OfBusiness Coffee Dailies

23^rd June’23

Price

• Coffee prices at Chennai Port:
  -Robusta G1: 18-16 is priced at $3145/mt
  -Robusta G2: 16-14 is priced at $3030/mt
  -Robusta G3: 14-12 is priced at $2930/mt
  -Arabica is priced at $5245/mt

Demand and Supply

• Coffee prices declined for the second consecutive session as favorable weather forecasts in Brazil eased concerns about frost and assured the continuation of the country’s coffee harvest.
• Recent heavy rains in Brazil may have caused a delay in the coffee harvest, but new forecasts indicate that the upcoming weeks will be dry, potentially improving the harvesting conditions.

News

• London futures closed at $2798, showing a 1.41% increase from the previous price of $2759. Throughout the day, the trading range fluctuated between $2731.00 and $2799.00.
• In contrast, US Coffee C Futures experienced a decline of 1.38%, closing at 169.88. The trading range for the day varied from 168.65 to 172.70.
• The International Coffee Organization (ICO) is conducting benchmarking studies on living incomes, focusing on small-scale farmers in key coffee-producing countries such as Vietnam, Mexico, Indonesia, and Ethiopia.
• Starbucks plans to create an innovation and sustainability hub in Costa Rica at its Hacienda Alsacia coffee farm. This hub will provide training and resources to employees, students, researchers, and business leaders, enabling them to address social and environmental issues within the coffee industry.
• Despite Luckin Coffee’s efforts to improve its performance, the company’s stock price has significantly underperformed this year. It has entered a bear market, experiencing a decline of over 33% from its earlier position. Overall, the stock has lost around 15% of its value this year, while Starbucks has only suffered a loss of less than 1%.

OFB’s Opinion

• Given the recent decrease in coffee prices due to favorable weather forecasts in Brazil, it may be a good time to consider purchasing coffee. The concerns about frost have been alleviated, allowing farmers to continue the harvest.
• While there has been a slight increase in robusta prices, they are expected to stabilize soon.