Back in February 2018, we visited the Sidamo coffee producing region together with our Ethiopian Partners, Moplaco. During this trip, besides visiting producers, we were introduced to one of the projects that Moplaco has developed in this region in collaboration with the local community: The Sergera Elementary School.

This school was built over 8 years ago and its intention was to create an environment that would encourage children to attend classes. Year by year, attendance has improved and now about 2000 children attend the school. Since its early beginnings, the school has significantly improved but as the people at Moplaco put it, "it is an ongoing feat".

The school operates on two shifts, morning and afternoon, in which 1000 children attend at a time. Currently, it has 10 classrooms of which only 2 have concrete floor, the remaining have a sandy dirt floor covered by wood straps. This type of flooring, although cheap is the perfect environment for fleas to nest, which represents a problem to already overcrowded classrooms.

At List + Beisler, we believe in fostering sustainable communities within the coffee industry. On this occasion, we have decided to collaborate with Moplaco and the Community of Sergera to help renovate further classrooms, improve the floors and walls as well as provide them with furniture, with the aim of creating a safer and healthier environment for the children; a space where they can learn and work in better conditions.

The project will span from March 2018 until December 2018 and during this time, we are tasked with managing the overall project design. Moplaco will collaborate as manager of the overall project while the community of Sergera will be involved as workers.

We believe that bettering the overall existing infrastructure will give children the opportunity to learn in proper conditions.

Stay tuned for updates on the project.

In Feb 2019 we hosted Germany's very first Q-Arabica Course and Exam at our SCA-Training Campus in Berlin. Twelve participants from all over Europe practiced and got tested in 19 different disciplines in order to receive the most respected certification in coffee sensory: the Q-Grader.
Since there was such great demand we are already planning another Q-course in the second half of 2019. Please get in touch with us in case of interest.

Tanzania, August 2019

Right on time for the first days of harvest, we went to the north of Tanzania to have a look at what to expect from the upcoming crop. This was also our first visit to the Edelweiss farm – plenty of things to be excited about!

Check out the route on this map.

Machare Estate, Kilimanjaro. Starting off in the Kilimanjaro region, we were welcomed with unusual sunshine for these times. Machare Estate allows you to have a cup of coffee with a direct view onto Kilimanjaro. The farm is surrounded by two rivers and nestled on the lush slopes of the Kilimanjaro Mountain. Bente, the owner of Machare, aims to cultivate 100 % organically certified coffee in a few years. She has quite some talent to teach herself things that go beyond her in-depth knowledge of coffee: an irrigation system that supplies the whole plantation with only one pump and a Tanzanian-tailored organic fertilizer are only two of the projects she successfully executed in the past years. Imagine a farm that has experimented with so many best practices from all over the world, that it is considered state-of-the-art coffee processing in East Africa. This results not only in a unique set-up involving much of the surrounding communities but also in a high-quality cup that constantly convinces with beautiful aromas and high complexity. Machare's coffees are full of tomato, bergamot and berries that play with smooth citric acidity. We have had these coffees for several years now and can only support her engagement that reflects these colorful aromas in one cup.

During our visit in August, parts of the Machare Estate had ripened much earlier than in previous years. Picking in lower altitudes had already begun. Not only on Machare, but also on the many surrounding smallholder farms, people had started to pick the first ripe cherries. Samples should come to our lab in November, first coffees should reach our warehouse in Germany by March.

Last year, we entered a joint project to strengthen Machare's surrounding communities. To us, a strong coffee community with established infrastructure enables synergies as well as stable supply from the region. The goal of the project was to imrpove coffee processing for Machare's neighboring Central Pulping Units (CPU's). These CPU's are owned and operated by the surrounding smallholder farmers to depulp, ferment, wash and dry the parchment of many in one facility. Together with Bente, we decided to supply the CPU's with shade nets and plastic canvas to support their drying processes on African drying beds. Originally, shade nets were used in olive processing, covering the olives and drying them in a more gentile way. Farmers at the Kilimanjaro already dry their parchment in the shade of many trees. Nevertheless, these nets still come in handy. Drying the parchment involves regular turning to ensure constant quality. Placing the parchment on nets rather than directly on wire has several advantages:

keyboard_arrow_rightThe wire is hard to replace or repair as the material is rising in price

keyboard_arrow_rightHandling becomes easier, no beans are missed out on or fall through the wire, parchment can be poured all at once

keyboard_arrow_rightAlready tucked in nets, parchment can be quickly wrapped in canvas in order to protect from rain and humidity at night

The CPU's range in size: the biggest one in the area gathers 74 farmers while others collect the cherries of 10 farmers only. A total of 158 shade nets and 100 plastic canvas were given to 13 CPU's neighboring Machare. Using the shade nets means another step to professionalization and towards a more consistent quality. Easing the work of coffee farmers supports keeping the farm job attractive for generations to follow. Ensuring a stable coffee infrastructure usually creates greater coffees for roasters and coffee lovers. Thank you Bente for your support!

Smallholder cooperatives, Kilimanjaro. Our second visit took us a bit east of the Kili to the producers of our regional coffees "Kulala Kifaru", "Lulu Kaskazini" and "Mamsera Amcos". While the first two coffees represent a mix from several cooperatives, Mamsera Amcos coffee stems from a single-cooperative.
Seven members of the UTZ-certified Mamsera Amcos welcomed us at their headquarters and warehouse. Their modern organization is led by a female manager and supported by a retired accountant of the Tanzanian Coffee Board. In total 2,000 members bring their parchment to the cooperative to be weighed and sold. A similar set-up was found at another cooperative called Mamba South Cooperative. We got to speak to several farmers and members of the cooperatives. All of them named similar challenges they are currently facing: costs for fertilizers, aging trees and especially the youth leaving to the cities.

To tackle these challenges, the cooperatives have come up with practical solutions: regular trainings teach the farmers how to produce their own fertilizers as done at the farm of Christian Arestides Massae (see picture). In cooperation with an NGO, they are also setting up a nursery to slowly replace some of the 100-year-old trees by fresh and more productive ones. In addition, the farmers exchange their experiences in pruning with "promoter farmers" within the cooperatives. Convincing the youth to follow in coffee growing remains the most challenging problem though. By employing young people, the cooperatives try to create a bridge between the generations. They also award the best 45 farmers as an incentive for good quality and prestige. Yet, according to them, the average age of a coffee farmer in the Kili area currently lies above 60. Next to climate change, we also consider this as one the critical points for future coffee production. The cooperatives have done a great job in this area and we hope to have a continuous coffee flow in the future, too!

By buying these coffees, you certainly contribute to supporting the smallholder farmers from these cooperatives, too. Coffees from this area tend to be slightly floral and come with an intense citric acidity. We expect the first samples from this area in November and are excited to see what this year's production will bring!

Edelweiss Estate, Ngorongoro Crater. Heading west from Moshi, our next destination led us to the Arusha Coffee Mill. This dry mill is owned by the Edelweiss Estate and mills the parchment of 4-5 neighboring farms next to their own. We got to cup the first Edelweiss lots from lower altitudes. Neel Vohora, the third generation owner of the farm, loves to experiment with different processing styles. This upcoming crop there will be refreshing samples of carbonic maceration, anaerobic fermentation and honey coffees to be checked out. First samples should reach us in the second half of September, with shipments reaching us in Jan/Feb.

The Edelweiss Estate consists of two neighboring farms: Edelweiss and Helgoland/Ascona. The funky German names are a heritage from German settlement in the early 20th century. Both farms are adjacent to the Ngorongoro Conservation Area with an abundance of wildlife such as elephants, buffalos, lions, the endangered black rhinos and zebras. This wildlife is both a blessing and a curse. On the one hand, this land remains a diversified part of its natural surroundings. On the other hand, the coffee trees have undergone a quite stringent rejuvenation program over the past ten years, production is said to reach a new peak this year. Yet, buffalos and elephants in particular cut back yields by destroying not only a few trees but sometimes also complete hillsides. Young buffalos that grow horns, are suffering from itching, so they rub their horns on coffee trees. Elephants dig huge holes with their tusks to lick minerals out of the soils. Both farms already dedicate 30% of their area to a natural buffer zone for wildlife protection. It remains tricky though to balance the needs of farmers and wildlife in such proximity. Nevertheless, Neel is positive to find a solution that works for both.

Until then, we keep our fingers crossed that buffalos and elephants are not too keen on the fine cherries Edelweiss has been producing and will leave more of that juicy and complex coffee for us. Stay tuned for some unique rhubarb in your cup!

Sustainability is inseparably linked to our company's DNA. List + Beisler has been promoting and supporting sustainability projects in coffee-growing regions for a very long time.

We mainly focus on coffee-related trainings for coffee farmers. Our primary topics of training include best practices for farm health, harvesting, processing, and caring for coffee quality during production. The main objective of the projects is to improve the farmers' quality and productivity through enhancements of their agronomy and production skills, or "software," such as better pruning techniques and composting methods.

The limitation we regularly face is the existing infrastructure, or the "hardware" – the coffee trees themselves. We typically find randomly mixed varieties that have been planted conveniently, but not strategically optimized for providing the farmer higher quality, more productivity, and efficiency.

This must change if we hope to improve an existing farm's chances of not only having a sustainable business model but especially in our pursuits for improvements. This caused us to begin looking for ways to transform the farm design with those farmers who wish to see these improvements made. After an extensive search, we were able to find an organization specifically addressing these needs utilizing a scientific, progressive, non-GMO approach and potential solutions.

We are very happy to announce our partnership with World Coffee Research (WCR).

We had the great opportunity to meet Vern Long, the new CEO of WCR in Berlin during the WOC. She attended our company's get-together, and with refreshing drinks in our hands, we explored collaborating.

This is what we learned about the WCR: they are a collaborative, not-for-profit research organization, formed by the global coffee industry in 2012. Using advances in agricultural science, it is possible to improve coffee yields, quality, climate resilience, and farmer livelihoods. WCR focuses exactly on this work: they use advanced and applied research in coffee genetics (no GMO!) and agronomy to create new coffee varieties and imagine new agronomic approaches. Adding these new varieties to the farm increases biodiversity at farm level.

Improved and focused diversity does a couple of things:

1) With more biodiversity, a farm is able to weather the storm of new pests as well as a changing climate.

2) With focused variety planting, a farm can plant the "correct" varieties for their specific geography and climatic conditions. This allows a coffee tree to be put into an environment that fits its needs. A happy tree is a healthy tree, and healthy trees produce more and better coffee.

The WCR has an excellent network of leading scientists and institutions in coffee-producing countries around the world. Together, they develop solutions that are quickly implementable and flow straight to innovative and quality-focused coffee farmers.

Not only are we partnering with WCR, but we are inviting you to partner as well!
How can you participate? How does it work?

keyboard_arrow_rightRoasters agree to donate USD 0,01— USD 0,10 per pound (EUR 0,02 – EUR 0,20 per kilo) of coffee purchased through List + Beisler.

keyboard_arrow_rightList + Beisler matches the donation of the roaster with USD 0,01 per pound (EUR 0,02 per kilo) of the coffee purchased through us.

keyboard_arrow_rightList + Beisler keeps track of coffee sales to roasters, adding however many cents per pound/kilo the roaster has indicated to the coffee purchased. The contribution is included as a cost of doing business on the roaster's invoice, similar to docking costs, brokerage fees, or warehousing costs.

keyboard_arrow_rightList + Beisler collects the funds and disperses them to WCR four times a year.

keyboard_arrow_rightOnce set up with List + Beisler, there is no work for you.

You can find more info on worldcoffeeresearch.org or contact us at any time!

Blog by: Philip von der Goltz, 14.10.2021

Being in charge of sustainability, marketing, and digitalization at List + Beisler, these were special weeks for me. More than 20 years ago, I started working in the beautiful world of coffee. I was only a couple of weeks into the new job when international coffee prices reached their historically lowest levels of 41.50 c/lb. This was in December 2001. Back then, it looked like the end of the coffee world to me. Luckily, I was proven wrong!
Extreme price volatility is one of many factors directly affecting everyone's lives and businesses in the coffee value chain. However, the most fragile member in our community is the coffee farmer, particularly the smallholder farmer. Coffee farmers depend on the international coffee prices and Mother Nature's mood, local currency volatility, and political developments. Many factors come together and are often far beyond their influence.

Coffee: a complex body of knowledge
A thorough understanding of the coffee world is a time-intense endeavor yet key to improving your own knowledge and your decision-making capabilities. In my own journey, I had the privilege of learning from some of the industry's bests. Still, there is plenty of room for further development. After all these years, I came to at least one firm belief: coffee is a livelong-learning process; the more you know, the more you realize there is more to learn and understand. The complexity of this global business creates an ever-evolving and changing reality on production, trade, consumption, and many other components of the magical elixir. Knowledge needs to be adjusted and updated constantly.

So, how to start and what to learn? The nature of complexity is that it is hard to summarize and simplify. Coffee grows all over the globe and is consumed in many ways. Suppose you want to understand not only your own perspective but genuinely thrive on the job. In that case, it is crucial to get ideas, thoughts, facts, and science-based insights combined from as many professionals as possible. Hence, choose your sources wisely.

Back in 1992, the first Coffee Guide was published by the United Nations' International Trade Centre (UN/ITC). It turned into the leading source of information on coffee matters for professionals. It was a commodity handbook, mainly written by Jan van Hilten and Morten Scholer. After the initial success, they continued and developed two additional coffee guides (published in 2002 and 2012) together with a team of industry experts. This – in my opinion – fantastic work provided the coffee industry with detailed knowledge, providing an invaluable asset for the coffee world.
Almost 10 years have passed since the last publication. It was not only time to update information but also to adjust to new realities.

Source: ITC "Building on the legacy: From commodity handbook to comprehensive working tool."

How it started and team-building
Eighteen months ago, Hernan Manson, head of UN/ITC's Alliances for Action unit, asked me to take over this immense task of updating ITC's Coffee Guide. As honoring this task is, it is also challenging. On day 1 of this project, Hernan and I had just started scoping the depth of this endeavor when we slowly realized the dimension of the work on our plate. The vast amount of topics to be covered made me recall a saying from a teacher during my school days: "You don't need to know everything; you just need to know where to find it!". And so we started brainstorming on the individuals with whom we wanted to work together. We built a fully dedicated and brilliant core team: Sarah Charles as my principal co-author, editor, and creative powerhouse. She is a well-known writer, having already worked on several coffee publications. Martina Bozzola, an outstanding academic, the most charming professor in economics and agriculture at the Queen's University of Belfast, and a senior research associate at Zurich University for Applied Science. Tommaso Ferretti, an expert on sustainable trade finance, finished his PhD at McGill University and became a father when creating this new guide edition. He surely had very short nights, but not only due to the newborn baby. Eleni Gerakari, getting all our thoughts and ideas into actionable work and getting some order into our creative mess. She is an invaluable asset to all of us! Last but not least: Neil Rosser – the data master. His knowledge goes back to more than 30 years of profound insights into the numbers that make the world of coffee go round.
Next to our core team, we engaged a highly professional and committed group of over 70 industry experts. The range is wide: from coffee farmers, cooperatives, exporters, importers, roasters, coffee shops, consultants to academia, international institutions, NGOs, and associations of all sorts. We are proud to have covered the whole coffee stakeholder community. This network of highly-passioned coffee lovers is one of the core assets of the new guide.

What is new?
Let me give you a quick glimpse of what is new:
• Sustainability is a core topic, with an attempt to guide the industry towards the new normal
• Latest statistics and trends: Production numbers are split into three groups that differentiate between standard, premium, and specialized coffees.
• There is a focus on user-friendliness. Eight independent modules with a corresponding toolbox adding practical advice and case studies.
• A new chapter on the latest innovations is now part of the guide. This mainly involves the digital side of the business.

After an intense 18 months, I am beyond happy to finally launch this new edition. I stand amazed and thankful to all of you who have supported us in getting this mammoth project done! With this Coffee Guide, we set the cornerstones for a new legacy and hope to have contributed to a better understanding of the coffee world for professionals all along the value chain. The challenges of the next few years will increase and become more severe. May the new Coffee Guide help us in finding proper and sustainable solutions.

Where to find it?
No other day could have been better for officially launching the 4th edition of The Coffee Guide than International Coffee Day (October 1, 2021).
You can download "The Coffee Guide, 4th Edition" for free here.

Looking forward to your comments and impressions!

