January 3, 2020 Coffee and Tea Market Report
The C market rang in the new decade with continued volatility as it posted nearly a 5% decline this week. After two “up” weeks, the weakening was pushed along by index fund rebalancing which brought along some expected selling. The trade was quiet with many taking time off to enjoy the holidays. At a quick glance, the 2019 C Market posted a wide range of nearly 55 cents. Most of the year was spent in steady deterioration until the volatility we have seen of late. We anticipate volatility to continue near term.
While we have yet to get into the thick of the harvest, consensus is that the Central American crop is likely to be smaller across the board. It took some time, but this is likely due to less investment in fertilizer and husbandry practices for plants that have not been generating enough income to cover cost of production.
It’s still quiet in the Tea world this week. Many origins are not holding auctions as New Year’s festivities continue around the world. Sri Lanka is one of the few markets that held an auction this week but no news of the outcome as of yet. Although the auction quantity next week will be almost double of this week. Kenya and Malawi will wait until next week for any auctions to take place. Kenya will hold an auction next week with a large quantity coming in at 178,000 packages. India tea centers will also start up with auctions the second week of January. Pay attention to this space in the coming weeks.
For further insight and analysis on current coffee and tea market data, take a look at the weekly report from S&D’s commodities team.