Sep 15

Coffee Weekly Report - 2023 09 15

Recent data from the EU's coffee market reveals notable trends: despite higher imports, coffee stocks saw a 12.6% decline below the average from January to May. However, June marked a rebound with a 3.7% increase, slightly surpassing seasonality.
June's imports recorded a 9% YoY drop, and for the cumulative figure in the 2022-2023 cycle, imports fell by 4.1%, missing estimates by 4.5%.
Apparent consumption between October 2022 and June 2023 showed a positive 3% YoY change, exceeding estimates by 2%.
It’s important to note, however, that the interest rate policies from the European Central Bank amid economic weakening may show up in forthcoming data releases.
This prompts a neutral/bullish sentiment toward the 22/23 cycle, which runs until the end of September, since demand is on a positive path, but with low chances of major upward corrections once final results are released.

In the European Union's (EU) coffee market, a closer look at the data reveals intriguing trends and factors shaping the industry: At the end of June, coffee stocks in the EU stood at 11.56M bags, showing a significant 12.6% deviation below the average. Surprisingly, there was a month-over-month stock increase of 3.7%, which was slightly higher than the expected seasonal change of 2.1%.

In June, the EU imported 3.74M bags of green coffee, marking a -9% year-over-year difference. Import figures also decreased by 8% compared to the previous month, slightly exceeding the expected seasonal decline of -2%. Despite these fluctuations, the EU remains the world's primary coffee importer.

For the 2022-2023 coffee cycle, cumulative imports until June totaled 34.9M bags, reflecting a year-over-year decrease of -4.1%. However, these figures fall short of the estimated 36.5M bags, resulting in a -4.5% deviation. This variance can be attributed to a demand pace slightly exceeding expectations, leading to a -15% change in stocks, despite a -4% change in imports.

Apparent consumption, consolidated from October 2022 to June 2023, reached 34.5 million bags, indicating a positive 3% year-over-year change. This exceeds the estimated 33.6 million bags by 2%. It's important to note that the apparent consumption metric discounts re-exported coffee, which decreased until April but has since picked up.

Lower overall stocks in the EU may be linked to the increasingly high cost of money, driven by elevated interest rates. The European Central Bank (ECB) has raised interest rates recently, but market sentiment suggests potential future rate cuts as the economy weakens.

In summary, the EU's coffee market presents a nuanced picture. Despite some unexpected fluctuations, demand has outpaced projections, leading to lower stocks. This balancing act is expected to continue until September, with market players closely monitoring economic developments and interest rate policies.

In the EU's coffee market, recent data reveals intriguing dynamics. Despite higher imports, coffee stocks declined 12.6% below the average from January to May but rebounded with a 3.7% increase in June, slightly above seasonality.

June's imports dropped by 9% YoY, and for the 2022-2023 cycle, imports fell by 4.1%, missing estimates by 4.5%. Apparent consumption from October 2022 to June 2023 showed a positive 3% YoY change, surpassing estimates by 2%. Higher interest rates and expectations of future rate cuts amid economic weakening can still show up in the upcoming data releases, and therefore, the immediate positive deviation from estimates may be lower once the cycle is complete (at the end of September), which leads to a neutral/bullish sentiment regarding the results.

This document has been prepared by hEDGEpoint Global Markets LLC and its affiliates ("HPGM") exclusively for informational and instructional purposes, without the purpose of creating obligations or commitments with third parties, and is not intended to promote an offer, or solicitation of an offer, to sell or buy any securities or investment products. HPGM and its associates expressly disclaim any use of the information contained herein that may result in direct or indirect damage of any kind. If you have any questions that are not resolved in the first instance of contact with the client (client.services@hedgepointglobal.com), please contact our internal ombudsman channel (ouvidoria@hedgepointglobal.com) or 0800-878-8408 (for clients in Brazil only).

This page has been prepared by Hedgepoint Schweiz AG and its affiliates (“Hedgepoint”) solely for informational and instructional purposes, without the purpose of instituting obligations or commitments to third parties, nor is it intended to promote an offer, or solicitation of an offer of sale or purchase relating to any securities, commodities interests or investment products. Hedgepoint and its associates expressly disclaim any use of the information contained herein that directly or indirectly result in damages or damages of any kind. Information is obtained from sources which we believe to be reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. The trading of commodities interests such as futures, options, and swaps involves substantial risk of loss and may not be suitable for all investors. You should carefully consider wither such trading is suitable for you in light of your financial condition. Past performance is not necessarily indicative of future results. Customers should rely on their own independent judgement and/or advisors before entering in any transaction.Hedgepoint does not provide legal, tax or accounting advice and you are responsible for seeking any such advice separately.Hedgepoint Schweiz AG is organized, incorporated, and existing under the laws of Switzerland, is filiated to ARIF, the Association Romande des Intermédiaires Financiers, which is a FINMA-authorized Self-Regulatory Organization. Hedgepoint Commodities LLC is organized, incorporated, and existing under the laws of the USA, and is authorized and regulated by the Commodity Futures Trading Commission (CFTC) and a member of the National Futures Association (NFA) to act as an Introducing Broker and Commodity Trading Advisor. HedgePoint Global Markets Limited is Regulated by the Dubai Financial Services Authority. The content is directed at Professional Clients and not Retail Clients. Hedgepoint Global Markets PTE. Ltd is organized, incorporated, and existing under the laws of Singapore, exempted from obtaining a financial services license as per the Second Schedule of the Securities and Futures (Licensing and Conduct of Business) Act, by the Monetary Authority of Singapore (MAS). Hedgepoint Global Markets DTVM Ltda. is authorized and regulated in Brazil by the Central Bank of Brazil (BCB) and the Brazilian Securities Commission (CVM). Hedgepoint Serviços Ltda. is organized, incorporated, and existing under the laws of Brazil. Hedgepoint Global Markets S.A. is organized, incorporated, and existing under the laws of Uruguay. In case of questions not resolved by the first instance of customer contact (client.services@Hedgepointglobal.com), please contact internal ombudsman channel (ombudsman@hedgepointglobal.com – global or ouvidoria@hedgepointglobal.com – Brazil only) or call 0800-8788408 (Brazil only).Integrity, ethics, and transparency are values that guide our culture. To further strengthen our practices, Hedgepoint has a whistleblower channel for employees and third-parties by e-mail ethicline@hedgepointglobal.com or forms Ethic Line – Hedgepoint Global Markets.Security note: All contacts with customers and partners are conducted exclusively through our domain @hedgepointglobal.com. Do not accept any information, bills, statements or requests from different domains and pay special attention to any variations in letters or spelling, as they may indicate a fraudulent situation.“HedgePoint” and the “HedgePoint” logo are marks for the exclusive use of HedgePoint and/or its affiliates. Use or reproduction is prohibited, unless expressly authorized by HedgePoint. Furthermore, the use of any other marks in this document has been authorized for identification purposes only. It does not, therefore, imply any rights of HedgePoint in these marks or imply endorsement, association or seal by the owners of these marks with HedgePoint or its affiliates.

Coffee Weekly Report - 2023 09 15

Coffee demand in destinations | Part II – European Union

Image 1: Coffee Stocks – European Union (M bags)

Image 2: Coffee Imports – European Union (M bags)

Image 3: Coffee Imports – European Union (M bags)

Image 4: Apparent Consumption – European Union (M bags)

In Summary

Weekly Report — Coffee

Disclaimer

To access this report, you need to be a subscriber.

Pages

Terms

Contact us