October 2021

While the Climate Change Conference COP26 is taking place in Glasgow and clearly shows the importance of keeping sustainability at the core of our actions, we are happy to tell you about our findings after coming back from an extensive field visit in our Farming Accelerator project in Southern Ethiopia.
This project has been running for more than a year now. It started just before the Covid-19 related lock-downs in March 2020. Despite all the restrictions related to the pandemic, we could adapt to the necessary hygienic precautions and begin with the much-needed work in that part of Ethiopia.
The principle of the project is simple and smart: we partnered with UN-ITC, Enveritas, and COQUA to tackle the most evident sustainability challenges faced by smallholder coffee farmers in Southern Ethiopia. We selected six specific coffee regions in Yirgacheffe and Sidama, known for their outstanding quality. Using artificial intelligence, satellite technology, and in-person interviews, Enveritas can provide us with accurate and transparent data on the farmers' situation. Based on this information, we developed a set of trainings together with UN-ITC and COQUA. These trainings cover two main areas, and we call them:
Sustainable Productivity Acceleration, covering among others:

• Good agricultural practices
• Product quality consistency

Farming as a Family Business, creating awareness on:

• Basic Financial Literacy (accounting and record-keeping)
• Income diversification and business development

All training is inclusive and targets all members of the family living and working on the farm. Youth and gender are equally involved.
Once the training modules are refined, it remains a challenge to deploy the training. We have recruited several farmer trainers, young enthusiastic agronomical professionals from the towns who are well-connected within the local communities. They get trained by a senior agronomist and experienced coach. The project counts with 60 demonstration plots where the farmers are invited to attend the training. The farmer trainers explain the methodologies, and then the farmers and their families can experiment by themselves under the supervision of the farmer trainer. Each farmer trainer trains a group of farmers. Thanks to this methodology, we can provide training for 1,800 farmers in the region.
We have already accomplished composting pits on all demo plots, and farmers are already adopting these new techniques on their land. They have also learned how to prune or stump a tree and understood the importance of having young and strong plants to accelerate productivity. Most of the smallholder farmers are not taking any notes on income and expenses, and therefore they are not able to accurately assess the results of their work. To better manage the farm, though, it is crucial to understand basic numbers coming from income and expenses. This is why we are also training this. And usually, women and the younger generation are very prone to understand the importance and impact of this exercise.
Now, once the project runs, it is essential for all participants – from farmer to roaster - to access these coffees. Systemic change is embedded through the continuous purchase of these project-related coffees.
This is what we define as "Sustainability as a Service" (SaaS) – with a bit of tweak from its original acronym ;-). In a nutshell: excellent coffee quality, sustainably produced and sourced from tree to cup.

Regions visited:
We started the journey flying from Addis Abeba to Awasa. From there on, we drove south towards Dila. Departing from Dila, we went to the coffee fields located around the small villages (called Kebeles) of Nurakorate, Kumato, Adame, Gotiti, and Chelchele. We visited 15 demonstration plots and farms surrounding these demo plots. We have spoken to over 100 farmers during our field visits and interviewed them and the farmer trainers to better understand their needs and check the efficiency of our training service provided.

 

Costa Rica

• Presidential elections took place in Costa Rica on February 6, but none of the candidates could obtain at least 40% of the needed votes. Hence, José María Figueres and Rodrigo Chaves Robles, the two candidates with the highest votes, will be facing a second (and final) round on April 3.
• In all significant coffee-producing regions of Tarrazú, Central Valley, Western Valley, Tres Rios, Orosi, Turrialba, Brunca, and Guanacaste, coffee farmers are very busy finishing the harvest, focusing more and more on the post-harvesting activities. Coffee production for this season is expected to be around 1.45 million bags.
• Weather conditions continue to be favorable for all farming and processing-related works.
• Dry-mills are working at total capacity preparing the coffee for export. The first export months of the new crop reveal a higher number compared to the same time-lapse of the previous season. This needs to be watched carefully as the exports also include delayed shipments of the last crop.
• The main ports of Moin and Limon face the same problems. Lack of containers, overbooked vessels, and increasing freight rates make delayed shipments almost the new normal.

Guatemala

• On February 16, an earthquake of 6.2 magnitudes occurred near Guatemala's former capital Antigua. Two people died, landslides were triggered, and trees covered the roads.
• The region has recovered pretty well from the two hurricanes, and infrastructure has been widely restored, allowing workers and agricultural inputs to reach the farms in time.
• The 21/22 harvest is looking very good, and production numbers circulating among experts estimate a total production of 3.8 million bags of coffee. A bottleneck that needs consideration is the shortage of pickers – particularly in the region of Huehuetenango.
• Some farmers report cherries being affected by Broca. This black beetle, about 2 mm in size, bores tunnels into the cherries and lays its eggs there. Its larvae feed the coffee beans inside the cherry.
• Exporters are trying to fill their short positions and competing in the internal market to buy coffee. This continues to drive up coffee prices, as there does not appear to be enough coffee available to meet all commitments.
• The situation in Guatemalan ports is the same as in most ports around the globe; unfortunately, there are no exceptions, so delays in shipments are to be expected.

Honduras

• On January 27, Xiomara Castro was sworn in as Honduras' first female president. Her left-wing "Libre"-Party ends a 12-year run of the right-wing National Party. The ceremony was attended by important international guests, US Vice-President Kamala Harris among them. Meanwhile, Xiomara is following her anti-corruption plea and arrested ex-president Juan Orlando Hernández on drug trafficking charges. His younger brother Tony Hernández has already been sentenced to lifelong imprisonment in the US – also for drug trafficking.
• Scattered but persistent rains have encouraged a pretty uneven maturation process of the coffee cherries over the last few weeks. Pickers need to collect the cherries in multiple laps. This takes longer and adds costs for the farmers. In addition, the cherries may still be green when picked, which undoubtedly affects the quality of the final product. Weather forecasts for the upcoming week show more sunshine on the radar.
• Nonetheless, the harvest is almost complete in the lower altitude regions. In the higher regions, however, harvesting is expected to continue through next month.
• The Instituto Hondureño del Café (IHCAFE) and the international trade estimate the 21/22 harvest between 5.8 and 6 million bags.
• The coffees that arrive at the dry mills are prepared for export and shipped to the port. Here, the situation has worsened in recent weeks. The ships are overbooked and there are not enough containers available.

Nicaragua

• Similar situation to Honduras. Coffee harvesting in the lower-lying regions is almost complete, while harvesting is still underway in the higher-lying areas. Activities are expected to continue until the end of March. Production for this harvest is estimated at around 2.65 million bags.
• As you surely can imagine, the port of Corinto is no exception to the actual logistical disruption. There is a general lack of adequate containers, and vessels are overbooked or even skipping the port. Some exporters are starting to explore the possibility of shipping their coffees from neighboring Costa Rica or Honduras. But the situation there is not much better. Delayed shipments will be the expected result in a couple of weeks from now.

It's not possible to write about news in the coffee lands without coming across the military invasion of Ukraine. We have seen this too many times in our human history: war is never the answer. Our thoughts and feelings are with everyone, especially our friends and their families, in Ukraine. We hope for a fast end to this unnecessary aggression. Stop the war!

Ethiopia

• The Government has lifted the state of emergency as the situation in the country continues to stabilize. At the same time, there are still some fights in the Afar being reported.
• Grand Ethiopian Rennasaince Dam (GERD) has started to produce electricity for the first time since Ethiopia began the project almost eleven years ago. The dam is built on the Blue Nile, and downstream countries Sudan and Egypt see this as a threat to their own water supplies. Ethiopia's Prime Minister Abiy Ahmed officially inaugurated the first mega-watt produced from this multi-billion-dollar project.
• Washing stations in the coffee regions are ramping up their operations as the season for washed coffees is over now. Parchment is being moved to Addis Abeba, where the dry mills are running at full steam.
• The smaller "Jenfel "dry-mills in the coffee regions are milling the first arrivals of natural coffees. The natural coffees will then be moved to Addis Ababa for additional cleaning and sorting.
• Qualities look very promising so far for the washed coffees. First impressions of the natural season also look very interesting.
• The total production for this season is pretty much in line with the previous season and is expected to bring along between 6.5 and 6.8 million bags.
• Activities at the port of Djibouti continue without any substantial news.

 

Kenya

• This year will be carrying the General elections on August 9. Voters will elect a new President and new members of the National Assembly as well as the Senate and county governors. President Uhuru Kenyatta will not run for candidacy anymore as he reached the constitutional limit of two five-year terms. He is now officially supporting his former rival and opposition leader Raila Odinga.
• Kenya has stated interest in purchasing electricity from Ethiopia's mega-dam in the upcoming years.
• The rains have stopped now, and the coffee hills enjoy abundant hot Kenyan sun.
• The harvest is complete now in all coffee regions. Washing stations are cleaning their operations, and the last bits of parchment are drying in the sun.
• Very nice qualities are being delivered to the auction, and our quality team is delighted to cup some exceptional lots.
• Dry-mills of the marketing agents are running at total capacity in two or three shifts per day.
• Kenya's production has been consistently decreasing over the years. Farmland was converted more and more into real estate, and there have been almost no new coffee plantings replacing the former farmlands. This years' production is expected to meander between 780,000 and 850,000 bags.
• The situation at the Kenyan-Ugandan border has relaxed, and trucks are passing again, albeit very slowly.
• Activities at the port of Mombasa have been running without any massive delays till now. With an increasing volume of coffee for export, delays in operations will probably occur.

   

Tanzania

• The Tanzanian Coffee Board (TCB) has reported 970,000 bags as the official production number for the 20/21 harvest. This is 20% less than the previous season during which the country produced 1.2 million bags.
• There is almost no more coffee available, and the auctions are being postponed or canceled due to lack of volume.
• The coffee highlands in the southern part of Tanzania, covering the regions of Mbeya, Mbinga, and Mbozi, are reporting abundant rains and suitable weather conditions for the maturation process of the new crop.
• The port of Dar Es Salaam faces congestion due to a lack of adequate food containers and overbooked vessels, canceling bookings.

 

Rwanda

• Lately, the weather has been very rainy. This caused landslides and blocked roads. Access to the coffee regions has become somewhat difficult.
• The washing stations are getting ready for the beginning of the season, and the first cherries are being delivered. Quantities are still meager.
• The National Coffee Authority (NAEB) has just released the new farm gate minimum price for this upcoming season, and it's 65% above last year's minimum price. Local traders report that cherry prices are already trading above the established minimum price.
• It's far too early to assess the quality of this new crop, but at least the volume is expected to be in line with the last seasons, ranging between 260,000 and 380,000 bags.

We are entering the 12th day after Putin's aggressive invasion of Ukraine, and we continue to be shocked and astonished about this act of terror bringing along a humanitarian and economic crisis. The world continues to be highly nervous, and this is mirrored in volatile prices in the stock and commodity sector. While fossil-fuel-related commodities and grains are registering new record highs, international coffee prices decreased during the last few days. International bans on Russia will make it hard for Russian importers to access coffee (and other goods and commodities alike). According to ITC's coffee guide, Russia consumes about 4.9 million bags per year.
We continue to hope for a quick and peaceful solution to this entirely unnecessary conflict. Say no to war!

 

Indonesia

• The new crop in Sumatra is expected to be smaller than usual. Climatic conditions have been far from ideal, with rains coming in at the wrong time. First crop surveys are forecasting a 10 – 15% smaller harvest – both for Arabica and Robusta alike. The Robusta harvest is expected to start towards the beginning of April and shall bring between 10 and 10.5 million bags, while Arabica estimations range between 1.7 to 1.9 million bags.
• Prices are increasing as exporters are looking to fill their shipping contracts.
• Activities at the ports continue to be slow, very expensive, and tedious.

 

India

• The Arabica and Robusta harvest in India's central coffee production regions of Karnataka, Kerala, and Tamil Nadu is well underway. Up to 80% of the cherries have been harvested so far. India produces about 5.5 and 6 million bags per year, split into 20% Arabica and 80% Robusta. The volume of washed and natural coffees can vary substantially from year to year. Whether coffee is produced as natural or washed often depends on the logistical infrastructure (is there enough drying capacity?) and the prevailing weather conditions (dry vs. wet weather), and, of course, on premiums paid locally for the washed coffees.
• India's main coffee shipping ports of Mangalore and Cochin keep track of actual export volumes. Sporadically we hear of adequate food-container shortage, but for now, things are running quite good from a logistical standpoint. Freight prices continue on the high side. Delays may occur again as we are moving more and more into the intensive export time and demand for food containers and vessel space are on the rise.  

 

Vietnam

• Vietnamese coffee farmers returned to work on their fields after the week-long New Year's Tet celebrations. The Covid-Omicron cases are indeed shooting through the roof in Vietnam. It looks like the celebrations and get-togethers of the last weeks sky-rocketed the spreading among the population. They count a total of 4.43 million cases and are adding daily six-digit figures.
• The largest global producer of Robusta has completed its harvest a couple of weeks ago. Production numbers are forecasted with about 30 million bags.
• Weather has been consistently dry and sunny. Some lower altitude regions need irrigation to initiate the flowering process of the trees. Farmers are - according to the crop cycle - applying fertilizers on their coffee plots.
• Dry-mills are running at total capacity preparing the coffee for export.

 

Papua New Guinea

• Papua New Guinea's Prime Minister James Marape has met Chines Premier Li Keqiang during his official state visit in Beijing. They signed a series of bilateral agreements while intensifying the collaboration of both states and encouraging some Chines investments in PNG.
• There has been an early start to the 2022 harvest. Some first pickings are taking place in the lower altitude regions. Early estimates of this year's harvest look encouraging and forecast about 800,000 bags.
• The last weeks have brought some heavy rains, but good sunshine and dryer days are now taking over the weather radar.

We are now entering the 19th day of Putin's terroristic attack on Ukraine. As fights go on, we see the death toll and the number of injured people and refugees rising while more and more destruction takes place. When will this completely unnecessary act of aggression stop? The world economy will be bearing the aftermaths of this nonsense war for a long time and the humanitarian catastrophe is by far not fully foreseeable now. Sky-rocketing prices for fossil fuels, grains, and other commodities will for massively increase the probability of a global economic and food crisis. Stop the war!

 

Brazil

• Presidential elections are scheduled for October 2022. Early surveys suggest that ex-President Luis Ignacio Lula da Silva is gaining more and more ground on President Jair Bolsonaro – but of course, there is still a long way to go. Journalists foresee an intensive campaign among both candidates.
• The invasion of Ukraine and the sanctions to Russia have driven the cost of fertilizers through the roof. Brazil used to import about 20% of its fertilizers from Russia. Tereza Cristina, Brazil's Minister of Agriculture, has made a public statement on rising food prices due to the Ukraine invasion and the corresponding increase in the cost of production.
• Very good rains in Brazil's coffee-growing regions of Minas Gerais. In general terms, the rains of the last months have restored the humidity in the soils and water reservoirs are adequately filled.
• Coffee cherries are still green and slowly maturing on the trees. The beginning of the harvest is expected in April.
• Carnival holidays have brought along nice festivities and shorter working weeks, increasing the pressure on the logistical bottlenecks at the ports. Delays are still frequent and freight rates for some routes are costly. Direct shipments from Brazilian ports to Russia are being suspended by most shipping lines.

 

Colombia

• Colombia's Presidential campaigning is ramping up. Elections are due in May. Thus, the presidential candidates are positioning themselves. Leftist candidate Gustavo Petro has just won a decisive primary victory. Federico Gutierrez, Sergio Fajardo and Ingrid Betancourt are - among others - still in the field and will do their utmost to gain back lost terrain on Petro.
• According to Colombia's Coffee Growers Federation (FNC), the yearly production from March 2021 to February 2022 fell 5% to 12.1 million bags (-200,000 bags) in a year-on-year comparison. Another reliable source for coffee-statistics is the Ministry of Agriculture: they forecast about 13.2 million bags for the 2022 calendar year.
• The rising prices for manual labor and chemical inputs substantially increase the cost of production for Colombian coffee farmers.
• Climate change is showing its face in the coffee-growing regions again. The accumulated rainfalls for February alone were 40% of the average levels.
• In the southern part of Colombia, the harvest is about to begin. Particularly in the departments Cauca, Valle, parts of Huila, Tolima and Cundinamarca, this harvest is more pronounced than the end-of-year "cosecha principal" (main-crop).
• Activities at the port of Buenaventura, Cartagena and Santa Marta continue to be slow.

 

Peru

• Peru's President, leftwing Pedro Castillo, faces a new impeachment effort against him after installing his fourth cabinet in just seven months. Since his election in July 2021, his presidency had to cope with several corruption scandals and significant political instability.
• Some early pickings of the new crop have been reported in the very low altitude regions in Jaen and Junín. Meanwhile, in the higher altitude coffee growing regions of San Martín, Junín, Cajamarca, Amazonas, Cusco, Pasco, Huánuco, and Puno coffee trees look very healthy and cherries continue their ripening process. 
• The 2022 harvest is foreseen to meander between 3.9 and 4.2 million bags.
• Activities at the port are very slow and cumbersome. As the new harvest is getting ready, there is still a backlog of shipments from the 2021 crop waiting to get shipped. Additionally, there has been a significant increase in freight rates.

There is a terminology used for the current times: VUCA. This acronym comes from the military and stands for Volatility, Uncertainty, Complexity, Ambiguity. The continuing aggression from Putin's troops on Ukraine comes along with accelerating climate change, inflation and economic stagnation, distressed global supply-chains, and a never-ending Covid-pandemic. But there is some light at the end of the tunnel: at least some countries are easing their anti-Covid measures as the Omicron variant proves to be contagious but fortunately not as dangerous as the previous versions. A hint of what "normal" looked like two years ago reappears. Live is getting back to the cities and people are going out and enjoying restaurants and cafés. This is for sure good news!
On the other hand, Ukraine's resistance is moving into its 25th day, and the country's devastation is terrifying. When will this nonsense killing stop? We say no to war!

