The NYC coffee market is crazy at the moment
Up and down like a yo-yo, it is impossible for the traditional green coffee trader to forecast what will happen next The market made 25 year highs earlier this year at + 310 c / Lb for Arabica green bean It subsequently eased and then in August staged a remarkable recovery, rising steadily for 17 days on the trot, back into the 290’s
The market then subsided again into early September falling to the mid 230’s, then rose once again before fund and spec liquidation took the market back to the low 230’s! This recent move was due almost totally to macro economic uncertainty from the € zone which encouraged funds and specs to liquidate their positions
Low of the day for March yesterday ( 28th September 2011) was 236.15 c/Lb
Looking at recent market moves, we could therefore expect the market today to close higher…perhaps 3 > 4 c/ Lb ….. and we may also expect any rally to continue on Friday – which again traditionally has become a day of significant market moves…! Recent trends seem to suggest that whenever the market reaches its current ‘low’ in the 230’s, specs and funds are encouraged to return to the market to buy it up and then sell… hence the current ‘see- sawing’ of the market up and down
A safe estimate to year end would be to expect a trading range of perhaps just below 230 to c. 295 c/Lb. Some pundits forecast 210 > 215…I am not so sure we will see this level. Fundamentally, the coffee market is in good shape and the NYC should be lower…
Despite a c 40% reduced Indonesian crop… we have the good news of better crops from Colombia and Central America and the fact that forecast good rains in Brazil over the next few weeks, should set the crop for a bumper 2012/13 season
Uncertain macro economics – for example with today’s German vote on the + 300 B € bailout package for Greece – could however again take over the market…
So, in summary, it seems that any purchase in the 230’s has to be seen as a fair coffee purchase today. For the consumer the result of recent market moves has been higher prices both in the supermarkets and in the burgeoning cafe society trade. Despite the credit crunch, £2-50 for a Cappuccino still seems a fair purchase, if footfall in unit and the rise of new concepts such as Costa Express are anything to go by… the question is how much longer will this trend continue and when will we next see genuine innovation in the espresso based cafe market?
For those of you consuming espresso at home the best value method of preparation has to be the ESE pod Simple, easy , portion controlled, spanking fresh espresso just when you need it! Forget the supermarket loose product espresso offers and invest in some ESE pods from your nearest retailer or even better on line!