, China white pepper was reported stable and unchanged.
- International market also showed a mixed response as India black pepper was reported with the same 1% deficit when compared to the previous week, averaging at USD 5,384 per Mt. Indonesia black and white pepper were reported with an increase of 8% and 1% respectively when compared to the previous week, averaging at USD 4,048 per Mt for black pepper and USD 7,014 per Mt for white pepper. Malaysia black and white pepper were reported with an increase of 9% and 8% respectively as compared to the previous week, averaging at USD 4,615 per Mt for black pepper and USD 6,020 per Mt for white pepper. Furthermore, Viet Nam black pepper 500 g/l, 550 g/l and Viet Nam white pepper were reported stable with a slight increase, averaging at USD 3,645 per Mt, USD 3,685 per Mt and USD 5,380 per Mt respectively. China white pepper was reported stable and unchanged. 

Apr 22 - Daily Cocoa Futures Market Report

The sideways movement continued yesterday, when the previous day's losses were almost leveled to the pound. After a hesitant opening, the front half of the board found good support from increased buying interest. This was fueled once again by New York, whose opening brought further momentum and propelled London to highs of GBP 1650 basis Jul21. It was only in the last hour of the trading day that selling put pressure on the market. July 21 finally ended the day GBP 23 up at GBP 1637, so we continue to move in the corridor between 1650 and 1600. The carry structure continued to manifest itself in the front May/Jul 21 spread, which is now trading at GBP -29. The origin was still not showing in the market, the levels are probably unattractive. Côte d'Ivoire lags over 1.0 million mt year-over-year with its pre-sales for the upcoming 2021/22 crop.

Apr 21 - Daily Cocoa Futures Market Report

After the market's breakout due to the reduction of the spec. Long position on Monday, prices fell further yesterday. The July 21 recorded a loss of GBP -21 and ended the day at GBP 1614; the market is back in its ultimately seen sideways movement. The trigger was mainly the movement from NY. Here, the market has been struggling since the end of March to break through the $2,500 level on a sustained basis. Speculative selling and the pressure of high stocks (approx. 15% above the previous year) led to a correction of $73, closing July 21 $2419. NY is thus also back in its sideways movement. The arbitrage yesterday approached a discount of GBP -120, coming from GBP -160 from last week. There is currently no "story" to tell in cocoa, only that the market is moving back to levels where industry interest can (theoretically) be expected.

Apr 21 - Polish apple harvest will be slightly delayed this year (IHSmarkit)
- Apple crop seems undamaged.
- French apples have definitely suffered.
- German apple harvesting will be later than last year.

- The various frosts that have hit Poland this spring have not done any noticeable damage to the 2021 apple crop, according to the latest report from Prognosfruit. However, the cold weather has meant that the season is delayed by about 10 days, compared with last year.

- Post-Easter frosts in Hungary have damaged the apricot and peach crops, but there are no reports of the apples and pears being affected. “In some cases, the buds got some cold, but given that blooming of these species will start later, right now we think that these cold spells let them untouched,” says the report.

- In Denmark, apples and pears are still in winter mode, and there are no reports of serious damage to the crops. Belgium and the Netherlands have experienced cold weather but again, it does not seem to have affected the fruit. Dutch cherries maybe slightly delayed.

- Italy experienced a succession of freezing nights between late March and mid-April. The apricots and peaches have been damaged, and there are reports of damage to the pears and apples in Alto Adige, Trento, Emilia Romagna and Piemonte, but a full assessment is still awaited.
“For sure, the Italian production will be smaller, but no figure can be put forward at this stage,” said Prognosfruit.

- French apples and pears orchards have been severely affected by frost during the blossom period for the early varieties, though the flowering was abundant which may mitigate the losses. Most producing regions were affected, but south-eastern France seems to be the most affected region, and Prognosfruit warns of a smaller harvest of poorer quality. Some growers might have lost most of their crop, even it is still too early to make a final estimate.

- Spain has suffered some damage but the number of blossoms will probably limit this. For later varieties, the issue will be more related to quality and possibly size.

- The German crop could be slightly affected but it is too early to be sure. The Gala and Elstar varieties are OK, while Boskoop is more damaged. In the early region of Baden the stone fruit (plums) may have suffered while Niederelbe is unscathed. The harvests in northern Germany may be delayed by 10-14 days.

 

Apr 20 - Indian coriander prices stabilised when harvest is set to finish (IHSmarkit) 


    Spot price stabilised between INR7,200-7,300/quintal.
    1-3% futures prices fell for deliveries between April-July.
    59% increase in exported volume.