 

Costa Rica

• Another two weeks to go for the second and final round for the presidential election. On April 3rd, the Costa Rican people will go to the polls and elect either José Maria Figueres or Rodrigo Chaves Robles.
• The harvest is almost complete now, with only some cherries left in the high-altitude regions. The coffee production forecasts for this season range towards 1.45 million bags.
• Last weeks' weather conditions have been sweltering and dry. The rainy season is set to begin shortly and will kick off the flowering process of the coffee trees.
• Costa Rica's main ports, Limon and Moin, face a similar situation as in all other major Central American ports: rising prices for freight rates, lack of equipment, and shipping lines canceling or postponing voyages.

 

Guatemala

• The harvest is completed in the lower altitude regions. There is some ongoing picking activity left in the higher elevation areas of Huehuetenango, San Marcos, Atitlán, Antigua, Acatenango, Coban, Fraijanes and Oriente.
• Activities at the ports are similar to the other Central American ports with a lack of adequate container equipment, overbooked vessels, and rising freight rates.

 

Honduras

• Ex-President Juan Orlando Hernandez was already arrested, now a judge has just granted his extradition to the US. The ex-president is accused - among other crimes - of drug trafficking and will most probably be jailed for life, together with his younger brother Tony Hernandez, in a US prison.
• In Honduras as well, the harvest is almost complete. The only cherries left on the trees can be found in the higher coffee regions.
• There are rumors of a smaller than expected crop. Apparently, the hurricanes Iota and Eta have destroyed more coffee trees than initially thought, and climate change and leaf rust are taking their toll on this season's productivity. However, there is uncertainty about the amount of bags kept by farmers and middlemen in regional warehouses. With no new accurate estimates for the 21/22 crop, our estimate continues to range between 5.4 and 5.8 million bags.
• The beginning of the rainy season will end the actual warm and dry weather patterns of the last weeks.
• The parchment reaching the exporters' warehouse is now being milled, sorted, bagged, and prepared for export. The situation at Honduras' main ports is similar to the other Central American ports. Expect rising prices and further delays.

 

Nicaragua

• After a highly disputable victory of President Ortega, where he repressed almost all of his political opponents, he has now closed 25 non-profit organizations in Nicaragua. It looks as if the president is afraid of critique as he is systemically prosecuting all potential differing opinions.
• Very similar situation to the other Central American countries. The harvest is almost completed, with only small few cherries to be picked in the higher altitude regions of the country. The last picking rounds are expected to be completed towards the beginning of April.
• The situation at the port is a clear bottleneck. There are not enough containers available, and bookings are being rolled or canceled. Delays and rising freight rates are to be expected.

 

International Arabica coffee prices in New York continue to show their volatile character over the last trading week. With a 14 c/lb trading range between the highs and the lows, prices for May (KCK22) are now trading at 215.05 c/lb. Robusta prices deploy a trading range of about 75 USD/MT in the last week and are trading today at 2125 USD/MT (RMK22).
On Mach 16, the US Federal Reserve announced to raise interest rates by 0.25%. This is the first raise since 2018. It has been rumored that the subsequent increase shall be 0.50 points instead of the planned 0.25%, as inflation might not be tamed otherwise. The European Central Bank will probably follow up shortly as spending for arms buildup and Covid-19 related economic measures trigger inflation.
The Heads of State and Government of the North Atlantic Council of the NATO met in Brussels last Thursday, further condemning Putin's nonsense war and making it very clear that an infringement against any NATO partner country will immediately trigger a military reaction against the aggressor. The sanctions against Russia will be enhanced, bringing their economy more severe difficulties. President Biden has visited Poland and made a clear statement in his carefully crafted speech addressing Putin as an aggressor to the world's democracy and fostering his military support towards all NATO member countries.
We are now on the 33rd day of this horrible war and brutal devastation of Ukraine and its people. As we hope for peace, we are also realistic to see that this invasion might continue for an extended period. Over 3.5 million Ukrainians are forced to leave their homes, thousands have died, and more are injured. And all this for what? #WeSayNoToWar

 

Ethiopia

• The Ethiopian army has withdrawn from the Tigray region in the northern part of the country. The war between the rebel forces TPLF and the Government has left the country's economy hungry for US-Dollars as they are badly needed to repay the international debts. As a result, Ethiopia has been facing substantial inflation for the early months of 2022 (inflation rate of 35%) and throughout the previous year. The World Bank's statistics record an average inflation rate of over 25% for 2021.
• As a matter of fact, Ethiopia registered record-setting export numbers: over 5 million bags of the 20/21 crop. It is tough to assess the production numbers correctly since internal consumption is hard to measure. Ethiopia is a coffee-drinking nation, and statisticians say that up to 50% of the coffee is consumed internally. Under this assumption, Ethiopia's coffee production would reach almost 10 million bags(!). But this looks extremely unlikely. It is more probable that a combination of higher production is coming along with lower internal consumption. Ethiopia's coffee production is expected to be about 7.62 million bags for this 21/22 season.
• In the past, coffee was exclusively traded through the Ethiopian Commodity Exchange (ECX). Exceptions were big estates and cooperatives, as they could export directly without going through the ECX. Akrabis (as middlemen and wet mill operators are called in Ethiopia) were delivering the coffee to warehouses belonging to the ECX and traders (local exporters) could buy the coffee from the exchange. This rule has changed this season, and exporters and akrabis are partnering and building vertically integrated supply chains. As a side effect, little coffee is being traded through the ECX. But without the exchange as a highly efficient price-finding mechanism, prices asked by akrabis are now unreasonable to exporters, so little coffee is momentarily changing hands.
• This harvesting season is now completed, and all focus is on the milling and processing parchment and "jenfels" (naturals). Warehouses and dry-mills around Addis are packed with coffee, and processing is at total capacity. Nonetheless, there is little new business going on as there are not many buyers at these current (expensive!) price levels.
• Activities at the port are running quite well with only minor delays.

 

Kenya

• General elections in Kenya are scheduled for August 9, 2022. Voters will elect the President and members of the Assembly, the Senate, and Governors, among others. President Uhuru Kenyatta will step down and is not running for Presidency any longer. It looks as if his longtime opponent Raila Odinga will win the elections for the time being. Kenyatta and Odinga have recently reconciled. Let's hope for a fair election campaign.
• Weather conditions are excellent, with scattered rains in the coffee-growing regions. The upcoming fly crop looks very promising. Harvest is expected to start towards late April beginning of May.
• The main crop post-harvesting activities are entirely finished by now. Warehouses are packed with parchment from the main crop and are milling the coffee and preparing it for export. We cupped excellent coffees, and some of them are already on their way to Hamburg.
• There is a lack of adequate food containers at the port of Mombasa. Shipments are currently delayed.

 

Tanzania

• Tanzania's famous Mara River flows through the Masai Mara game reserve from Kenya's highlands through Tanzania into Lake Victoria. Its waters are heavily polluted, turned black, and brought along dead fishes. Tanzania's authorities are investigating potential sources of contamination. The Mara River is famous for its annual wildebeest migration.
• There is little coffee news from Tanzania as the harvest is complete and sold, and exporters are now focusing on milling and shipping the containers.
• Little change in Dar es Salaam's port logistics. It's not easy to find adequate containers, and shipping lines are overbooked, spontaneously canceling bookings. Delays to be expected.

 

Rwanda

• Good weather conditions with cloudy days and proper amounts of rain and abundant sunshine.
• The harvest has begun early in Rwanda. Particularly in all lower altitude coffee regions in the west, south, and east, the first rounds of cherry-picking are taking place right now.
• Internal prices remain very high, and exporters are looking for additional finance possibilities.

General market situation:
As we enter the 40th day of this nonsense war in Ukraine, another turbulent week in the coffee market with the bulls in the ring went by. This upside market move in New York (Arabica) and London (Robusta) can be attributed to a general picture of uncertainty, and volatility will remain constant for the weeks to come. Shipments from Colombia are still scattered, and Central American shipments do not really want to get going. Delays and rising prices are the consequence.

We will be updating these basic stats weekly: 

The effects of the war have a direct repercussion on the global economy as Ukraine and Russia are essential exporters of grains, fertilizers, oil, and gas. Prices for these commodities have shown a rampant increase, and some grain importing countries such as Egypt and Nigeria will face a severe food crisis. Fuel in Ukraine can momentarily not be used for tractors plowing the fields and drilling seeds.

More than 4 million people were forced to leave Ukraine due to the unceasing aggression of Putin's troops. Cities such as Mariupol and Charkiw are being completely demolished, and civilians are buried alive under the ruins of the shelled buildings. Despite this horrible aggression, the Ukrainians are not giving in and frustrating the military attacks of Putin to a certain extent. But when will this nonsense war end? #StopTheWarNow

 

Indonesia

• The country counts over 270 million people on its multiple islands and is a keen importer of grains from Russia and Ukraine. The war is hence severely threatening Indonesia's food security.
• The fly crop harvest has finally started in the northern Sumatran coffee regions around Aceh.
• Weather conditions have been good, combining abundant sunshine and only a few rainy days. This is always very helpful during post-harvest processing and parchment drying.
• Activities at Sumatra's main port of Belawan continue to be slow, and freight rates continue on the high end of the spectrum.

 

India

• The harvesting season for Arabica and Robusta in India's central coffee-growing regions of Karnataka, Kerala, and Tamil Nadu is moving towards its end. About 90% of the coffee has been picked. Robusta harvesting activities are slightly delayed. But this is entirely natural and in line with the crop cycle.
• Wet- and dry mills are running at total capacity and preparing coffee for export.
• India produces between 5.5 and 6 million bags of coffee, and about 20% is Arabica while the remaining 80% is Robusta. The number of washed (parchment) vs. naturals will vary from season to season and is highly dependent on regional weather conditions, production facilities on the estates, and the premiums paid for the corresponding quality.
• The ports of Cochin and Mangalore report slow and tedious logistics. Freight prices continue on the high side, and the lack of adequate containers is not helping to move the cargo to destinations.

 

Vietnam

• Vietnam is the second-largest coffee-producing country globally and the undisputed #1 Robusta producer. The harvest is complete, and forecasts for the 21/22 crop are meandering between 30 and 33 million bags. Compared to the country's massive Robusta production, Arabica numbers, ranging from 500,000 to 700,000 bags, look almost like a rounding error.
• Up until last week, there were hot and dry days. Farmers started to irrigate their fields to trigger the flowering. But fortunately, some scattered rains during these last days will help reduce groundwater usage for irrigation.
• Similarly to most coffee origins, logistic activities at the port are complicated, delayed, and expensive.

 

Papua New Guinea

• The first pickings of an early crop in 2022 are taking place. Some first parchment deliveries from the Western Highlands around Mt. Hagen reach the dry mills.
• Production numbers over the last years were pretty consistent. Forecasts for the 2022 crop range from about 800,000 bags.
• Little to report on the logistics side as the season is only starting. So far, freight rates look relatively high.

General market situation:

Finally! From Friday the 8th till Sunday, the 10th of April, the famous SCA Expo in Boston took place. It was well visited with more than 10,000 attendees, and everything looked almost "normal". People were meeting in person, cuppings were taking place, and coffee enthusiasts from all over the world were enjoying the fantastique atmosphere of this diverse, open, and international coffee community. Fortunately, it looks like "Covid" was not crossing the mind of the attendees.

At the same time in Shanghai, the citizens of this 25 million metropolis are forced into 10 days of total lockdown. The drastic governments' "Zero Covid" approach is stress-testing China's megacity. The residents complain on social media about a shortage of food and hygiene items. Mothers are detached from their ill babies and children. Workers are forced to sleep in the factories to keep production running. Besides some queues of people forced to be tested regularly, all streets are completely empty. But despite all the efforts to keep the epidemic under control, numbers are rising. The lockdown will surely push the logistic disruption further as delays from manufacturing companies in China – particularly in Shanghai – are becoming evident.

Meanwhile, the brutal invasion of Putin's soldiers into Ukraine continues and reaches a new degree of horror in Bucha, where, after Russian troops withdraw from the northwestern territories of Kyiv, civilians were found dead on the streets. More than 1,200 civilians were killed in this incomprehensible act of crime. And all for what? When will this nonsense war end? #SayNoToWar
The US and the European Union answered Russia's apparent war crimes with more heavy-weight economic sanctions. The sanctions on Russia and the war in Ukraine continue to accelerate the costs of fertilizers and fossil fuels. This will, in turn, increase the cost of production of agricultural goods or – this shall be realized only at a later stage - reduce the output of agricultural produce, further pushing inflationary scenarios for commodities. Additionally, inflation is progressing at a steady rate in most countries. In the US alone, it's been the highest in the last 30 years. Europe's inflation rate is thoroughly following the US lead.

The effects of the coffee market can be seen in the below table.
We will be updating the following basic stats weekly:

 

Brazil

According to a new report by Brazil's National Institute for Space Research (INPE), more than 940 square miles of rainforest were cleared during the first three months of 2022. This is 64% more than the already horrendously high numbers last year. Since President Bolsonaro came into power back in 2019, the destruction of the world's biggest rainforest has surged as his policy-making has continuously weakened environmental protection. At the same time, torrential rains and mudslides in Rio de Janeiro have killed at least 14 people during the last few days. The potential profits made on additional grazing lands for cattle will need to be directly paid back into rebuilding infrastructure and roads in the areas affected by the floods.

In the coffee regions, the abundant rains have been very positive for restoring the coffee trees and the dried-up soils. This will surely be very beneficial for the next crop cycle. But for the upcoming harvest - the one affected by the frosts back in July 2021 – actual forecasts do not look good. The first official numbers coming from Brazil's governmental agency for agricultural supply Conab forecast the 22/23 crop with 55.7 million bags. This is 13% less production when compared to Brazil's biannual crop cycle in 20/21. When looking at the numbers with more detail, there is a netting effect from the Conilon side: the Robusta (should be rightly named Canephora) production is forecasted to be 2 million bags higher while the Arabica production is expected to be 10 million bags below the 20/21 output (38.7 million bags). On the other hand, a crop forecast from Rabobank estimates 64.5 million bags, split into 41.4 million bags of Arabica and 23.1 million bags of Conilon. These are only two of the many reports available in the market today – the ultimate truth will be seen in the export numbers during this upcoming coffee season.

The coffee farmers in the Conilon production regions are getting ready for the beginning of the harvest. Some first pickings are taking place, and more shall come towards the end of this month. The port of Santos continuously reports successful bulk shipments. This way of shipping has brought some degree of alleviation to an otherwise quite congested logistical operation.

Colombia

The country is preparing for the Presidential election on May 29. Gustavo Petro, a former M-19 left-wing guerrilla fighter, won the first voting round against his right and center rivals. Colombia is following the left-ish path of some Latin American countries such as Peru, Honduras, and Chile, which have turned away from more traditional leaders. Change is good if it doesn't develop into another Venezuela.

Some lower altitude regions have started harvesting the Mitaca (fly-crop). More activity is expected towards the end of April. Excessive rains in Huila, Tolima, and the Eje Cafetero (Caldas, Risaralda, Quindio, and parts of Valle del Cauca) are slowing down the crop progress simultaneously at two ends: farms are difficult to access due to the extreme muddy roads and then parchment doesn't dry quickly under the actual climatic conditions.

The ports of Buenaventura, Cartagena, and Santa Marta continue to be relatively slow, and vessels are overbooked. Delays are to be further expected.

 

Peru

Inflation in Peru is pushing price surcharges on gas, oil, and toll roads to a 26-year high level. Protestors clashed with police forces, and President Castillo has installed a curfew in Lima and Callao to restore calmness, but Unions across the country have called for national strikes.

The first pickings of the new crop have started in the lower altitude regions. Coffee cherries at higher altitudes parts are still in the final ripening process. Here the harvest is expected to begin towards the end of April or the first days of May.

Activities at the port were looking good. At least there is enough container availability. Who knows what the effect of the national strikes will be on the logistics; one is sure: it will not speed up the shipping process...

 

General market situation:

The global commodity complex also reflects Russia's aggression to Ukraine as two major commodity-exporting nations are at war. The futures markets brought along major swings as business is becoming more and more difficult. Around the globe, farmers, millers, miners, and drillers alike are all trying to produce as much as possible to satisfy the international demand. At the same time, natural catastrophes arising from climate change and logistical bottlenecks related to Covid-lockdowns accelerate the disruption. The surroundings of Durban, one of South Africa's most important ports, were massively hit by floods and mudslides. At least 443 people have died, and hundreds lost their houses and need to rebuild damaged infrastructure. The city of Shanghai continues its strict curfew policy, and, as this significant international port is only operating at low capacities, further disruptions to global supply chains are expected.

Another week shows the coffee market's volatility bringing a market correction in New York with falling coffee prices, reaching a new two-week low. After President Putin declared peace talks as being "at a dead end," scenarios of ongoing war and destruction have triggered further inflation fears and a diminishing disposable income. Hence, some analysts foresee a drop in coffee demand.
On the other hand, prices for fertilizers are becoming more expensive, and physical availability is rare. This is expected to negatively affect coffee production as the subsequent fertilizer applications will be somewhat "thin" and very expensive if at all available.

