Martin (1992: 33):
Evidence for the fact that the different grammatical classes are performing a related discourse function comes from their context: from their co-text — the inclusion of please and the reply allright; and from the context of situation, where one might well observe goods being exchanged.
In SFL theory, the word 'context' has a precise meaning, which does not include either the co-text, or the material setting of the interlocutors.
Context is the name given to the stratum above the three language strata of semantics, lexicogrammar and phonology/graphology. As such, it is both a semiotic system, and one that is located at a higher level of symbolic abstraction than language. The 'context of situation' is the name given to an instance of context, and the system of which it is an instance is called 'context of culture'.
As such, "where one might well observe goods being exchanged" — which is of the material order of experience — is distinct from the context of situation — which is of the semiotic order of experience.
The SFL term for the material order of experience of interlocutors is material setting.