The Indian coriander spot price was INR7,271 per quintal (USD97.3/quintal) at Kota (Rajasthan, North India) on 16 April, unchanged from 17 March. The Jaipur market price fell by INR35 to INR7,065/quintal between 17 March-16 April.
The 2020-21 crop is expected to mirror the previous season, when it reached 940,000 tonnes. Carry-over stocks are falling and the domestic crop is expected to remain firm in Q1 and Q2 according to Olam Spices in its latest market update.
Indian exports increased by 59% year-on-year in volume to 5,245 tonnes in volume and by 50% in value to USD6.2 mln in January 2021, according to customs data.
The main importers were Malaysia, Sri Lanka and Nepal, which took 19%, 15% and 9%, respectively, of the total volume.

Apr 20 - Daily Cocoa Futures Market Report

The reaction to the massive reduction of the speculative long position in London was not surprising. Shortly after opening, prices gained up to GBP 30 and found resistance around GBP 1660 (Jul 21) on fresh selling. The downtrend was accelerated in the afternoon by an increasingly firm British pound, which gained significant ground against the euro and US dollar. Eventually, most of the morning rally levelled off with a GBP 4 firmer Jul 21 close. The question remains whether the liquidation of the speculative long position has already come to an end. What is certain, at least, is that the origin still has to sell, which should put pressure on the market through resulting hedge selling and could prevent too significant firming. Speaking of the origin: Last week's arrivals in the IVC, at 65k mt, are clearly above the previous year's week (23k mt).

Apr 19 - Daily Cocoa Futures Market Report

In anticipation of the North American grinding figures published in the evening (Q1 2021 with 118k mt +2.05% above last year), the players apparently settled their accounts for the time being. In any case, yesterday was little to feel from the energy of the previous week. Weak opening, volume 26k lots, GBP 24 range...overall no clear heading. Jul21 closed GBP-2 unspectacular at GBP 1630, the rest of the board also remained unchanged. The structure also stood stable, though there is little doubt that the current carry structure should continue to manifest. In the grading room, 3 new BDUs Nigeria and 120 SDUs IVC re-grades received new certificates after close, which should keep the front spread further in the discount. Worth mentioning is the today's weak British pound that trades against the euro for some time again above 0.87. 

Apr 16 - Weekly Int'l Pepper Market Report, week 12-16 April 2021 (IPC)

- As Muslims around the world celebrate Ramadhan amidst the global pandemic of Corona Virus, market showed a mixed response. In local market, Malabar black pepper was reported with 1% deficit when compared to the previous week, averaging at USD 5,166 per Mt. The decrease of India's pepper could be contributed to the weakening of Indian Rupee against the US Dollar (INR 75.05 @ USD 1), recording a 2% depreciation. Indonesia black and white pepper were reported with a 1% and 4% deficit respectively when compared to the previous week, averaging at USD 3,144 per Mt for black pepper and USD 6,015 per Mt for white pepper. The decrease of Indonesian price could be contributed to the weakening of Indonesian Rupiah against the USD Dollar (IDR 14,630 @USD 1), recording a 1% depreciation. It was also reported that the current situation of pepper prices in Bangka Province of Indonesia was more influenced by speculators which possessed more stock as compared to farmers. Malaysia black and white pepp er were reported with an increase of 5% and 3% respectively as compared to the previous week, averaging at USD 2,979 per Mt for black pepper and USD 4,387 per Mt for white pepper. Viet Nam farm gate price of black and white pepper were reported with 2% and 3% deficit respectively as compared to the previous week, averaging at USD 2,926 per Mt for black pepper and USD 4,506 per Mt for white pepper. Furthermore, China white pepper was reported stable and unchanged.
- International market also showed a mixed response as India black pepper was reported with the same 1% deficit when compared to the previous week, averaging at USD 5,433 per Mt. Indonesia black and white pepper were reported with 1% and 4% deficit respectively when compared to the previous week, averaging at USD 3,751 per Mt for black pepper and USD 6,933 per Mt for white pepper. Malaysia black and white pepper were reported stable and unchanged. Contrary with its local price, Viet Nam black pepper 500 g/l, 550 g/l and Viet Nam white pepper were reported with an increase of 1% respectively as opposed to the previous week, averaging at USD 3,635 per Mt, USD 3,675 per Mt and USD 5,370 per Mt respectively. China white pepper was reported stable and unchanged.

 

Apr 15 - Daily Cocoa Futures Market Report

With the European grindingl figures within expectations, there was, unsurprisingly, consolidation at current levels. The July 21 continued to find good buying interest towards the GBP 1600 support, which is almost exactly on the long-term uptrend line (see chart). The range was also narrow at GBP 21 (GBP 1614/1635). Closing price July 21 GBP -3 at GBP 1632. The only highlight was the July / July 21 arbitrage, which temporarily extended to GBP -160 (closing GBP -150). Certainly due to a firm CRB index (+2%) and a firm performance of the other commodities on yesterday's trading day, which pulled the cocoa slightly upwards in New York ($ +18 / close $ 2459)

Apr 15 - Cocoa trader Olam says new EU law may force it to drop some suppliers 

Commodity trader Olam said on Wednesday that new European Union legislation aimed at preventing the import of commodities linked to deforestation and human rights abuses might force it to stop using some of its cocoa suppliers.  Olam and other global companies with operations that include countries where environmental and human rights abuses are widespread, face increased pressure from consumers and lawmakers to source their products ethically.