The effects of the coffee market can be seen in the below table. These basic stats are updated weekly:

 

 

Central America

As the harvest progresses almost "in sync" among the Central American countries, there is no need for an individual listing of country news. The only exception is Costa Rica, as they have just elected a new president: Rodrigo Chaves. He is practically a newcomer to the political arena and is a trained economist who worked for almost 30 years for the World Bank.

The Central American coffee production complex entered the "Semana Santa" festivities. This will surely slow down the remaining cherry pickings in the higher altitude regions of Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. On the other hand, harvesting work is complete in most low-altitude regions. The 21/22 coffee harvest is approaching its end. The production forecasts meander around the following expected volumes:

 

Research conducted by the International Trade Centre (ITC, a UN subsidiary focused on international trade and development) in The Coffee Guide, one of the most downloaded coffee publications in the world, has split-up global coffee production into three categories: Specialized, Premium, and Standard. Central American coffee production is divided into 14% of Specialized (2.0 million bags), 39% of Premium (5.5 million bags), and 47% (6.7 million bags) Standard coffee qualities.

Intermediaries (Coyotes) and exporters are piling up parchment in their warehouses, and dry mills are running at total capacity preparing coffee for export.
The situation in all major ports is pretty similar: a general lack of adequate container equipment and shipping lines postponing or canceling bookings spontaneously. Delays are to be expected.

General market situation:

On Friday, the world celebrated "Earth Day," and while looking at our blue planet and reflecting on the social and climatic challenges ahead of us, one might wonder if we shouldn't have a daily "Earth Day" instead of "just" an annual reminder...

With the current global developments, it looks as if market volatility has come to stay for long. Many different factors affect the development of prices – some of them being of a more macro-economic character while others come from a more coffee fundamental side. At the same time, an economic recession will most probably hit the European and Central Asian markets. The World Bank is forecasting a 0.9% growth slowdown for 2022.

In a meeting of the International Monetary Fund, Jerome Powell, Chairman of the US Federal Reserve, announced a possible 0.5% rate increase and signaled that more aggressive rate hikes to come during this year. The world's major economies are afraid of the effects caused by inflation, and increasing interest rates is a commonly used method to fight inflationary scenarios. According to some respected economists, the European Central Bank will shortly follow this trend.

The Zero-Covid policy of the Chinese Government forces more than 40 cities into a full or partial lockdown. To put this into perspective: nearly 400 million people have restricted access to food supplies and are only partially (if at all) allowed to get outside their housing facilities. Workers have to sleep in the factories to keep production running. A serious logistic backlog is building up as activities at China's principal port of Shanghai have come to a halt. 

The international coffee prices for Arabica had a 4% upswing on Thursday. The intra-day trading range of more than 12 c/lb continues to manifest the market's extreme volatility.
With all the momentary uncertainties, ranging from Putin's invasion of Ukraine to distressed global supply chains, climate change, and Covid-related lockdowns, markets will most probably remain extremely nervous and change directions frequently.

The effects of the coffee market can be seen in the below table. These basic stats are updated weekly:

 

Ethiopia

The Russian invasion of Ukraine is completely distressing the lives of people living in Ukraine and endangering the lives of millions of people who depend on the imports of grains produced in Ukraine. One region in the world highly dependent on grain imports from Ukraine (and also from the banned aggressor Russia) are the countries in the African horn: Egypt, Sudan, Djibouti, Somalia, and partly Ethiopia.
On another note, the TPLF rebel forces in the northern region of Tigray and the Ethiopian Government have agreed to cease fire and allow aid deliveries to reach civilians in urgent need of food and assistance.

The Ethiopian Commodity Exchange ECX used to be the main channel through which producers of coffee were able to sell to exporters. The ECX also fulfills a regulatory function as it serves as a clearinghouse for buyers and sellers. The coffee gets delivered to ECX warehouses, and a day after the trade is done, the payment is transferred to the seller's bank account. This security mechanism is no longer in place when coffee is traded through vertically integrated supply chains. Here, exporters have their own wet mills or team up with local wet mill owners. These local middlemen are known as Akrabis. Nowadays, more and more Akrabis have become exporters themselves. The number of exporters has doubled from last season and is counting almost 2,000 of them.

Warehouses and dry mills in Addis Abeba are packed with coffee, and production is running at total capacity.
Activities at the port are running without any significant complications—some delays due to a shortage of container equipment and shipping lines canceling voyages.

Kenya

The Kenyan Government has brought along a program to upgrade coffee production and increase exports. The initiative should raise productivity at the farm level, modernize washing stations and dry mills, streamline the governance structures within cooperative societies, and update laws governing the coffee sector.

The main crop season is reaching its end as the last auction will take place in two weeks. There will be a short 30-day break before the auction of the fly crop starts.
Coffee farmers are getting ready to harvest the fly crop. It is also known as the "early crop" and will start in early May. Weather is helping as abundant sunshine allows the cherries to mature on the trees and develop the desired red color. The following weeks shall bring more rain, bringing along the much-needed humidity in the soil.

Activities at the port of Mombasa look good. No significant concerns are to be reported.

Rwanda

Good weather conditions in Rwanda's principal coffee-producing regions in the South, West (next to Lake Kivu), and North speeds up the final ripening of the cherries in the higher altitude regions.
The harvest is in full swing, and wet mills are running at full capacity preparing parchment. Abundant sunshine brings along a homogeneous drying of the washed parchment.

The border to Tanzania is open and functioning without any noteworthy delays. No significant problems are being reported at Tanzania's main port of Dar Es Salaam.

General market situation:

As Putin's invasion of Ukraine continues, we saw another week bringing volatility into the markets. UN chief Antonio Gutierrez met Vladimir Putin and other highly ranked Kreml politicians during his visit to Moscow. Just briefly after he continued his journey to Kyiv, where he met with President Selenskyj, Russian missiles stroke Ukraine's capital. It looks like more devastation, blood, and death will be inevitable before a peaceful solution to this unnecessary war can be agreed upon.

Russia has stopped delivering gas to Poland and Bulgaria, which further propelled international gas prices. Other European countries such as Italy, Austria, and Germany are under pressure as Russia only accepts payments in rubles. Such a transaction by any European company would infringe the imposed sanctions and will indeed bare legal consequences.
The USD has been strengthening compared to other leading international currencies, and at the same time, the commodity complex continues to climb the steep price ladder.
Commodities such as distillates and corn continue to rise and are approaching new all-time highs. The World Bank emphasizes the delicate situation of the global commodity market as the most significant commodity shock since the 70s could materialize rather quickly.

And the international logistic situation also continues to put pressure on supply chains. China's Zero-Covid policy is surely not making the situation any easier. Beijing and other big Chinese cities are entering partial and total lockdown as Shanghai is now entering its fourth week of full lockdown. Activities at the port of Shanghai are minimal. Containers are being re-routed to other ports creating significant congestion. Chinese Labor-Day celebrations are approaching and will last five days, surely adding to the delays.

For eleven consecutive trading days, the Arabica coffee prices have been stuck in a corridor between 230 c/lb and 215 c/lb. Within this bandwidth, the volatility is high, and prices change direction rapidly. This week we saw international coffee prices for Arabica falling more than 2%.

You can follow the principal market changes in the below table.
We update it weekly.

 

Indonesia

As a reaction to skyrocketing prices for basic food and cooking items in Indonesia, the country's government has banned palm oil export. People started to protest as they had to queue to buy cooking oil and food for a long time. 30% of the global edible-oil supply comes from Indonesia. This export ban will surely propel inflation in most consuming nations as palm oil (and also sunflower oil from Ukraine) is an essential component of many food items and beauty products alike, used daily by millions of people.

Indonesia's crop forecast for the 21/22 crop ranges between 11.5 and 11.9 million bags of coffee. The chunk of the coffee produced in Indonesia is Robusta. With an estimated 10 to 10.5 million bags, it ranks 3rd right after Vietnam (about 30 million bags) and Brazil (22 million bags). The Arabica production is estimated at 1.5 million bags. Exports are estimated at approximately 7 million bags of Arabica and Robusta combined.

Farmers are finalizing the cherry-picking of the Arabica fly crop in Northern Sumatra. And also, the Robusta harvest in Sumatra is progressing well. Parchment is being delivered to the warehouses where it is prepared for export.

Activities at the port are slow, and freight costs continue to increase. Fewer container availability and vessels spontaneously readjust their traveling plans, making bookings rather tricky.

India

The months of March and April have been the hottest since the national weather service started recording them 122 years ago. In the central parts of India, they recorded highs of 47°C. These extreme temperatures are unusual for springtime, and according to local and international scientists, they come as a consequence of global warming. This is a vicious circle as the heat ignites increasing demand for electricity (used for cooling), which brings along power shortages in many states and, consequently, an increase in fossil fuel consumption.

The 21/22 harvest has been collected, and it looks good in terms of quantity and quality so far. India produces about 5.5 and 6 million bags per year, split into 20% Arabica and 80% Robusta. The volume of washed and natural coffees can vary substantially from year to year. Whether coffee is produced as natural or washed often depends on the logistical infrastructure (is there enough drying capacity?) and the prevailing weather conditions (dry vs. wet weather), and, of course, on premiums paid locally for the washed coffees. Dry mills are running at full steam, and exporters are preparing the coffee for being shipped to consuming countries.

Activities at India's leading coffee exporting ports of Mangalore and Cochin remain a challenge. Freight rates continue on the high side, and a general lack of adequate food containers has become the "new normal". Unfortunately it looks like delays are not avoidable.

Vietnam

The harvest in the world's leading Robusta producer is complete, and farmers sell their coffee to local traders and exporters, carefully monitoring international prices. The expected production volume for the 21/22 crop ranges about 30+ million bags. Hot and warm weather affects Vietnam's central coffee-producing regions of Dak Lak, Gia Lai, Lam Dong, and Dak Nong. Some rains are expected and will be more than welcome as the soil craves water to restore its humidity.

Some exporters have experimented with bulk shipments, which proves to be a viable alternative for container bottlenecks. Port authorities in Vietnam proactively reach out to China to submit cargo clearance information on time to avoid further congestion.

Papua New Guinea

Politicians are preparing for the General Elections that will take place from June 11 through June 24, 2022. Voters will elect 111 members of the National Parliament.

The lower altitude areas have already begun with the harvest, and in the higher altitude regions around Mt. Hagen, the pickings are starting too. Weather conditions in the Eastern Highlands have slowed down the maturation process, and hence the harvest has not yet entered its full dynamics.

Activities at the port are slow and delayed as bookings are re-scheduled without any notice.

General market situation:

May 8 commemorates the end of WWII back in 1945. On Sunday, in all major European cities, ceremonies took place to praise peace, remember the cruelties of war, and pay respect to soldiers who died during this dark time. Seventy-seven years after the end of the Nazi regime in Germany through the allied forces, war has come back to Central Europe. Putin continues his invasion of Ukraine. Were the millions of lives lost during WWII not enough of a lesson?

China is continuing with its strict lockdown policies in Shanghai and Beijing. Inbound and export logistics continue to be a bottleneck in global supply chains. Delays and lack of containers and shipping space come as a consequence.

Jerome Powell, Chair of the US Federal Reserve, raised interest rates by 0.5%. This was the most significant increase since 2000 and is coming at a time when the US is facing the highest inflation in more than 40 years. The inflation genie has been left out of the bottle and heavily hits most global economies. The Bank of England has also raised interest rates – for the fourth consecutive time. Discussions in the European Central Bank are ongoing, and the odds are high that the Euro-zone will also increase its interest rates sooner than later. Other strong-currency nations will have to follow too. Will this get the inflation genie back into the bottle? Growing interests in a highly indebted world may bring along a global recession. JP Morgan is assessing this scenario with a 33% probability.

The coffee market reflects this volatility too. The last week saw falling prices in New York (Arabica: -5%) and London (Robusta: -1%). Notably, Friday showed a sharp price retracement marking a new 6-week low.

You can follow the principal market changes in the below table.
We update it weekly.

 

Brazil:

• The Brazilian economy is slowing down with fears of recession and rising unemployment rates. The Russian invasion of Ukraine pushed prices for oil, gas, and other commodities into record highs. Inflation is a consequence.
• Many coffee professionals are touring the vast coffee regions these days. Their principal aim is to get a final impression of the 2022 harvest. Most reports swing in around 62 million bags: 21.5 million bags of Conilon (aka Robusta; correctly named Canephora) and 40.5 million bags of Arabica production (32.5 mil. bags Naturals and 8 mil. bags Washed). In total numbers, Brazil is by far the most significant coffee producer globally – almost doubling the size of the second-largest producer Vietnam and five times the size of Colombia's coffee production. Despite the qualitative differences among the countries, there is a matching description for Brazil: tudo grande!
• There was good rain in April, and now there is abundant sunshine and warm weather, which supports the cherries' maturation for the 2022 harvest.
• The month of May usually triggers the first pickings of the Brazilian harvest. First cherries were picked in the Rondonia and Espirito Santo regions, known for their Conilon production. But the bulk of the crop is still on the tree getting its final maturation. The Arabica harvest is further maturing on the trees, and the first manual pickings were reported in the Zona da Mata region and in southern Minas Gerais. The bulk of the volume is expected towards June and July when the harvest enters its full-swing mode.
• The port of Santos has reported some break-bulk shipments. This rather old technique enables the storage of bags loosely in the ship's hold. Despite all quality risks involved in this kind of transportation, the shipped volume increases substantially and brings alleviation to the congested ports. Nonetheless, global logistics continue to be challenging as ports in China are only partially operating and other destinations in northern Europe and the US west coast are very congested. As a consequence of the disrupted logistic flows, there is a general shortage of food containers. Delays and rising freight rates are unavoidable.

 

Colombia:

• Inflation is also hitting hard on Colombia's economy. April brought about over 9% inflation, the highest rate seen in the last 22 years.
• On another note, the country is preparing for its presidential elections on May 29. Gustavo Petro (leftish orientation and ex-guerrilla fighter of the M-19 rebels), Federico Gutierrez (center-right politician), and Sergio Fajardo (center-left wing) are leading the polls.
• Wet, wet, wet... rain is the only consistent weather pattern in Colombia's main coffee regions in the last months. The harvest of the mitaca crop is progressing slower than expected as drying of parchment is becoming an issue. The effects on the quality remain to be seen. This is the second year in a row that Colombia's coffee production has been affected by the La Niña effect.
• Activities at Buenaventura, Cartagena, and Santa Marta ports are similar to that in most other ports around the globe: there is a general lack of adequate container equipment, and shipping lines cancel bookings without previous advice. Unfortunately, there will be delays and increasing freight rates.

 

Peru:

• President Pedro Castillo, a former union leader and school teacher, reencounters difficult and unstable times. He confronts "friendly fire" from his party as his fellow party members presented a bill to cut his presidential term from five to two years. This move is unprecedented and would imply a new election in 2023.
• The harvest is progressing well in all lower altitude regions. First pickings are also starting in the higher altitude areas, and as we are moving towards June, the harvesting activities all over the country will be in full swing.
• Internal transportation of coffee is quite expensive as international oil prices also affect Peru's economy. Warehouses are starting to fill with the first deliveries of parchment, and dry mills swiftly initiated their operations.
• Export logistics run relatively smoothly as the volume is still comparatively low. It looks like there are enough containers available (for now).

General market situation:

Putin's invasion of Ukraine shows how quickly the security of a sovereign nation can be jeopardized by a brutal attack from a neighboring country. Russia's aggression pushes Finland to apply for a NATO membership, and it looks like Sweden will follow soon. Putin's reaction to the decision of these traditionally neutral countries remains to be seen. He justified Russia's "military intervention" in Ukraine with an increasing threat through NATO's expansion. One thing is sure: we are far away from a peaceful and quick solution to this war in Europe.

Shanghai is entering day 50 of its total lockdown. Other 27 cities in China are also in a full- or partial lockdown situation, and Covid19 occurrences are not getting under control. The Zero-Covid strategy undoubtedly affects the country's economy. The major ports are facing substantial delays as vessels cannot unload cargo. The interwovenness of global supply chains is a fact, and hence spillover effects take place, and international logistics suffer. More logistical disruptions are likely to follow.

The NYC-rollercoaster moves on: a cold-weather front bringing potential frosts to Brazil has fired the short-term memory of investors, speculators, and coffee people alike. Recalls of July 2021, when three frosts in a row impacted Brazil's coffee-growing regions came back, and the market skyrocketed 16 c/lb in a day! What a move – precisely only after a new 6-month-low had just been established at 205,20 c/lb. We undoubtedly face a very nervous and volatile situation, and all eyes are watching the weather forecasts. It's important to point out that meteorological predictions have a short-range and tend to be inaccurate when looking over 48 hours.

You can follow the principal market changes in the below table.
We update it weekly.

