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December 17, 2021 COFFEE MARKET REPORT

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January 12, 2022

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Westrock Coffee Coffee & Tea Market Report

Coffee Market

The C market saw a quiet week, by recent standards, as it continued to consolidate. Prices drifted in a fairly small, five cent range on modest overall volume. Much of the activity was industry positions on both sides of the market liquidating. Larger speculators were not particularly active and saw their overall positions change little. At the moment producers remain sidelined and there is little to pressure prices, but conversely potential buyers are awaiting the next actionable piece of news. There was little in the way of news. The Brazilian Ministry of Agriculture (Conab) released their estimate for the coming year’s production calling for 46.9 million bags citing drought and frost damage. This is a four-year low. Conab’s estimates in generally establish the low end of the range though and the market will look for more survey results in the weeks ahead to form a real opinion on production potential. Physical activity remains light, and the market tone is certainly turning toward holiday mode. The macro picture provided little input this week.


Technically the market ended in a negative stance with indicators across the board pointing lower. Prices continued to dance along a trendline though that is growing in significance (the more touch points on a trendline the more impactful it is) as support held, but the market closed on the line. Chart patterns continue to call for a deeper correction short term though remain open to new highs overall. At this point a break of the trendline (see chart below) should see a more aggressive selloff and could target the 220/210 area. Would view such a move as an opportunity to extend coverage as needed. Longer term would continue to expect 220/180 to hold the market for some time but that may still be months away. Expect continued volatility and remain cautious against a surge toward new highs in the coming weeks.

Tea Report

Quality remains the prominent driver of buying across tea centers this week.  177,590 packages were offered in Kenya with 14% left unsold.  Most of the well-made teas had increased demand while the plainer types held to the end.  Overall buyers were selective.  The same could be said for Indian tea centers.  Good or stable demand but many buyers were selective of quality.  Northern growing regions has started to cool off and production is falling following seasonal norms.  The South saw good demand as well.  Heavy showers were seen in growing regions, but crops are also decreasing.  Argentina needs rain.  La Nina conditions continue, and humidity remains low.  If the green intake hopes to rebound, the weather needs to change.  Watch this space.

For further insight and analysis on current coffee and tea market data, take a look at the weekly report from Westrock Coffee commodities team.
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January 12, 2022

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