By Nelson Mandela Muhoozi
The London International Financial Futures and Options Exchange (LIFFE) and Inter-Continental Exchange (ICE) Coffee Futures Performance indicate that the coffee market experienced notable fluctuations during the sessions on Monday, August 5 and Tuesday, August 6, 2024.
LIFFE Robusta Coffee Futures
On Monday, August 5, Robusta coffee futures closed higher across the board on the London International Financial Futures and Options Exchange (LIFFE).
The November position ended the session at $4,088 per tonne (about sh15.2m), marking a gain of $5(about sh18,610), while the January position closed at $3,947 per tonne (about sh14.69m), rising by $6 (about sh22,332) from the previous close.
These gains were driven by market sentiment and trading activities that indicated a stronger outlook for Robusta coffee according to LIFFE analysis.
However, the session on Tuesday, August 6 saw a reversal of this trend. LIFFE Robusta coffee futures closed lower, moving in tandem with the New York market.
Despite initial gains, the London market fell back from the highs of the day to trend towards par and eventually settled on a modest near to unchanged firmer note.
The November position closed at $4,029 per tonne (about sh15m), a significant gain of $68 (about sh253,640), while the January position ended at $4,242 per tonne (about sh15.82m), gaining $66 (about sh246,180) from the previous closing.
This mixed performance highlights the volatile nature of the coffee futures market.
ICE Arabica Coffee Futures
The Inter-Continental Exchange (ICE) Arabica coffee futures also saw gains on August 5th. The December position closed at 229.55 US cents per pound, gaining 3.15 US cents, while the March position ended at 228.35 US cents per pound, up by 3.00 US cents from the previous close.
These increases were largely attributed to the reports of smaller Central American coffee exports, particularly from Honduras and Costa Rica.
On August 6th, however, the ICE Arabica coffee futures experienced a downturn. The market was weighed down by reports of an increase in global coffee supplies.
The International Coffee Organization reported that global coffee exports in June rose by 3.8% to 10.78 million bags. As a result, the December position closed at 224.30 US cents per pound, losing 5.25 US cents, while the March position fell by the same margin to close at 223.10 US cents per pound.
The increase in global supplies exerted downward pressure on prices, reversing the gains from the previous session.
Supply concerns, market dynamics
The higher coffee prices on Monday were significantly influenced by concerns over smaller exports from Central America.
The Honduran Coffee Institute reported a substantial 11% year-over-year decline in July coffee exports from Honduras, the region’s largest coffee producer, amounting to 610,669 bags.
Additionally, the October-July coffee exports from Honduras fell by 11% year-over-year to 5.6 million bags. Similarly, Costa Rica’s coffee exports from October-July decreased by 4.8% to 820,283 bags.
According to data from the exchanges, these figures highlighted the ongoing challenges in coffee production and exportation in Central America, contributing to the rise in coffee prices.
Conversely, the session on August 6th reflected the market’s sensitivity to changes in global coffee supply.
The report from the International Coffee Organization on the rise in June’s global coffee exports added a bearish sentiment, leading to a drop in Arabica coffee futures prices.
The coffee futures market on both LIFFE and ICE demonstrated significant volatility over the sessions of August 5th and 6th, 2024.
While concerns over reduced Central American exports supported prices initially, an increase in global supplies soon reversed these gains according to the Daily Coffee Market Analysis Report from Uganda Coffee Development Authority (UCDA).
Bernard Sabiti, a coffee producer and exporter at Bask said this dynamic underscore the complex interplay of regional production issues and global supply changes that continue to shape the coffee market.
He warned that traders and stakeholders must stay vigilant to these shifts to navigate the ever-changing landscape of coffee futures.
August 5, 2024 coffee market prices in $ cents per Lb(pound)
Screen 18- 201.77
Robusta – Screen 15- 196.77
Robusta – Screen 12 – 193.77
Arabica – Bugisu AA 224.55
Arabica – Bugisu A 223.55
Arabica – Bugisu PB 223.55
Arabica – Bugisu B 221.55
Arabica – Wugar 222.55
Arabica – Drugar 203.55
Price (sh/kilo), Exchange rate (1$=Sh3,722)
Coffee farmgate price range in sh/kilo
| Category of coffee | FAQ (Fair Average Quality) | Kiboko | Arabica parchment | Drugar coffee (clean) |
| Price Range | 10,500-11,000 | 5,500-5,800 | 11,500-12,000 | 10,000-11,000 |