 

Central America:

Inflation is also affecting the economies of Central American countries. The cost of food, gas, and oil has risen in the last months, and the war in Ukraine pushed the price of fertilizers to new highs. A primary source of income for these regions is "remesas", remittances sent by family members mainly working in the US and Canada back to their home countries. According to the World Bank, they totaled 131.000 million USD in 2021. This is a 25% increase compared to 2020. Remittances make up almost 15% of Guatemala's GDP. The other Central American countries report similar figures.
But is there a downside to people sending money back home? The main problem originates from the continuous migration of workers from Central American countries toward the northern borders of the US. That workforce will be delivering their services in Northern America and not in their own countries. Particularly in the rural areas, there is an upcoming shortage of workers. And as working conditions and remuneration are much better in the US, it does not look like this trend will revert soon. Finding pickers and workers in the agricultural sector is tricky and will surely not get any easier in the upcoming seasons.

Without holding the ultimately precise harvest numbers at hand, it's always hard to assess the output for this season, but it looks like this crop was smaller than expected. Some reports are showing a 10% (!) decrease. Coffee prices in Central America are on the very high end, and certified coffees (Fairtrade, Organic, Rainforest Alliance) are genuinely scarce.

The last weeks brought good rains in Central America, and coffee farms blossomed. Trees get covered with white flowers, and a seductive, mystical Jasmine perfume surrounds the coffee fields. Always so beautiful to experience this!

Exporters are busy covering their sales to roasters and traders alike and producing coffee for export in the dry mills.

Logistics at all major ports in Costa Rica, Honduras, Guatemala, and Nicaragua is complicated. There is a general lack of adequate food containers, and shipping lines are postponing shipments or canceling them without prior notice. Delays of more than 30 days are unavoidable. And adding to delays, we see consistent and juicy price increases from the freight carriers. Maersk alone has locked in a record profit thanks to a stunning 55% increase in sales during the first quarter of 2022. Other shipping lines have already reported massive gains too.

 

General market situation:

Finland and Sweden have officially applied for a NATO membership. While the USA and other nations have welcomed the application and support the initiative, Turkey is trying to slow down the process.

The global macro-economic picture looks somewhat worrisome. Despite the interest rate adjustments done by the US Federal Reserve, Bank of England, and other financial institutions, inflation continues to rise worldwide. Renowned economists, entrepreneurs, and investors all around the globe are starting to warn about potential stagflation. In such a scenario, high inflation is combined with a stagnant economy and rising unemployment. The substantial drop in stock valuations over the last weeks reflects such a prospect.

The Chinese Government has started to ease the total lockdown in Shanghai. Some citizens were allowed to shop for food in local stores. But in other cities, the lockdown situation continues. It will take some time until internal logistics and supply chains reassume their usual busy rhythm. Till then, supply chains will remain distressed.

The best description for the actual caprioles of the Arabica coffee futures market is volatility and nervousness, and they express themselves through a 20 c/lb trading range during the last week. A cold weather front pushed prices higher on Monday and Tuesday. As no frost damage materialized, the market came back lower. All eyes are nervously watching and carefully monitoring the temperature development in Brazil's coffee regions.
CONAB – the national food supply and statistics agency - has reduced the initial crop forecast by 2.3 million bags: the new estimation for crop 22/23 is 53.4 million bags. This will surely increase market concerns during the following weeks ahead.

You can follow the principal market changes in the below table.
We update it weekly.

Ethiopia

The aftermaths of the war between the Government and the TPLF rebels pushed the country towards an economic slowdown, making imports very expensive. As a consequence, Ethiopia's inflation rate reached 34.7% in April. This is the highest rate since November 2011. Particularly prices for food items and petrol have increased over proportionally. Every-day life has become extremely expensive for the majority of Ethiopians.
The past weeks brought along abundant rains in the coffee regions. Good news for the new crop 22/23! On the other hand, roads are very muddy and tedious to travel: Moving coffee from the interior to Addis Ababa becomes slow and difficult.
High coffee prices and logistical bottlenecks at the port of Djibouti have substantially slowed down trading activities. The backlog can be seen in the exporter's warehouses and dry mills in Addis Ababa, where coffee is piling up and waiting to get sold and/or processed accordingly.
The economic slowdown has reduced imports. Consequently, there is a lack of adequate food containers coming into the country. Shipping lines have reduced their schedules calling Djibouti. Delays are to be expected.

 

Kenya

Amid the Presidential Elections scheduled for August 9, presidential candidate Raila Odinga has held a courtesy visit to Ugandan President Museveni. Mr. Odinga counts on the support of Kenya's actual President Uhuru Kenyatta, and it looks very likely he will win the August elections.
Long queues build at the gas stations as prices for petrol are rapidly increasing. Inflation is also starting to affect Kenya – particularly for oil and gas.
Heavy rains in the coffee regions have restored soil humidity after a long dry and hot weather period.
The fly crop advances according to expectations. Auctions are scheduled for starting on June 21.
Delays at the port of Mombasa due to similar reasons: lack of adequate containers and shipping lines canceling the bookings.

 

Tanzania

Similarly to other Easter African countries, Tanzania also faces a rapidly increasing inflation rate. Mainly the cost of fuel is sky-rocketing.
The southern highlands around Mbeya, Mbozi, and Mbinga have seen heavy rains for the last weeks. In the lower altitude lands around Mbinga, the harvest has already started. The other regions in the south are expected to enter into harvesting modus in June.

 

Rwanda

Good weather conditions encourage an even ripening process.
The harvest is progressing well, and dry mills in Kigali are receiving the first parchment deliveries.

 

General market situation:

There hasn't been any real substantial change to the cardinal global problems of climate change, pandemics, war, inflation, and disrupted supply chains. Apart from the World Economic Forum in Davos forecasting some further uncertain times ahead there has been little-to-none change in the macroeconomic environment since last week.

Coffee fundamentals also remain almost unchanged. All eyes are carefully observing possible temperature drops in Brazil's coffee regions. It looks as if Central America is sold out. 

There are minimal offers of coffee available, and prices are pretty impressive: we see historic high differentials in Central America. 

Excessive rains in Colombia have destroyed the road to the port of Buenaventura. The only constant ahead continues to be the volatility of the markets, pushing the Arabica market up over 6% on a weekly comparison. 

 You can follow the principal market changes in the below table.

We update it weekly.

Indonesia

The Indonesian Government has eased the export ban on cooking oil after a month. The internal supply situation has improved, making cooking oil more affordable again.
The fly-crop Arabica harvest is now completed in northern Sumatra. In the southern part of the island, the focus is on harvesting Robusta beans. Weather conditions have been quite good these days, enabling farmers to collect the last rounds of cherries quickly. Indonesia's estimated production of 11.5 million bags can be split into 15% Arabica and 85% Robusta.
Indonesia has a growing internal consumption of coffee, and its mainly consumed as a 3in1 ready-to-drink sachet (instant coffee, instant milk, and sugar). But also, some specialty coffee shops appear in Indonesia's most prominent cities.

 

India

Inflation and the war in Ukraine are the main topics of discussion in India amidst historic high temperatures in Central India.
It looks like farmers have completed selling their coffee, and there are only a few offers of new crop in the market. The Robusta harvest was pretty in line with expectations (about 4.5 million bags), while the Arabica is smaller than forecast (1.1 million bags).
It's pretty hard to find adequate food containers, and the ports are pretty congested. Coffee has only been moved slowly, and delays and increasing freight rates are unavoidable.

 

Vietnam

The Ministry of Agriculture and Rural Development (MARD) has set an ambitious target for the upcoing three years to refresh the coffee trees on 107,000 hectares in Vietnam's most prominent coffee-growing regions in the highlands around the city of Buon Ma Thuot. A mix of replanting, grafting, and renovating shall bring the expected result. The local banks are ready to support farmers with credit lines to back this endeavor. With newly engineered planting materials, farmers and MARD alike expect a 1.5x to 2x production boost. Using the multiples and applying them to the actual crop size (30+ million bags) would mean that Vietnam could produce between 45 and 60 million bags of coffee once the tree refreshment program gets executed.
As Vietnam is a significant importer of fertilizers from Russia, Ukraine, and Belarus, they are seeing massive price increases.
Weather conditions are starting to get wet as the monsoon season approaches.
Activities at the port continue to be slow and tedious. Freight rates continue on the very high end, and bookings are canceled without notice. Delays are part of the daily reality.

 

PNG

A tragic car accident took the life of Sam Basil, PNG's Deputy Prime Minister.
The weather was very good bringing along abundant sunshine. The harvest is progressing well - crop expectations for this season range around 800 to 900,000 bags.
Some parts in the Eastern Highlands have problems with the Coffee Berry Borer (CBB) beattle. This insect drills into the cherry and eats into the coffee bean.
Parchment is starting to arrive at the dry mills, and operations are beginning to produce coffee for export.

 

General market situation:

The Russian invasion of Ukraine has passed its 100 days now. While Putin is claiming 20% of Ukraine, there are no signs of interest for a negotiated end to the war in sight.
This horrible act of violence will be getting on for a long time.

Last week, JPMorgan's CEO Jamie Dimon commented that what he initially saw as "storm clouds" on the economic horizon is now morphing into a "hurricane" due to twin threats of the war in Ukraine and the US Federal Reserve pulling its stimulus. The exact dimension of the storm is still unclear. Adding to this, Elon Musk, CEO of Tesla and other ventures, has announced to have a "super bad feeling" about the economy. Looks like macro-economic indicators are turning more and more bearish.

What is apparently looking like a relatively calm week, with a 1.3% week-on-week price increase, has brought along a trading amplitude of almost 20 c/lb.

You can follow the principal market changes in the below table. We update it weekly.

 

Brazil

Ex-President Lula da Silva leads the opinion polls for Brazil's next presidential candidacy – far ahead of Jair Bolsonaro. General elections will take place on October 2, 2022.
These days all eyes are on weather forecasts from Brazil. The July frosts of last year are all too fresh in everybody's minds. While frost fears are still on the plate, a new side dish is being served: rainfall in April and May was lower than the previous year's average, pushing rumors of drought. But the good news is that the humidity in the soils remains very good, substantially limiting the risk of dryness.
Different agencies and statisticians are re-adjusting their crop forecasts repeatedly, but numbers are not really changing dramatically. The latest crop forecast from the Rabobank states 64.5 million bags (41.4 million bags Arabica and 23.1 million bags Robusta).
The harvest has started in the Conilon regions of Brazil and is also moving ahead in the most prominent Arabica production regions: Minas Gerais, Sul de Minas, Cerrado, Sao Paulo, Rio de Janeiro, and Parana.
Some farmers actually reconsider renewing their sustainability certifications as the increasing compliance requirements of the new certification standards make their work exceedingly bureaucratic. Additionally, the exceptionally high farm-gate prices do not motivate farmers to go the extra mile to comply with those standards.
Activities at the port have gotten much better compared to the beginning of this year, but they are still far from pre-Covid times.

 

Colombia

The presidential election took place on May 29, but no candidate could secure the required 50%+ majority. The two candidates with the highest votes are Gustavo Petro, left-wing candidate and former mayor of Bogota D.C., and Rodolfo Hernández Suárez, center-right candidate, businessman and former mayor of Bucaramanga. The final runoff between the two candidates will take place on June 19.
The National Coffee Federation FNC has released a report reducing its forecast for the 21/22 harvest by 13,8%. Instead of the planned 14.5 million bags, they are now considering a total production of 12 to 12.5 million bags. This is in line with the upcoming concerns due to the excessive rains over the last months. The weather conditions will stay rainy and humid with little sunshine well into the second half of the year.
The excessive rains are slowing down the mitaca harvest. Parchment drying has become an issue as there is insufficient sunshine, and mechanical drying is becoming truly expensive. This latter process requires "cisco" (parchment husks), but as there is not enough coffee going through the dry mills, there is a general shortage of cisco.
Landslides have affected different roads within Colombia and further slowed down the internal coffee logistics. Even the road to the port of Buenaventura has been demolished by a mudslide. No trucks can pass the road; they can neither unload nor pick up cargo.
More delays are expected with all of the above and considering the usual chaos at the ports due to the lack of adequate food containers and shipping lines canceling bookings.

 

Peru

According to the US Department of Agriculture (USDA), the coffee production in Peru for the 2022 harvest will be around 4.03 million bags.
Scattered rains and abundant sunshine along all significant coffee-producing regions.
The lower altitude production regions are moving towards the harvest's end, and parchment deliveries to the dry mills have picked up momentum accordingly. Those smallholder farms located in the higher parts of the country have also started with the harvest. So far, volumes and qualities are looking very good.
As we are still at the beginning of the exporting season, there are enough containers available, and shipping lines can keep bookings so far. Freight prices continue to be very high.

 

General market situation:

China's 'Zero-Covid' policy is not achieving its goal. Only two weeks after the strict Covid lockdown regulations were loosened in Shanghai, 15 of the 16 city districts are mass testing again as some sparks of the virus have reappeared. Tests on more than 23 million people started during the weekend. Six city districts will be locked down for the duration of the tests. The other parts of the city will be under strict surveillance, and in case of rising Covid numbers, a further lockdown will be implemented.

Global supply chains will remain under extreme pressure as the port situation in Shanghai is not really making significant progress. Several ports in northern Europe and the US-West coast are slow and unable to cope with the logistical burdens.

Christine Lagarde, head of the European Central Bank, has (finally) recognized the rising inflation in the Euro-Zone and is ready to increase interest rates by 0.25% as of July. Another is scheduled for September. On the other side of the Atlantic, Jerome Powell, Chair of the US Federal Reserve, will announce the next interest rate increase on Wednesday. It is still unclear if it will be 0.50 or 0.75%. As Europe's and the USA's inflation is increasing rapidly, action is urgently required.

With the actual global developments, finding encouraging signals in the economic outlook is challenging. Investors continue to exit their investments and are preparing for a storm ahead. Falling stock valuations are only one symptom of this bearish market environment.

This is also being reflected in the pricing of global commodities. 

Both Arabica (KCN22) and Robusta (RMN22) prices have come slightly lower, although the situation in most coffee-producing countries remains difficult. Differentials remain very firm, and some origins are unable (or unwilling) to offer. Despite all efforts, the global logistical situation remains a true challenge. Warehouses in Central America and other coffee-producing countries are filled with coffee waiting to be exported. It's hard to find adequate containers for packaging the coffee and vessels with enough available space for bookings. It feels like a catch-22 ... nothing for the faint-hearted!

You can follow the principal market changes in the below table. We update it weekly.

 

Costa Rica

It looks like this small country is always ahead of the curve. While other coffee producers in Central America are still striving to find enough coffee to serve existing commitments, in Costa Rica, producers are already focusing on the upcoming harvest. Excellent weather conditions undermine an encouraging development of the new crop 22/23. Nonetheless, with the hurricane season still ahead, Ticos hope Mother Nature will be gentle on them.
Production estimates for the actual harvest range between 1.4 and 1.45 million bags.
The logistical bottlenecks at the port continue to be incumbent and tedious. The major constraint is finding adequate food containers.

 

Guatemala

Guatemala's beautiful former capital city of Antigua is surrounded by three volcanoes: Acatenango, Agua, and Fuego. The latter registered some explosions, and the ashes reached up to 40km of distance.
The weather has brought along abundant rains. Farmers are working on their fields and applying fertilizers when weather conditions allow. This is an expensive exercise as the Russian invasion of Ukraine has been heavily pushing fertilizer prices.
This season is expected to produce between 3.3 and 3.6 million bags.
Guatemalan ports are no exception to the logistical mess. Delays are to be expected. 

 

Honduras

The biggest Central American coffee producer corrects its expected production. Based on smaller than expected export numbers, new estimations are signaling an almost 15% reduction. But it is essential to remember that exports are also slower than in previous years due to logistical bottlenecks at the ports. Hence, as our last crop forecast of 5 million bags already included a smaller crop expectation, we leave it unchanged.
The internal coffee market looks pretty dried up as little coffee is traded. Prices are very high – particularly for certified qualities (Fairtrade, Organic, and RFA).
Port activities are slow. A general shortage of food containers and shipping lines are canceling bookings without any previous notice.

 

Nicaragua

The latest production estimates in Nicaragua indicate a relatively good season, with almost 2.6 million bags of coffee produced during the 21/22 season.
Exporters are working hard to prepare the coffees for export, and logistics are not making it easier for them. Same situation as in all Central American ports. Delays and rising freight prices are unfortunately unavoidable.

 

 

 

 

Area: Marketing & Communications
Location: Hamburg, Germany
Start: asap

About List + Beisler:

L+B is a green coffee importing company headquartered in Hamburg, Germany, and founded in 1901. We import coffee from all over the world to all over the world. L+B has been a market leader in the specialty green coffee trading segment for over 120 years. We have worked with coffee roasters and coffee growers around the world - connecting them, achieving ongoing relationships, and working towards mutually beneficial goals since the very beginning. We are looking for a passionate new colleague to tell the stories of our coffees. 

Job Description:

• Strategic development of communication and marketing channels.
• Plan, create and manage marketing campaigns on all channels: newsletter, social media, our website, and print media (PR and ads).
• Create and develop compelling content (written / graphical / video) for newsletters, product information sheets, jute bag designs, training, blogs, etc.
• Constantly develop and maintain our websites and social media channels to drive traffic to company channels.
• Manage partnerships with third-party graphic designers, web designers, and videographers to create unique and engaging content.
• Develop and implement new concepts for events and trade fairs.
• Monitor and analyze our marketing activities.

