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Coffee
RNY Market Watch: October Sees Coffee Prices Going Up
Welcome to our October edition of Market Watch! Andrew Blyth & Tom McLaughlin are here to provide you with the latest insight into coffee prices going up, coffee exports, and more as of October 2023.
Coffee Prices Going Up
Coffee prices, as measured by the ICE KCZ’23 contract, have rallied significantly this month. After trading as low as $1.4370/lb. on October 10th, prices reached as high as $1.6905 on October 25th. Though not uncommon for this time of year, reports of dry weather in Brazil have contributed to these increases. Additionally, low inventories of both certified arabica and robusta coffee helped spark this rally. Certified arabica coffee in primarily European warehouses were at 410,171 bags, an 11-month low. Robusta inventories have also reported near-record lows.
However, CECAFE data suggests abundant supplies are being exported from Brazil, following the recently completed harvest. In fact, export registrations for October totaled just over 3.3 million bags as of October 24th, well above the 2 million bags registered for September export reported a month prior. There certainly doesn’t appear to be a shortage of coffee, hopefully generating positive news for roasters with limited forward coverage.
What does this mean for you?
As we’ve emphasized in prior RNY Market Watch posts, being prepared to buy when the market offers opportunities for better prices is the responsible thing to do. We understand if you’re concerned about not committing to coffee in September or early October when the market was in the $1.40’s. That being said, we believe there will be more opportunities to buy at similar levels before the year comes to an end.
The best advice we can offer now is to be prepared for that moment. Let’s work together to forecast your 2024 needs. It will help us ensure that you have the right coffees with the right quantities. We want to be ready to ship them to your door when you need them.
