A Brief Overview of Sucden Financial’s Report: Coffee Crop Update – Navigating the Challenges in Coffee Markets

A Brief Overview of Sucden Financial’s Report: Coffee Crop Update – Navigating the Challenges in Coffee Markets

Sucden Financial is a leading multi-asset execution, clearing and liquidity provider across FX, fixed income and commodities. A report entitled “Modernizing the Coffee Crop: A Bumpy Journey for Coffee Markets.”

According to the report, the coffee industry experienced a rollercoaster ride in 2023, with turbulent prices impacting both Arabica and Robusta contracts. Brazil and Vietnam continue to play a pivotal role, comprising 58% of the total blend. Concerns linger about weather conditions, but it is believed that the majority of the damage has occurred, leading to expectations of a fading super crop. While there is no overall shortage of coffee, uncertainties in certain regions create doubts about accessibility.

Executive Summary: Global Economic Variances

The US economy remains robust, driven by strong consumer spending and a tight labor market. Inflation is on the decline, with expectations of a gradual easing of monetary policy, starting with a 25bps Fed interest rate cut in March. In contrast, the eurozone teeters on the brink of recession, facing contraction in manufacturing and services sectors. China grapples with low consumer confidence, weaker global demand, and a deepening property crisis. Brazil, despite a 3% growth in 2023, faces challenges in 2024 due to reduced agricultural output caused by adverse weather conditions.

Starbucks concluded Q4 2023 on a positive note, reporting an 8% increase in global comparable store sales and record consolidated net revenues of $9.4 billion. Nestle thrived with strong organic growth, while JDE Peet’s faced challenges with lower sales growth and decreased profit.

Market Outlook: A Cautionary Tale

The coffee market faces uncertainties, primarily influenced by Brazil and Vietnam. Despite concerns about the weather, expectations of a super crop fading, and potential shifts in farmer behavior, optimism prevails. However, the recent rally in prices is deemed overdone, and a marginal retracement is anticipated in the near term. Changes are noted in other coffee origins, with expectations for production in India, Indonesia, and Central America.

Macro Overview: US Economy Resilient, Global Variances Persist

The US economy defies recession concerns, showing positive Q1’24 outlook with resilient output growth. Consumer spending remains strong, supported by a robust labor market. Inflation decline and expectations of a 25bps interest rate cut in March contribute to an optimistic economic forecast. The global scenario, however, presents challenges, with the eurozone on the brink of recession and China facing economic hurdles.

Corporate Results: Starbucks Shines, Nestle Excels, JDE Peet’s Faces Challenges

Starbucks celebrates a successful Q4 2023, recording an 8% increase in global comparable store sales and reaching record consolidated net revenues. Nestle experiences strong organic growth, especially in emerging markets and e-commerce. In contrast, JDE Peet’s confronts challenges with lower organic sales growth and decreased underlying profit.

Arabica and Robusta Dynamics: Price Swings and Crop Insights

The market witnesses shifts in demand between Arabica and Robusta, leading to multi-decade highs and lows in contract prices. Weather concerns and the threat of El Nino impact the market sentiment. Despite uncertainties, the outlook for Brazil and Vietnam remains positive, with expectations for a retracement in recent price rallies.

Conillon Challenges: Weather Woes and Crop Impact

Dry weather in northern Espirito Santo raises concerns about conillon cultivation, with potential damage estimates ranging from 15% to 35%. Limited irrigation options and government restrictions exacerbate worries about conillon production.

Inventories and Commitment of Traders: Balancing Supply and Demand

Certified stocks witness drawdowns, supporting upward momentum in prices. Attention shifts to supply stories, with Central American shipments slow but expected to pick up. Commitment of Traders positions indicate high net lengths for Arabica and Robusta, with a cautious outlook for potential price vulnerabilities.

In conclusion, the coffee market faces a complex landscape influenced by global economic trends, corporate performances, and crop dynamics. Navigating through uncertainties, industry players remain cautiously optimistic while anticipating potential retracements in recent price rallies.

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[:ar]Privacy Policy for qahwa world At qahwaworld, accessible from qahwaworld.com, one of our main priorities is the privacy of our visitors. This Privacy Policy document contains types of information that is collected and recorded by qahwaworld and how we use it. If you have additional questions or require more information about our Privacy Policy, do not hesitate to contact us. This Privacy Policy applies only to our online activities and is valid for visitors to our website with regards to the information that they shared and/or collect in qahwaworld. This policy is not applicable to any information collected offline or via channels other than this website. Our Privacy Policy was created with the help of the Free Privacy Policy Generator. Consent By using our website, you hereby consent to our Privacy Policy and agree to its terms. 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Privacy Policy for Qahwa World

At Qahwa World, accessible from https://qahwaworld.com, one of our main priorities is the privacy of our visitors. This Privacy Policy document contains types of information that is collected and recorded by Qahwa World and how we use it. If you have additional questions or require more information about our Privacy Policy, do not hesitate to contact us. This Privacy Policy applies only to our online activities and is valid for visitors to our website with regards to the information that they shared and/or collect in Qahwa World. This policy is not applicable to any information collected offline or via channels other than this website. Our Privacy Policy was created with the help of the Free Privacy Policy Generator.