Apr 14 - Daily Cocoa Futures Market Report

After three days of heading south and losing GBP 80, London slammed on the brakes yesterday and corrected with fading selling pressure and above average volume (42k lots) initially around GBP 20. After opening NY, the very volatile arbitrage, temporarily at GBP +155 (closing GBP 135), brought further support. The Jul21 ended up gaining GBP 25 to close at GBP 1635. The front structure strengthened, the May/Jul 21 spread gaining 8 points (closing at GBP -22). It seems likely that some of the firming was due to the Q1/21 grinding figures that were released this morning, with some players looking to quickly square their positions. ECA is down -3.01% year-on-year in Q1 at 357.8k mt, with Germany participating here with a loss of -8.01% (91.5k mt). Overall within expectations. For a more reliable statement, we will have to wait for the North American figures tomorrow evening.

Apr 13 - Vietnamese cashew market becomes active again (IHSmarkit)

    Factories are collecting and drying raw nuts.
    Rains are making this process difficult.
    African raw cashews remain more expensive.

- The Vietnamese cashew market was quiet with limited transactions early last week but picked up later in the week.
 
- Ho Chi Minh City-based Golden Bridge observed that when trading started, the WW320 grade was confirmed at USD3.0 per pound fob from medium BRC packers while HACCP packers sold easily at USD2.90-2.95/lb fob for May and June shipments.
- Demands on other grades such as WW180, WW210, WW240, WS, LP, SP are also much stronger compared with previous weeks.
- Golden Bridge explained that factories are focusing on collecting and drying raw nuts from the main harvests of Vietnam and Cambodia.
- Some cashew plantations have confirmed that volumes are down by 20-30%. However, Golden Bridge cautioned it is still necessary to wait to have the up to date figures about the crops as this drop is not recognised in all areas. The main problem has been the early arrival of the rainy season which creates a lot of difficulties for factories in drying and storing raw nuts.
- African raw nuts continued to be higher priced. For example, Ivory Coast 47OT was at USD1,250/tonne cfr Ho Chi Minh City and 48OT at USD1,300/tonne cfr Ho Chi Minh City.

Apr 13 - Indian cumin seed price growth continues (IHSmarkit)

    13% increase in 2020 exports.
    2% increase in the spot price.
    Futures prices for deliveries in May started at INR15,000/quintal level.

- The Indian cumin seed fob spot price closed at INR14,076 per quintal (USD188/quintal) on 12 April at the Unjha market (Gujarat, North West), 2% more than on 15 March.
- The federation of Indian spices stakeholders (FISS) has launched its Gujarat (the main origin) 2020-21 cumin crop estimate, 15% lower (200,000 tonnes) than in the previous season due to poor yield and cut in planted acreage.
- Indian cumin seed exports started 2020 with 14,880 tonnes, worth USD29.2 million, 13% more year-on-year in volume and unchanged in value, according to customs data. China was the main importer, taking 14% of the total exported volume.

Apr 13 - Frost might potentially halve Italian fruit production (IHSmarkit)

    Apricots, peaches, cherries and grapes among the affected crops.
    Some losses reported for leaf vegetables and tomatoes.

- Freezing cold waves were recorded across Italy in the day following Easter, affecting apricots, peaches, strawberries, kiwis, leaf vegetables, early tomato for processing and early sweetcorn.
- According to growers’ organisation CIA-Agricoltori, the frost could have potentially damaged 50-75% of the production in the centre-north as fruit trees were in full bloom when night temperatures dropped to –7°C.
- Many growers, especially in Tuscany, set hay bales on fire to try to raise temperatures in the vineyards, while in the apple orchards the shoots had been frozen in advance to try to protect them. Some concerns were raised for cereal cultivations.
“Apricots, peaches, kiwis, cherries, pears and apples, grapes and even some vegetables, are the affected crop,” a source told IHS Markit, “the damage is considerable as there have been six-seven nights with temperatures of -3° to -7°C in different regions. The frost hit the whole country: north, centre, south and even Sardinia. The damage might be anywhere between 30-100%, but still not quantified.”

- In Emilia-Romagna, cherry trees in bloom as well as pear and apple orchards, were the most affected together with leafy vegetables for fresh consumption, but also vineyards including the Lambrusco variety. Smaller crops for apricot, plum, peach, nectarine and cherry are expected in the areas of Rimini, Forlì-Cesena, Ravenna, Bologna, Ferrara and Modena. Some damage is already affecting kaki and kiwi, especially in plants without an anti-frost system and anti-hail nets.
- In the Piacenza area, newly transplanted tomatoes for processing were struck by the cold spells, but the damage should be