World physical coffee market gains value compared to ICE US

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World coffee exports totaled 10.65 million bags last July, according to the ICO. The volume is 1.7% higher than the same month last year (10.47 million bags). From Oct/20 to Jul/21, world shipments reached 108.97 million bags, up 2.2% from the same period last season, when they totaled 106.63 million bags.

Highlight on the evolution of arabica exports, driven by the record crop reaped by Brazil in 2020. Arabica shipments grew 6.1% and totaled 69.65 million bags. Brazilian naturals total 39.32 million bags, 11.3% higher. As a result, arabica accounts for 64%, and naturals for 33% of global shipments. Robusta exports, on the other hand, fell 4.1% to 39.32 million bags in the same period.

The appreciation in the differentials in comparison with ICE US is clear. This appreciation of the bases reveals a positive detachment of the physical market from the reference of the commodities exchange. The move is more significant for Colombian milds, indicated at +52 cents against ICE US in September. The average premium in August was around +43 cents. Central American milds have advanced much less, going from +34 cents in August to +35.5 cents in September. Brazilian naturals changed from -7 to -6 cents, showing a timid relative appreciation. Positive highlight on robusta too, which reached the average of -87 cents in August and rose to -81 cents in September, reinforcing the idea of ​​relative recovery of robusta prices against arabica, already demonstrated by the advance of coffee on the London terminal in comparison with NY.