Skills and Qualifications

• You have at least 5 years of relevant professional experience in a comparable position in a company or a marketing agency.
• You have a business degree from a competent university with a strong focus on marketing/digital marketing.
• You have strong communication skills in English and German with a refined sense of language, and you enjoy copywriting.
• You take the lead with a hands-on mentality, taking ownership of your projects.
• You pay attention to details and like to be creative.
• Working in a team is key to you – you are ready to explain, discuss and convince non-experts in your field to reach goals.
• You know your tools: CMS programs (e.g. TYPO3), Microsoft Office, Adobe Suite (InDesign, Photoshop, Premiere), SEO, SEA, Google Analytics, LinkedIn, Instagram, etc.

What We Offer

• A small and highly motivated team where you can truly leave your footprint.
• A very international working environment with offices in Germany, the USA, and Australia.
• Coffee knowledge of more than 120 years; you will undoubtedly develop your coffee knowledge and your coffee skills.
• An office with a broad view over Hamburg's historic "Speicherstadt" and flexible working times.
• Finest specialty coffee for your mug all day long.

 

Please send your application to jobs@list-beisler.de. We look forward to meeting you!

General market situation:

We are already counting four months at war in the middle of Europe, yet sadly, there is no peace in sight. Russia's invasion is not only destroying the lives of millions of Ukrainians but also pushing other countries into famine. Ukraine grain stocks can't be exported, and farmers can't work the land under the actual circumstances.

The US Federal Reserve increased interest rates by 0.75% (the most significant since 1994), and the European Central Bank announced the first (overdue) increase of 0.25% for July, and additional steps are scheduled for September. It's no surprise to see further interest rate hikes as inflation is still untamed and is reaching 40-year-highs.
The Feds' and Central Banks' intention is to cause an economic slowdown, even at the risk of sliding into a global recession. Unfortunately, there are not many alternatives visible for now.

International logistics continue to be a burden for all global trade. Freight costs continue to rise, and it looks like containers are piling up on the wrong side: there is a continuous shortage in the exporting countries, and logistical operators cannot return empty containers in a timely and cost-efficient manner.
Although framed in a bearish macro-economic environment, there are still abundant bullish factors that could push prices for coffee higher. For now, Arabica coffee prices closed almost unchanged on a week-on-week comparison. Today the market in New York remains closed due to a public holiday (Juneteenth).

You can follow the principal market changes in the below table. We update it weekly.

 

Ethiopia

Just at the time when Ethiopia's Prime Minister Abiy Ahmed announced peace talks after an intensive war in the Tigray region with the TPLF rebels, other separatist rebels further in Ethiopia's west, called Oromo Liberation Army (OLA) and Gambela Liberation Front, are claiming sovereignty.
The rainy season has started in Addis and in the coffee-producing regions. Reasonable amounts of rain have been registered. This is happening timely as the coffee cherries need water to continue their maturation on the trees.
As a side effect, roads become very muddy and slippery. Coffee transportation from the interior to Addis Ababa becomes a true driving challenge.
Warehouses in Addis are packed with coffee, and there is a good explanation for this: a general shortage of adequate food containers. As a result, coffee is ready to be moved to the port but can't be containerized. This originates a backlog at exporter's warehouses. Then, once exporters get hold of containers, finding space on a vessel is the next challenge that needs to be tackled. This frustrating reality brings along delays.

 

Kenya

Presidential candidates are running hot for the upcoming election. Though the actual campaign is getting truly dirty with misinformation and fake news on the politicians' menus. The two leading candidates, Raila Odinga and William Ruto, are competing fiercely. The final decision shall take place on August 9.
Coffee production in Kenya has been substantially decreasing over time. Back in the nineties, the country produced more than 1.5 million bags. Today – mainly due to land usage changing from agriculture to construction - Kenya only produces about 800.000 bags of coffee. Low productivity and changing climatic conditions add to this sad story. The Government has tried several times to stimulate the sector and motivate coffee farming in other regions of Kenya, but until now, without any substantial success.
The pickings of the fly crop have begun, and the first auction was postponed by a week to June 28 as the coffee volume is still low. Cool and wet weather conditions are slowing down the parchment drying process.

 

Tanzania

The Arabica harvest started in the southern highlands of Tanzania. The coffee highlands around Mbeya, Mbinga, and Mbozi have started picking cherries and processing them. The small washing stations – CPUs or Central Pulping Units – have started their operations.
On another note, the Robusta (Canephora) harvest around Bukoba (near Lake Victoria) is progressing well too.

 

Rwanda

Cherry volume is coming down as we move toward the harvest's end. But sustained rains across the coffee production regions are slowing down the drying process for parchment. Nonetheless, there is a continuous flow of coffee from the interior to Kigali's dry mills.
Exporters are preparing coffees for export, and increasing fuel prices are further pushing transportation costs from Kigali to Dar Es Salaam.

 

 

 

General market situation:

The G7 group (Canada, France, Germany, Italy, Japan, the UK, and the USA) is meeting in the Bavarian Alps in southern Germany. This forum of the seven strongest economic nations is an excellent opportunity for their presidents to discuss and synchronize their political agendas. As threats to humanity are coming from Russia's aggression and war in Ukraine, inflation and global economic turmoil, climate change, world famine, and disrupted supply chains, an urgent need for new international policies and development measures are urgently needed to enable future mutual security.

While a truly international community of more than 11,000 coffee enthusiasts was gathering at a fantastic "World of Coffee" event in Milan, the markets in New York (Arabica) and London (Robusta) continued their trading activities. On a week-to-week comparison, the Arabica prices ended only a tad lower (-1,8%) but remain volatile, with a trading range of almost 15 c/lb, and meandering in a 220 c/lb to 240 c/lb corridor. All eyes remain fixed on:
The development of the Brazilian harvest.
On potential climatic threats coming from frost or drought.
The situation of certified stocks in Europe and the US.
This will likely remain until August when the frost season is expected to end.

You can follow the principal market changes in the below table. We update it weekly.

 

Indonesia

The harvest in the islands of Sulawesi, Bali, and Java is progressing well, while abundant rains are coming at the right time for the cherry maturation process in Sumatra.
Activities at the port continue to be slow, and the main difficulty is finding adequate container material.

 

India

A heat wave has affected India's central and northern regions, setting a new highest-ever temperature record in India's Capital City of Delhi: 49°C. This is the hottest temperature registration in 81 years. The hot temperatures are coming along with a severe risk of drought, directly affecting crops and, as a consequence, food security.
But now, the hot period has been interrupted with massive monsoon rains flooding the lands and destroying houses and infrastructure. Weather forecasts from the Indian Meteorological Department predicted more heavy rains for the following weeks.
The actual monsoon winds are hot and humid and traditionally used to prepare the "Monsooned Malabar" coffee.
Dry mills are busy preparing coffee for export.
Same situation as in most ports of the world: there is a chronic container shortage, and vessels are overbooked. Delays and rolling of bookings are part of the daily agenda of the hard-working logistics teams.

 

Papua New Guinea

The candidates campaigning for President and aspiring to become a Member of Parliament are in their hottest phase: it's election time. From July 2 till July 22 a set of elections will take place, ultimately determining the new President and the Members of Parliament.
Most local coffee traders and exporters are trying to buy as much coffee as they can before the beginning of the elections. There is always a risk of social unrest over this period; therefore, they want to make sure to have the coffee in their warehouses and not somewhere on the streets.
Proper amounts of parchment is reaching the dry mills, and production of export qualities is well underway.
Logistics at the port are similar to the previously mentioned. Unfortunately, there will be delays also here.

 

 

 

General market situation:

The bearish macroeconomic environment could not stop a strong up-move in Arabica and Robusta markets. And at the risk of sounding like a broken record... volatility came back last week, moving Arabica prices up 10 c/lb in a day. Then prices retraced to the "old" levels, closing the week at 224,65 c/lb.
Today New York and all other US markets remain closed due to Independence Day.

You can follow the principal market changes in the below table. We update it weekly.

 

Brazil

Brazil's production of fertilizers is relatively tiny, making them dependent on imports from other countries. The Minister of Agriculture has just successfully negotiated new fertilizer supplies from Russia. This alleviates producers of all crops - from soybeans, sugar, wheat, and corn to coffee – since they all need these products to keep up the high productivity. A call between Russia's Putin and Brazil's Bolsonaro has fostered this collaboration.
Weather conditions continue to be cool and dry. Temperatures are not near the freezing point, and there are no frost fronts on the meteorologist's radars.
The dry weather helps for drying the coffee.
The harvest is a little delayed. So far, 35% of the Arabica harvest has been collected. Finding workers and pickers for the farms has become a real issue.
The United States Department of Agriculture USDA has corrected its production numbers from 56.3 to 58.1 million bags for the 2021 crop and is adjusting its statistics for this ongoing harvest to 64.3 million bags.
Internal prices are very high, and farmers can lock in some good profits – even considering that some of them will have a smaller crop due to the last season's frost and consequential damage to the coffee trees. Nonetheless, the increasing cost of labor, fuel, and fertilizers will negatively impact the farmer's business case.
A general lack of space is slowing down exports substantially – particularly if compared to previous seasons.

 

Colombia

Colombia has elected a new president: The former guerrilla fighter Gustavo Petro has been elected as the incoming President of Colombia. He has already met with outgoing President Ivan Duque to secure a smooth transition of power.
The last months have been extremely wet in all major coffee-producing regions. A thick layer of clouds is not letting the sunshine dry the parchment.
Weather forecasts are signaling more rains for the upcoming months. Too much rain might negatively affect the development of the main crop and the flowering of the next mitaca (fly-crop).
The high coffee prices have motivated farmers to plant more coffee. The new plantings will be carrying fruits only two to three years from now, and further investments are needed to increase the productivity of the trees. The cost of labor, fuel, and chemical inputs is also constantly rising across Colombia.
According to the Colombian Coffee Federation (FNC), production figures for the first eight months – ranging from October 21 to May 22 – reach 8 million bags. This is below expectations, and production needs to increase to 5 million bags in the last four months of the coffee calendar year to reach the target set by the FNC (13 million bags).
Dry mills are waiting for parchment to arrive, but the rainy and wet weather conditions make drying parchment a challenging undertaking.
Business is slow as those parties holding coffee look for higher prices. This turns internal prices even higher, and exporters cannot attract buying interest from the international market.
All major ports in Colombia, Buenaventura, Cartagena, and Santa Marta, are facing substantial challenges in finding vessel space. Despite all efforts by the logistic teams, delays of over 12 weeks are part of today's reality. 

 

Peru

Peru continues to have a rather challenging political situation as the President is incapable of executing his strategy and cannot bring the promised changes. He is continuously attacked by his own and the rivaling parties. Inflation and an unstable currency are the consequences of weak leadership.
The general weather conditions continue to be good, and coffee is ripening, allowing the harvest to proceed. It seems only in northern Peru that constant rains have become cumbersome as they are making the drying of parchment difficult.
The harvest is coming in a little delayed. In the lower and mid altitudes, cherry-picking is processing well, while in the higher altitude regions, the harvest is just starting.
Some trucks filled with parchment travel towards the Colombian border, looking for buyers and quick access to cash.
Dry mills are receiving the first parchment deliveries and are starting their production of export qualities.
The first containers are being booked for European destinations without significant complications. Freight rates are expensive, and once the harvest enters full swing, the port will most probably also face delays.

 

General market situation:

The week ends with a lot of turmoil as Japan's former Prime Minister Shinzo Abe was shot twice during public speaking in the city of Nara. Drastically, paramedics could not help him, and he finally died in the hospital.
This comes at a time when mass shootings frequently appear in the US. The latest happened on July 4th, the US Independence Day, when a gunman opened fire from a rooftop in a Chicago suburb, killing six people and wounding 24 innocents during a parade celebrating Independence Day.
The brutal war of Russia invading Ukraine goes on, and there are no signs of appeasement near sight. When will this nonsense aggression from Putin and his fellowship stop? How many more lives will this completely unnecessary war claim?
And finally, after half of his Government resigned, British Prime Minister Boris Johnson took his head and stepped down. Apparently, he will remain in office until a new Conservative Party leader is elected.

Adding to this very turbulent international situation, we see climate change already affecting global economies and their supply chains. Northern Italy is facing the driest time in over 75 years and more than 120 days without any rains. The Po river - northern Italy's primary water source for the agricultural sector - is as dry as a desert. Government officials are seriously discussing the possibility of using water from Garda lake to irrigate the fields.
On the other side of the planet, we see a typhoon hitting the southern Chinese shores and Hong Kong, with winds of more than 140 km/h and heavy rains and floods. Northeastern Asia expects heatwaves in the following weeks, and more typhoons will likely hit the Asian shores in the next two months.
Additionally, we hear that Covid-19-related lockdowns in Shanghai and other Chinese cities are in effect again as the strict 0-Covid policy from the Government is still in place.
All this will add more disruption to the already stressed supply chains.
The bearish scenario continues despite some recovery in the world's stock markets. War, climate change, inflation (and potentially economic stagnation), Covid, food insecurity, and distressed global supply chains are the unsolved problems of today's world.
The coffee world shows - fundamentally speaking - more bullish than bearish arguments with firm differentials, diminishing certified stocks, a supply-demand deficit, a delayed harvest in Brazil and Peru, and staggering logistics slowing down the supply of fresh coffees from origin to consuming countries. But the international coffee prices have come lower this week.
The Euro continues to move towards parity with the US-Dollar. This makes imports into Europe more expensive.

You can follow the principal market changes in the below table. We update it weekly.

 

Central America

Nicaragua's controversial President Daniel Ortega continues chasing all potential opponents. His latest crack-down is on a nun order founded by Mother Theresa and forcing five Majors from the opposition to step down.
The nuns were moved to Costa Rica, and some party friends of the President replaced the Majors. These are all parts of a bigger puzzle in which President Ortega is rapidly changing the country from democracy to autocracy.

The weather conditions have been very benevolent for the new harvest starting towards the end of this year in Central America. Good rains have restored the soil humidity to excellent levels.
At the same time, we are approaching the hurricane season. Tropical storm Bonnie hit the coastline of Nicaragua and Costa Rica last week. Fortunately, no significant damage occurred. But we will surely see more storms and hurricane warnings during the following months as the season typically phases out towards November.

 

An important topic of concern remains the situation regarding coffee farm workers, as a substantial number of people are leaving Central American countries and trying to immigrate to the US.

 

Demand for coffees from Costa Rica, Guatemala, Honduras, and Nicaragua continues to be on the high side - same as prices.

 

All exporters are busy fulfilling their commitments, and while some ports are still struggling with congestion, others are performing relatively well.

 

 

General market situation:

The global political and economic scenario is far from looking positive. For the time being, wherever we look, we find some sort of a crisis. This might range from war (Russia's invasion of Ukraine), famine (Northern African countries in need of grain imports), stagflation (high inflation and low economic growth prospects), Corona (continuing 0-Covid policy in China, resulting in lockdowns and economic slowdown), climate (severe drought in some African countries and in northern Italy. Bushfires in Spain, France, Italy, and Greece), and distressed global supply chains among the most discussed topics. The French philosopher and complexity theorist Edgar Morin coined this situation "polycrisis ." In such a situation, each individual crisis cannot be isolated – it is interconnected with all the others, and they all influence each other.
The US Federal Reserve is expected to raise interest rates by 75 to 100 basis points. The Bank of England and the European Central Bank will surely follow this trend, further fostering an economic slowdown.
The coffee world remains a microcosmos in itself: with abundant bullish fundamental signs, we saw falling Arabica prices of almost 10%, reaching a new low at 194,60 c/lb. The trading amplitude was broad: nearly 30 c/lb between the highs and the lows. The only constant remains the volatility. Prices today are already up 8% from Friday's close (199,80 c/lb).
The supercharged US-Dollar combined with a weakening Euro makes imports into the EU more expensive.
Adding to this, a warning strike of the seaport terminal workers in Hamburg and Bremerhaven has ignited further disruptions and delays. The strike is over now, and logistic operators are trying to clean up the mess.

You can follow the principal market changes in the below table. We update it weekly.

 

Ethiopia

The general security situation in Ethiopia continues to be complicated. As the Government and international aid agencies are trying to rebuild infrastructure in the Tigray (northern) region, rebels in the Guji (south) and Wollega (east) regions are now becoming more active.
Fears of rising inflation and a continuing devaluation of the local currency (Birr) continue their steady trend. Food and gas prices continue to rise, steadily increasing the cost of living.
According to official export statistics, Ethiopia exported 5 million bags from July 21 to June 22. This is a similar quantity as shipped in the previous season.
All major coffee-producing regions have registered a good amount of rains during the last weeks. Coffee trees look very healthy, and the beans are maturing particularly well in the southwestern areas. The harvest is expected to start in about three months.
Some exporters' warehouses are packed with (unsold?) coffee, and local prices remain firm.
The Ethiopian Coffee & Tea Authority has just launched a new Coffee Development Strategy. This long-term plan covers the next 15 years of development in the Ethiopian coffee industry, focusing on diverse topics such as productivity increase, research on new varieties, extension services for smallholder farmers, and marketing.
Logistics in Ethiopia and Djibouti have become a catch-22: finding adequate food containers for coffee transport is a true challenge, and once they are secured, the booking is canceled... nothing for a weak nervous system.

