General News
In a whirlwind week of political drama, former President Donald Trump narrowly survived an assassination attempt, suffering a gunshot wound to his ear. Despite the incident, Trump has been nominated by the Republican Party to run for the presidency once again.
Meanwhile, President Joe Biden took a brief respite to reconsider his political future. After recovering from COVID-19, he announced that he would not seek re-election. In his stead, Vice President Kamala Harris has officially declared her candidacy, aiming to lead the Democratic Party into the presidential elections scheduled for November 5, 2024.
In Europe, Ursula von der Leyen has been re-elected as President of the European Commission for another five-year term. She emphasized the EU's critical needs in her speech, stating, "The race is on, and I want Europe to switch gears, and this starts with making business easier and faster." Her re-election raises questions about potential changes to the heavily bureaucratic European Union Deforestation Regulation (EUDR). Despite the urgent need for clarity, the long-awaited FAQs remain unpublished. The upcoming summer break and power shifts in the newly elected parliament are likely to delay significant updates on this issue until September, leaving many frustrated.
On Friday, the world experienced the largest IT outage in history, exposing a significant lack of system redundancies across various sectors, including government, healthcare, travel, banking, and fast-food chains. The outage's impact on the coffee supply chain remains uncertain, with freight hubs halting operations for several hours, exacerbating existing pressures. Cargo ports managed to resume operations after a tumultuous morning.
The escalating missile and drone exchanges between Israel and the Iran-backed Houthis are poised to further strain shipping routes around Djibouti and the Red Sea. This conflict has already had significant economic repercussions, with the Suez Canal's annual revenue plummeting by nearly 25% in the latest financial year. Many shippers have opted for alternative routes, choosing to navigate around the Cape of Good Hope to evade the threat of Houthi attacks, bypassing the Suez Canal entirely.
Both coffee futures markets in New York (Arabica) and London (Canephora, also known as Robusta) experienced a relatively uneventful week. This follows a period of high activity, marked by significant volatility and fluctuating prices.
Trading volumes were low, with Arabica prices fluctuating between 240 and 250 c/lb without establishing a clear trend. However, both markets broke out of their ranges on Friday, reaching new one-week lows at 233.60 c/lb for Arabica and 4,380 $/MT for Robusta. Arabica prices closed 4.2% lower at 238.20 c/lb, while Robusta finished the week down 1.9% at 4,530 $/MT.
Coffee stocks in New York and London are rising from their historic lows, indicating initial relief in the tight supply and demand situation. However, the path to complete replenishment remains long.
You can follow the weekly development of prices on the below tables:
Origin News
Honduran coffee-producing regions have experienced consistent rains over the past week, alleviating stress on trees caused by an earlier dry period. This favorable weather is expected to aid coffee cherry development.
Preliminary estimates suggest that the upcoming crop volume will be similar to or slightly larger than the previous one, with a more accurate forecast anticipated in September or October. Export logistics are running smoothly, with no reports of port congestion and normal container availability.
Consistent rains are expected to continue in most production regions this week. Producers report that recent rainfall has significantly reduced concerns about tree stress from earlier dry conditions. However, the impact of heat and dry weather on lower-altitude regions remains uncertain.
Despite the favorable weather, some exporters still struggle with limited access to the coffee needed to fulfill contracts.
Nicaragua's coffee-producing regions are currently experiencing heavy rains, typical for this season. While these rains are generally beneficial, producers anticipate the excessive heat and dry conditions earlier in the year have damaged the trees. Consequently, expectations are for a lower harvest volume and smaller bean sizes compared to the previous season.
On a positive note, export logistics are beginning to improve. Exporters report increased container availability, thanks to container ships navigating past the Panama Canal bottleneck and recent import arrivals easing container shortages.
However, concerns remain about the upcoming harvest. Producers report insufficient cherry development and smaller bean sizes due to delayed rains. Accurate production estimates are still premature, with more concrete figures expected towards the end of August. Some producers may start offering pricing for the new crop at that time. Despite some improvements, exporters continue to face logistics delays due to container shortages.
The Specialty Coffee Association of Panama (SCAP) has raised allegations of cheating among producers in this year's Best of Panama green coffee competition, intensifying an industry-wide debate on "co-fermented" or "infused" coffees.
In a statement on its website, SCAP President Hunter Tedman revealed that four "infused" coffee entries were found to be altered from their natural DNA expression, likely with the intent to score higher using foreign additives. The discovery has sparked concerns about the integrity of the competition and the methods used to enhance coffee profiles.
With water levels rising, the situation in the Panama Canal is gradually improving, and traffic is picking up.
Coffee Production Estimates in Central America