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Another part of our priority is adding protection for children while using the internet. We encourage parents and guardians to observe, participate in, and/or monitor and guide their online activity. Qahwa World does not knowingly collect any Personal Identifiable Information from children under the age of 13. If you think that your child provided this kind of information on our website, we strongly encourage you to contact us immediately and we will do our best efforts to promptly remove such information from our records.[:ru]Privacy Policy for qahwa world At qahwaworld, accessible from qahwaworld.com, one of our main priorities is the privacy of our visitors. This Privacy Policy document contains types of information that is collected and recorded by qahwaworld and how we use it. If you have additional questions or require more information about our Privacy Policy, do not hesitate to contact us. This Privacy Policy applies only to our online activities and is valid for visitors to our website with regards to the information that they shared and/or collect in qahwaworld. This policy is not applicable to any information collected offline or via channels other than this website. Our Privacy Policy was created with the help of the Free Privacy Policy Generator. Consent By using our website, you hereby consent to our Privacy Policy and agree to its terms. Information we collect The personal information that you are asked to provide, and the reasons why you are asked to provide it, will be made clear to you at the point we ask you to provide your personal information. If you contact us directly, we may receive additional information about you such as your name, email address, phone number, the contents of the message and/or attachments you may send us, and any other information you may choose to provide. When you register for an Account, we may ask for your contact information, including items such as name, company name, address, email address, and telephone number. How we use your information We use the information we collect in various ways, including to: Provide, operate, and maintain our website Improve, personalize, and expand our website Understand and analyze how you use our website Develop new products, services, features, and functionality Communicate with you, either directly or through one of our partners, including for customer service, to provide you with updates and other information relating to the website, and for marketing and promotional purposes Send you emails Find and prevent fraud Log Files qahwaworld follows a standard procedure of using log files. These files log visitors when they visit websites. All hosting companies do this and a part of hosting services' analytics. The information collected by log files include internet protocol (IP) addresses, browser type, Internet Service Provider (ISP), date and time stamp, referring/exit pages, and possibly the number of clicks. These are not linked to any information that is personally identifiable. The purpose of the information is for analyzing trends, administering the site, tracking users' movement on the website, and gathering demographic information. Cookies and Web Beacons Like any other website, qahwaworld uses 'cookies'. These cookies are used to store information including visitors' preferences, and the pages on the website that the visitor accessed or visited. The information is used to optimize the users' experience by customizing our web page content based on visitors' browser type and/or other information. For more general information on cookies, please read the Cookies article on Generate Privacy Policy website. Google DoubleClick DART Cookie Google is one of a third-party vendor on our site. It also uses cookies, known as DART cookies, to serve ads to our site visitors based upon their visit to www.website.com and other sites on the internet. However, visitors may choose to decline the use of DART cookies by visiting the Google ad and content network Privacy Policy at the following URL – https://policies.google.com/technologies/ads Our Advertising Partners Some of advertisers on our site may use cookies and web beacons. Our advertising partners are listed below. Each of our advertising partners has their own Privacy Policy for their policies on user data. For easier access, we hyperlinked to their Privacy Policies below. Google https://policies.google.com/technologies/ads Advertising Partners Privacy Policies You may consult this list to find the Privacy Policy for each of the advertising partners of qahwaworld. Third-party ad servers or ad networks uses technologies like cookies, JavaScript, or Web Beacons that are used in their respective advertisements and links that appear on qahwaworld, which are sent directly to users' browser. They automatically receive your IP address when this occurs. These technologies are used to measure the effectiveness of their advertising campaigns and/or to personalize the advertising content that you see on websites that you visit. Note that qahwaworld has no access to or control over these cookies that are used by third-party advertisers. Third Party Privacy Policies qahwaworld's Privacy Policy does not apply to other advertisers or websites. Thus, we are advising you to consult the respective Privacy Policies of these third-party ad servers for more detailed information. It may include their practices and instructions about how to opt-out of certain options. You can choose to disable cookies through your individual browser options. To know more detailed information about cookie management with specific web browsers, it can be found at the browsers' respective websites. CCPA Privacy Rights (Do Not Sell My Personal Information) Under the CCPA, among other rights, California consumers have the right to: Request that a business that collects a consumer's personal data disclose the categories and specific pieces of personal data that a business has collected about consumers. Request that a business delete any personal data about the consumer that a business has collected. Request that a business that sells a consumer's personal data, not sell the consumer's personal data. If you make a request, we have one month to respond to you. If you would like to exercise any of these rights, please contact us. GDPR Data Protection Rights We would like to make sure you are fully aware of all of your data protection rights. Every user is entitled to the following: The right to access – You have the right to request copies of your personal data. We may charge you a small fee for this service. The right to rectification – You have the right to request that we correct any information you believe is inaccurate. You also have the right to request that we complete the information you believe is incomplete. The right to erasure – You have the right to request that we erase your personal data, under certain conditions. The right to restrict processing – You have the right to request that we restrict the processing of your personal data, under certain conditions. The right to object to processing – You have the right to object to our processing of your personal data, under certain conditions. The right to data portability – You have the right to request that we transfer the data that we have collected to another organization, or directly to you, under certain conditions. If you make a request, we have one month to respond to you. If you would like to exercise any of these rights, please contact us. Children's Information Another part of our priority is adding protection for children while using the internet. We encourage parents and guardians to observe, participate in, and/or monitor and guide their online activity. qahwaworld does not knowingly collect any Personal Identifiable Information from children under the age of 13. If you think that your child provided this kind of information on our website, we strongly encourage you to contact us immediately and we will do our best efforts to promptly remove such information from our records.[:]
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