 

Kenya

The General Elections are scheduled to take place on August 9. Elections will determine a new President and the Members of the National Assembly and the Senate, and County Governors. According to actual polls, Raila Odinga and William Ruto are the candidates with the majority of votes. Outgoing President Uhuru Kenyatta is heavily supporting his former opposition leader Odinga and odds look good for him to become the new President of Kenya.
The fly crop harvest is well underway, and first auctions are taking place. The quality looks good, but continuous rains and cold weather make drying parchment difficult and tedious. On the other hand, the showers help the main crop to develop favorably. It is supposed to start towards the end of this year.

 

Tanzania

The harvest is starting in the southern Tanzanian highlands around Mbozi and Mbeya a little later than usual.
The small washing stations known as Central Pulping Units (CPUs) are starting their operations, and the drying beds are being prepared as the season unfolds.
First pickings are also underway in the lower altitude regions around Mt. Kilimanjaro in the country's north. But in the higher altitude regions, the coffee is still ripening, and more patience is needed.

 

Rwanda

Longtime President Paul Kagame is throwing his hat into the ring for a fourth term and will be running for President in the upcoming 2024 elections. He has been ruling the country for 22 consecutive years now.
The harvest is almost finished. Some last bits and pieces are being delivered to the washing stations – at least to those still operating.
Dry mills in Kigali are running full steam, preparing coffee for export.
The border to Tanzania is open, and coffee starts to be shipped through Dar Es Salaam. As quantities are still low, there are enough containers available, but shipping lines remain very unpredictable with the bookings.

 

General market situation:

As we are entering the sixth month of Russia's invasion of Ukraine, we see a glimpse of hope. Turkey and the UN were able to reach an agreement with Russia and Ukraine to enable millions of tons of grains stuck in the port of Odesa to be moved through a safety corridor to destinations in utter need of food. During the night after the treaty was signed, Russia bombed a military ship and a warehouse in Odessa. Let's hope the diplomatic efforts were not in vain and the grains can be exported to countries desperate for food supplies.

To tame inflation, the European Central Bank has increased the interest rates by 50 basis points. And it looks like the Federal Reserve will also raise interest for the USDollar by 75 basis points this upcoming week.

Shanghai's port activities are returning to normal as the lockdowns are over and people can return to their usual activities. Other ports in Europe and the US are confronting bottlenecks as truck drivers, and port workers are striking.

The coffee world continues spinning its own wheel. Certified coffee inventories have reached their lowest level in 22 years, usually a bullish signal. The New York Arabica coffee market had an active week with a 24 c/lb trading range but closed the week with a bearish sentiment and a 4% price decline.

You can follow the principal market changes in the below table. We update it weekly.

 

Indonesia

Indonesias President Joko "Jokowi" Widodo will meet the Chinese President Xi Jinping in Beijing. This will be the first foreign leader visiting China since the Winter Olympics back in February. Their agenda will mainly focus on trade and investment as China is Indonesia's largest trading partner.
Weather conditions have been somewhat complicated over the last months. There have been excessive rains before and after the flowering; hence, some flowers were washed off the trees, unable to fix and become coffee cherries later. This is the main reason for an expected smaller Arabica crop in Sumatra.
The delayed Robusta harvest is now ending, and the rains turn the drying of the cherries into a challenge.
The Arabica harvest on Sulawesi, Bali, and Java islands is completed, and exporters are busy preparing the coffee for shipments.

 

India

Farmers have sold almost all of their actual crop, and exporters' dry mills are running full steam.
There is little improvement on the logistic side; it's hard to find adequate containers, and shipping lines cancel bookings randomly. 

 

Vietnam

The central highlands in Vietnam have seen good rains over the last weeks. In the provinces of Dak Lak, Gia Lai, Dak Nong, Lam Dong, and Kontum, coffee farmers are actively working on their fields and preparing the trees for the next harvest, which is expected to start in three months. The rains are coming at the right time and positively impact the cherry maturation.
Exporters struggle to find more coffee to buy as farmers sit comfortably on their last coffees to sell.
Dry mills are running at total capacity, and exports are moving - despite the usual frustrating slowness.

 

PNG

The general elections for establishing the new National Parliament are ongoing. The official results are expected to be announced by July 29. Unfortunately, some riots related to the election have caused the death of innocent civilians and disruption on the streets where houses and cars were put on fire.
PNG is in the middle of the harvest. Weather conditions are good, with sunny mornings and rains during the late afternoon hours, allowing farmers to collect cherries, depulp, wash, ferment and dry them appropriately. A good volume of parchment is coming from the highlands towards the dry mills.

 

Production Statistics in Asia Pacific

 

 

 

 

General market situation:

The first vessel carrying grains left the Ukrainian port of Odesa today. The safe passage agreement shall enable the cargo to reach Lebanon safely. This is the first departure since the Russian invasion six months ago. This apparently peaceful agreement comes at a time when a Russian missile killed a Ukrainian grain tycoon and his wife. More than 25 million tons of grain are locked in Ukrainian warehouses, unable to reach famine-suffering countries. When will this anti-humanitarian Russian aggression on Ukraine finally end?

In its latest attempt to tame inflation in the US, Jerome Powell, Chairman
of the Federal Reserve, has increased interest rates by an astonishing 75 basis points. This puts the US technically in recession mode, and - depending on the economic data - another juicy rate increase could be on its way towards autumn. The European and British Central Banks will likely follow the path and increase the interest rates.

International Arabica coffee prices recovered 5% compared to last week's trading levels. The September 22 contract closed at 217,60 c/lb, recovering more than 11 c/lb from the previous week's close. The last weeks have shown steady volatility and a broad trading range (this week 17,20 c/lb). As a bearish factor, we see Brazil moving out of the risky frost period and the global economy sliding into recession mode. At the same time, bullish signals are coming from falling certified stocks and steady demand for coffee in consuming countries. Global logistics continue to make coffee flow slow and tedious.

 

You can follow the principal market changes in the below table. We update it weekly.

 

Brazil

Presidential elections are scheduled for October 2, and Brazil's actual President Jair Bolsonaro and ex-President Lula da Silva are leading the polls. It would be no surprise to see Bolsonaro increase Government spending in the following weeks to "motivate" some voters. This would continue pushing inflation and make living costs even more expensive.
The Conilon (Robusta) harvest is almost completed, while the Arabica harvest is progressing well in all Brazilian coffee regions. About 75% of the coffee cherries have been collected so far. The Safras & Mercado agribusiness consulting agency estimates the 22/23 crop with 61 million bags.
Actual weather forecasts are not showing any signs of frost danger. Warm and dry days in the past months and more mild days ahead. These conditions propel a faster drying process of the coffee, and warehouses in the interior are filling more and more. The dry mills are running at total production, and samples of the new crop are looking good so far.
Port activities continue to be slow as there is a shortage of adequate food containers. Without proper containers, exporters lose the bookings on the vessels, and hence, delays become unavoidable.

 

Colombia

The Presidential elections brought along a substantial devaluation of the Peso as the new incoming leftish President Gustavo Petro worried investors. The macroeconomic environment with a strong US-Dollar is further adding pressure on the Peso, and it is expected to continue weakening over the following weeks.
Finally, some sunny days. Rains have been excessive over the last months in Colombia's Eje Cafetero (Caldas, Risaralda, Quindio), Antioquia, Huila, Tolima, and other coffee-growing regions.
Weather forecasts show further sunshine ahead. This is good news for the coffee regions as drying of parchment had already become a true challenge.

 

Peru

The former union leader and now President of Peru, Pedro Castillo, has been facing internal political fights since his election twelve months ago. Corruption allegations and political instability with two survived impeachments are challenging his attempts to rule the country.
Climate change is also showing its face in Peru's leading coffee-producing regions. There has been excessive rain during the last months, directly impacting the harvesting and post-harvest processes. The harvest has started later than usual. Nonetheless, the lower-altitude regions are almost finished with their pickings, the medium-altitude coffee pickings are well underway, and the higher-altitude coffee fields are still completing their maturation process and just starting the harvest. Parchment is being delivered to the warehouses, and first lots are prepared for export in the dry mills.
The heavy rains have started to affect the road infrastructure making it difficult to reach the port. Transportation strikes are also slowing down inland logistics.
Activities at the port are running ok, but the volume of coffee arriving here for export is still low. As the containers for export increase, rolling bookings and delays will be on the agenda again.

 

 

 

General market situation:

 The visit of US Congress Speaker Nancy Pelosi to Taiwan intensified the already agitated situation in the Asia-Pacific region. After Mrs. Pelosis' departure back to the USA, China has been testing missiles in Taiwanese waters over the weekend. The geopolitical tension between the US and China is more than palpable. Hopefully, the saber-rattling will not escalate any further.
The enduring conflict between Israel and Palestinian militants has sparked new waves of violence and military attacks on both sides. Fortunately, a ceasefire has been negotiated now.
The 12 million people city of Wuhan in China (remember the name?) has locked down as new Covid cases arise. China's Zero-Covid policy is finding more and more opponents within its population as it deterministically dictates day-to-day life.
Meanwhile, as the Russian invasion of Ukraine continued, another three fully loaded grain vessels left the port of Odesa through the safe passage corridor.
To further mitigate rising prices and inflation, the Bank of England raised interest rates by 0.5%. This is the most significant rise in 27 years and will probably push the UK further into recession mode. According to economists and central bankers, this is the best cure for a 13% inflation rate. The European Central Bank will surely follow soon with further interest increases.

The coffee world stays volatile, and the price spectrum continues in a rollercoaster modus. Most commodities – from copper to cotton and oil to lumber – have substantially retraced from the highs towards the lower price range. However, global coffee prices remain elevated. Even if international prices for Arabica and Robusta might come lower, it looks as if differentials stay firm and compensate for price retracements in the futures market. One main reason are the record-low certified stocks on the Intercontinental Exchange (ICE, futures market for coffee) dropping to 660,564 bags. A global macro bearish environment is combined with a more bullish coffee-fundamental reality. The market trend is unclear, but volatility stays.

You can follow the principal market changes in the below table. We update it weekly.

 

 

 

Costa Rica, Guatemala, Honduras, and Nicaragua

All Central American coffee-producing countries have registered good rains over the last months. So far, the heavy tropical storms have not converted into hurricanes, but the season still has a couple of months to go. We keep our fingers crossed, hoping for a season without climatic catastrophes.
Besides the rains, the last weeks have brought along some warm and sunny days. Coffee cherries are now maturing on the trees, having abundant moisture in the soil. This combination will yield a positive impact on the development of the 22/23 crop.
The 21/22 harvest turned out smaller than expected in all of Central America. This is a further reason for increasing replacement prices in origin.
Production costs rise due to price increases for workers, fuel, and chemical inputs.
Migration continues to be a big concern for coffee farmers in Central America. Finding people willing to work in the fields during the harvest has become tricky.
At the same time, money (remesas) coming from Central Americans, mainly working in North America, continues to be the primary source of income for the Central American economies.
Exporter's dry-mills are running and finishing off the 21/22 season. There is little coffee left, and everybody focuses on the logistical challenges of getting the contracts shipped.
The general shortage of food containers is something all countries of origin have had in common for the last few months. This causes logistical operators to switch bookings at the risk of missing vessels. Despite some occasional alleviation, the general tenor remains fragile, and delays continue to be a consequence.
The production forecasts for the upcoming season look encouraging. If prices remain on the high side, farmers should be able to make a good profit:

 

General market situation:

 After the hammering news of the previous weeks, we had a summer-lullaby-week. But regardless of this momentary lapse, the Russian military aggression on Ukraine goes on, and unfortunately, there are no signs of negotiations for peace ahead.

The latest US inflation data released last Wednesday was lower than expected, looking like the right trend has started. But this "good news" might be confusing as the inflation rate still shows a robust 8.5%. Nonetheless, particularly stock markets showed a very bullish move. We have not reached the point of flattening interest rate curves, and further interest rises will be a vital component of central bankers' tools to fight inflation.
The heatwave in Europe continues with fierce fires in the southwest of France, record-high temperatures, and severe drought in most European countries. Rivers carry very little water, significantly affecting the local fish population and inland logistics. Ships are only allowed to navigate the shallow waters in the rivers with almost no cargo on board.
Despite the still somewhat bearish macroeconomic environment, international prices for Arabica and Robusta had a bullish week-on-week performance. Further draw-downs of certified Arabica stocks in New York brought the position to a 23-year record low. Additionally, funds have added some long positions to their agriculture commodities (e.g. coffee, cocoa, sugar, cotton, lumber, and other grain).
Arabica posted a new 30-days with 226.60 c/lb. The trading range of almost 20 c/lb shows this market's only true consistent pattern: volatility!

You can follow the principal market changes in the below table. We update it weekly.

 

 

Ethiopia

The cost of living continues to rise in Ethiopia alongside inflation. Mainly food and fuel are leading the price increase.
Price volatility in the international coffee markets has brought the commercialization of coffee almost to a standstill - little new business during the last weeks.
Rains continue throughout the country. Roads become mudslides, and traveling from rural areas toward Addis Ababa is challenging. Transportation of parchment and jenfel from the interior to the dry mills in Addis gets delayed.
The ongoing rains also have a positive side: the crop is ripening fast, and particularly in the South-Western part of Ethiopia (Jimma, Bench-Maji, Kaffa), the harvest is expected to start toward the beginning of October – only six weeks to go...
The general lack of food containers does not come to a halt. This situation forces further delays along the whole supply chain.

 

Kenya

General Elections for a new president were held last week, but 50% of the votes still need to be counted. William Ruto (51%) and Raila Odinga (49%) have a fierce head-on-head final race. Let's hope for a peaceful transition of power.
The harvesting activities are progressing well. The quality of the fly-crop coffees is looking good.
The auctions for coffee have started and are taking place weekly. Last week was an exception as the was a recession due to the elections.
For the time being, there are enough containers, and vessels are departing almost on time. Fortunately, we see only a few delays in Mombasa these days.

 

Tanzania

President Samia Suluhu Hassan traveled to Mbeya to attend the yearly farmer-thanksgiving celebrations to honor their contribution to the country's economy. Her speech was encouraging for farmers and particularly for youth in rural areas.
The harvest is progressing well in the southern highland. Mbinga is still a little delayed compared to the Mbeya and Mbozi regions. We expect the first samples to arrive soon at our office. Some early pickings occur in the north's lower to mid-altitude areas around Mt. Kilimanjaro.
There were rumors about the auction becoming digitalized, but the Tanzanian Coffee Board has not made any concrete announcements. A digital auction would be a true time saver and avoid the weekly time-intensive travels to the coffee regions. So far, the coffee auctions have not started yet; neither physical nor online.
Logistical activities at the port of Dar-Es-Salaam are slightly congested, causing delays. This situation might change once the container flow starts to increase.

 

Rwanda

It looks like the military escalation between D.R.Congo and Rwanda has calmed down.
The harvest is more than completed now, and all washing stations are wrapping up their operations. Drying beds are dismantled and locked away. Some basic repairs are done to the equipment. In turn, dry mills in Kigali and the interior run at full steam. They are preparing washed coffees for export and some exciting natural and honey profiles.
Nonetheless, exporters who have bought cherries during moments of fierce competition far above the minimum prices now have difficult times selling as their pricing does not match buyers' expectations.
Coffees are moved to Dar-Es-Salaam for export. Customs clearance at the Rwanda-Tanzania borders is running smooth, but shipments are slightly delayed due to congestions at the port.

 

East African Coffee Production

 

General market situation:

The global economic environment continues to show quite obvious bearish signals. Increasing interest rates and the US Fed and other Central Bank's willingness to continue raising rates to tame inflation are strong signals slowing down the world's economy. With a considerably weaker economy, China is missing its GDP growth forecasts, joining the global bearish canon.
Climate change, Russia's war in Ukraine, China's 0 Covid policy, and the worldwide aftermath of the pandemic, inflation, and global uncertainty all add more weight to the bearish side of the equation.
But there is always light at the end of the tunnel, and maybe this is a beginning: we see freight rates cooling down a bit and some degree of normality getting back to the logistical environment. Or are we simply getting used to the supply chain chaos as the new normal?

The ICE coffee inventories are at the lowest since 1999, counting only 571,580 bags. However, some certified coffee inventories were retendered to the ICE board this last week. Brazil is the most crucial barometer for international Arabica coffee prices. Fortunately, good rains were registered in the coffee regions, counterbalancing drought concerns. The last week came along without major turbulences on the coffee front, and prices meandered in an established 30-day corridor between 200 c/lb and 220 c/lb (KCZ22).

You can follow the principal market changes in the below table. We update it weekly.

 

Indonesia

Indonesia's President Joko Widodo confirmed Russia's President Putin's and China's Xi Jinping's intention to attend the Group of 20 Summit. US President Joe Biden and other international leaders will also be attending the summit taking place on Bali in November.
Some rainy days in the northern part of Sumatra help to speed up the maturation process of the new Arabica harvest. This is set to start in a couple of weeks.
On south Sumatra, the Robusta harvest is completed, and dry mills are busy preparing coffee for export.
The harvest is also completed on Java, Bali, Flores, and Sulawesi.
Activities at the port of Medan are running without any significant complications – at least for now and considering the flow of coffee being relatively low.

 

India

India is in the middle of the monsoon (or rainy season). This usually goes from June to September.
The harvest is over, and all coffee is picked and stored in warehouses ready to be processed for export or is being "monsooned" in adequate warehouses.
The main road to the port of Mangalore was covered by a mudslide. As it was impossible to pass, a logistical bottleneck arose. Traffic was re-routed to the port of Cochin. This, in turn, put too much pressure on Cochin's logistic infrastructure, being a cause for further delay. Now, finally, the road to Mangalore is passable again. The only problem remaining is the access to food containers; hence further delays must be taken into account.

 

Vietnam

A good amount of rain in the Vietnamese Central Highlands helps the ripening process of the upcoming Robusta harvest. The provinces of Dak Lak, Gia Lai, Dak Nong, Lam Dong, and Kontum are among the most prominent Robusta-producing regions.
Farmers are selling the last beans of this crop and are locking in excellent prices as exporters are forced to pay to keep their contracted commitments.
Dry mills are milling, grading, and packing coffee for export and trying to cope with the logistical challenges.

 

PNG

Finally, elections are completed in PNG: James Marape comes to power as the new Prime Minster. Elections are always a highly complex matter in PNG as several difficult cultural barriers must be considered. But with this significant factor of internal turbulence out of the way, people can focus again on their everyday life.
After some initial rains weather has turned extremely hot and dry lately.
The elections have caused the internal flow of coffee to halt. Also, at the port, activities were almost cero, producing a backlog of coffees that needed to be shipped, and cargo could not leave the port. 

 

Asia Pacific Coffee Production

Area: Green Coffee Quality and Training Manager (full-time; m/w/d)
Location: Hamburg, Germany
Start: now!

 

About List + Beisler:

As experts in green coffee, at List + Beisler, we focus on providing unique know-how to roasters worldwide. We are green coffee traders in the premium segment with headquarters in Hamburg.

Behind List + Beisler, is a highly dynamic and service-orientated team with a professional mindset. We go to great lengths to meet the needs of our customers and are singularly focused on finding the right coffee for every roaster.

We are now looking for a passionate new colleague to enhance the quality experience of our customers further. 

 

We Are Hiring – Coffee Quality & Training Manager (full-time; m/w/d)

  

Job Description

• Global quality control of green coffee for L+B's offices in Europe, the USA, and Australia.

• • Green coffee grading and physical analysis.
  • Sensory quality control, cupping, and evaluation.
  • Detailed documentation of results in our digital systems and platforms.
  • Develop strong relationships on quality-related topics with key suppliers (farmers, cooperatives, exporters) and customers (roasters).
  • Actively select and curate offer samples.
  • Management of incoming and outgoing samples in the lab.
  • Regularly upgrade and maintain quality control equipment.

• Education and Training

• • Facilitate cuppings and training for the List + Beisler sales team.
  • Organize and lead cuppings with customers in our lab and at roaster's facilities.
  • Organize cupping events at coffee fests and exhibitions.
  • Represent the company in national and international coffee events.
  • Network with all members across the coffee industry.

• Food Safety and Quality Control Management

• • Monitoring and management of quality control process from origin to the roaster.
  • Continuously develop and upgrade the internal quality management system (following international standards such as HACCP, IFS, etc.).
  • Communication and detailed documentation of samples and results from external laboratories.

 

Skills and Qualifications

• You have at least 5 years of relevant professional experience in a comparable position in a company or a marketing agency.
• You have a business degree from a competent university with a strong focus on marketing/digital marketing.
• You have strong communication skills in English and German with a refined sense of language, and you enjoy copywriting.
• You take the lead with a hands-on mentality, taking ownership of your projects.
• You pay attention to details and like to be creative.
• Working in a team is key to you – you are ready to explain, discuss and convince non-experts in your field to reach goals.
• You know your tools: CMS programs (e.g. TYPO3), Microsoft Office, Adobe Suite (InDesign, Photoshop, Premiere), SEO, SEA, Google Analytics, LinkedIn, Instagram, etc.

 

What We Offer

• A small and highly motivated team where you can truly leave your footprint.
• A very international working environment with offices in Germany, the USA, and Australia.
• Coffee knowledge of more than 120 years; you will undoubtedly develop your coffee knowledge and your coffee skills.
• An office with a broad view over Hamburg's historic "Speicherstadt" and flexible working times.
• Finest specialty coffee for your mug all day long.

 

 

Interested? Contact us at jobs@list-beisler.de

 

 

General market situation:

All eyes (and ears) were placed on Jackson Hole, where US Federal Reserve Chairman Jerome Powell warned his audience that the fight against inflation would potentially hurt some fellow Americans. Investors reacted to his message by selling the market and pushing stock prices down.

There have been some reports in the market on the dryness in Brazil's most prominent coffee-producing regions. Although dryness is not atypical for this time of the year (Brazilian winter), changing climatic conditions in all coffee-producing countries are sounding the alarm bells. This situation makes funds nervous. Hence, we saw a massive rally last week, pushing the Arabica prices up 11.6%, reaching a new 6-month high at 242.95 c/lb. This significant move comes despite some rather fundamental bearish news released by the International Coffee Organization (ICO) on growing export figures and the bi-annual report from the United States Department of Agriculture (USDA) projecting an almost 5% production rise towards 174.95 million bags for the 22/23 crop.
Prices have been above 200 c/lb for almost a year, and the industry is expecting some price retracement. Is this rally the last try of a bullish move before the market retraces?

You can follow the principal market changes in the below table. We update it weekly.

 

 

Brazil

General elections are around the corner and scheduled to take place on October 2. The campaign of both candidates, actual President Jair Bolsonaro and ex-President Luiz Inacio Lula da Silva, has started, and they had their first TV debate, interchanging accusations of corruption. According to the latest polls, the other candidates for Presidency are not in close sight of both frontrunners.
The harvest is progressing well, and the dry weather is positively impacting the collecting and drying processes of the coffee. Almost 95% of the new crop has been collected.
Despite some reports on the dry weather situation in the main coffee-producing regions, it is essential to point out that the Brazilian winter weather is usually dry. The months before the dry season started had reasonable amounts of rains, soil humidity was restored, and irrigation dams were filled to normal levels.
Activities at the port are running relatively smoothly. There are the usual delays, but coffee is being exported, and shipping lines keep their bookings.

 

 

Colombia

To restart peace negotiations, the new leftwing President (and former guerrilla fighter), Gustavo Petro, suspends arrest warrants and extradition orders for Colombia's guerrilla rebels ELN.
The official production numbers released by the Federacion Nacional de Cafeteros (FNC) for the 20/21 harvest show 13.394 million bags. From October 21 to July 22, 9.9 million bags. With two months still open to finish the crop year, 3,5 million bags would be needed just to reach the previous year's production levels. This looks unrealistic, adding substantial pressure on internal coffee prices. Exporters buy coffee to fulfill actual contracts and some older (...postponed...) shipments of the previous season. This situation aggravates the already narrow supply; hence, differentials are reaching new highs.
Weather remains a significant component in the production equation. August has been very rainy; as seen in the past, excessive rains harm production. The changing climatic conditions are already affecting Colombia's coffee production. Fortunately, the last weeks have had abundant sunshine in the central coffee-producing regions.
Activities at the port of Buenaventura, Cartagena, and Santa Marta continue to be slow and tedious operations. There is a shortage of adequate food containers, and shipping lines are overbooked.

 

Peru

The Peruvian Government is suing the Spanish Repsol company for 4.5 billion USD over oil spills in January of this year. Over 10,000 barrels of oil ran into the Pacific Ocean, the worst ecological disaster around Lima in recent history.
Colombia's tight coffee supply situation has increased interest in Peru's washed Arabica coffees. This situation and a general perception of a smaller 2022 harvest are pushing internal prices to new highs.
The harvest in the low- and mid-latitude regions is almost done, only the last bits remaining to be picked. The higher altitude areas are well underway. The quality looks very good so far.
Cooperatives and private exporters focus on receiving parchment, storing, milling, and preparing the coffee to be shipped.
The situation at the port looks relatively positive, and - at least for the time being - our logistics team is getting bookings placed, and coffee is shipped almost in time.

 

 Coffee Production Estimates in South America

 

General market situation:

The bearish macroeconomic scenario continues to slow down the global economy alongside increasing interest rates to fight inflation.

Commodities generally had a calmer week, and prices have come lower. The main exception is the gas price, particularly in Europe, where Gazprom, Russia's leading gas supplier, has just turned off the remaining Nord Stream 1 gas pipeline due to alleged oil leakage. Siemens, the company running the maintenance of the pipeline, has denied any technical problems. The situation remains highly political, and Putin is playing with his gas biceps to show his muscles right before the summer ends and the colder days begin.

The Covid-19 pandemic is no longer the main focal point, thanks to proper vaccinations. But with its strict 0-Covid policy, only China has forced key port cities, including Shenzhen and Dalian, into a lockdown as new Covid-19 cases have come up. Tianjin is undergoing mass testing.
The 0-Covid policy is undoubtedly slowing down logistics and China's economy.

New York remains closed today as the US is celebrating Labor Day. But after the sharp rally, we saw Arabica prices tracing back by -3.9% closing the week at 238.10 c/lb. The Robusta market is open today, and on a week-to-week comparison, Robusta prices fell by 2.5%.

You can follow the principal market changes in the below table. We update it weekly.

 

 

Costa Rica, Guatemala, Honduras, and Nicaragua

This is the first time in 25 years that no hurricane has created a significant mess in the Central American countries. The official hurricane season lasts through November. Meteorologists carefully monitor the weather patterns, and we keep our fingers crossed that the 25-year record can be set for the whole season.

As we move towards the official end of the coffee year (September 30), we see export numbers falling behind targets. For example, Honduras, Central America's largest washed coffee producer, is expected to export 10% less than last season. Costa Rica is no exception, as it exported 5.5% less coffee than during the 20/21 harvest.

 

Good weather conditions with abundant rains and sunshine are benevolent for developing the 22/23 crop.
There have been sporadic pockets of Roya outbreaks in some scattered regions with excessive rains.

 

Coffee farmers are taking advantage of the relatively quiet time and are preparing for the upcoming harvest. They are doing maintenance and repair work on their equipment. Additionally, farmers belonging to a cooperative and being part of a voluntary certification scheme – such as Fairtrade, Organic, Rainforest Alliance, etc. – are undergoing training and getting ready for internal and external audits.

 

The harvest is expected to start in October in the lower altitude regions of Central America. The mid and higher altitude areas shall start a month later.

The production forecasts for the upcoming season look encouraging. If prices remain on the high side, farmers should be able to make a good profit:

 

General market situation:

As we enter the seventh month of Russia's military invasion of Ukraine, we hear of some significant military setbacks of the Russian troops.
Urgently needed grain shipments are planned to leave Ukraine in the next few days by ship.
After a very long "wait and see" strategy, the European Central Bank has finally raised interest rates by 75 points to fight the growing inflation rates. It wouldn't be surprising to see further interest rate hikes in the upcoming months as inflation continues to propel energy and food prices across Europe.
As China is further sticking to its strict Cero-Covid policy, other provinces and cities, including Chengdu, Shenzhen, Heilongjiang, and Tianjin, are forced back into lockdowns. Fortunately, logistic operators with a negative Covid-19 test can still transit and move cargo and avoid major logistical disruptions.
The NYC market has constantly been retracing since its highs of 242.95 c/lb registered on August 25 and reached its weekly low on Thursday at 220.65 c/lb. The week closed positively, driving prices back higher at 228.50 c/lb.

You can follow the principal market changes in the below table. We update it weekly.

 

 

Ethiopia

New sparks of war have been reported in southern Tigray between the Government Military Forces and the rebels from the Tigray People's Liberation Front (TPLF). This horrible humanitarian situation will likely not have an easy solution as both parties continue their disputes. Despite international efforts from Kenya and the US, the conflict will not be solved soon, and there is a risk of expanding into other territories, such as the Amhara region.
A stagnating economy, war, and almost 30% inflation continue to add pressure on Ethiopia's currency; hence, the Birr continues its devaluation.
Farmers and intermediaries are holding their coffee sales back as coffee is often a safer investment than holding cash. Consequently, business activities are slow, and sales transactions only occur when someone needs money.
The upcoming 22/23 harvest looks pretty good in all significant coffee-producing regions. Some lower altitude regions in the southwestern part of Ethiopia have already started to pick the first cherries, but the beginning of the season is expected from mid-October onwards. So far, trees in the south (Yirgacheffee, Sidama, Guji) and in the southwest (Jimma, Limu, Kaffa, Bench Maji, Lekempti, etc.) look well-nourished and are carrying reasonable amounts of beans.
Export logistics are a challenge as there is an ongoing shortage of adequate food containers in Addis Ababa. Coffee is being trucked to Djibouti as loose cargo and then containerized there. This is a costly exercise as each truck is stuffed with two drivers. Due to security reasons and to protect the expensive cargo from thieves, trucks must reach Djibouti in one go, without extended breaks.

 

Kenya

The Supreme Court has finally confirmed William Ruto as Kenya's new president. After initial concerns were raised by electoral commissioners, the razor-thin victory of Mr. Ruto over Raila Odinga was put on hold. But after recounting the ballots, clarity has been established, and Mr. Ruto has been officially confirmed as Kenya's new president. Congratulations on a peaceful handover of power.
The fly crop has been collected and is now being processed in the wet mills. The quality looks very promising.
The weather has been typical for this time of the year, with dry and sunny but generally cold days.
Marketing agents are busy selling coffees at the auction and milling and preparing the coffee for export.
Besides some usual delays and difficulties in finding usable containers, activities at the port of Mombasa are running relatively smoothly.

 

Tanzania

The first action of the season has finally taken place on September 8 in Moshi. This is good news as traded prices enable further transparency along the value chain and make commercialization of coffee in the internal market easier.
The harvest is in full swing in Tanzania's principal coffee production regions. In the north, around Mr. Kilimanjaro, and in the south (Mbeya, Mbozi, and Mbinga), the cherries are being collected and de-pulped, fermented, washed, and dried accordingly.
The weather conditions are very good, with abundant sunshine for drying the coffee and some scattered rains.
So far, Dar-Es-Salaam port shipment activities are running without significant delays.

 

Rwanda

Coffee exporters are in a difficult situation as they have paid very high cherry prices during the harvest, unable to match international buyers' expectations. A retracing NYC is adding more fuel to the fire and not alleviating this situation.
The latest rains have started flowering in the western, southern, and eastern coffee-producing regions. Always a fantastic time to travel and visit coffee fields covered in white and full of jasmine perfume...
The borders between Rwanda and Tanzania are open, and trucks can transit without significant delays. Logistics are slow, but this is nothing unusual considering road infrastructure and distances. As a consequence of increasing prices for fuel and labor, we see considerable rises in logistic costs for moving the coffee from Kigali (FOT) to Dar-Es-Salaam (FOB).

 

East African Coffee Production

 

General market situation:

The macroeconomic picture continues to be worrying as inflation rates continue their steady growth despite initial efforts from Central Banks around the world.
It is now expected that Jerome Powell, Chairman of the US Federal Reserve, will take the lead in another round of interest hikes to pull the inflation genie back into its bottle. In any case, the economic slowdown is already taking place. Stocks plunged, awaiting a substantial move from the Fed.

As the USD gains more strength, currencies in coffee exporting countries are weakening. Additionally, we saw some rains in Brazil's coffee-producing regions, and more are announced for the next few days. They are highly welcome and bring much-needed moisture to the soils. Consequently, prices in New York (Arabica) and London (Robusta) have fallen substantially by 5.9% and 2.7%, respectively, on a week-on-week comparison. On Friday, the Arabica contract reached new lows at 211.35 c/lb, and the general picture remains bearish.

You can follow the principal market changes in the below table. We update it weekly.

 

Indonesia

In November, Indonesia will be hosting the G20 summit in Bali. China's President Xi Jinping and Russia's Vladimir Putin are officially invited and plan to attend.
The competition between coffee exporters and the local roasting industry – primarily producing soluble coffee for the 3-1 saché-packs (soluble coffee, powder milk, sugar) – is fierce.
Climate change directly affects the weather conditions in Indonesia, modifying the old-known harvesting periods. The coffee harvest in Java was just completed when excessive rains pushed the flowering of the 22/23 crop. In northern Sumatra, the first pickings of the Arabica harvest have started. Nonetheless, the amounts of rain are making accessibility to the farms difficult and slowing down the maturation process of the coffee cherries.

 

India

It's monsoon time in India, and it's pouring. Rainfalls are 3.4% above the historical average. The monsoon rains bring about 75% of India's annual rainfall, and it's badly needed for irrigating the farmland soils.
Climate change is heavily impacting the region and the local population and infrastructure.
Nonetheless, with abundant water, coffee cherries in the growing regions of Karnataka, Kerala, Tamil Nadu, and Chikmagalur are developing pretty well. The harvest is expected to start towards the end of the year.

 

Vietnam

The last weeks have had very good rainfalls in the coffee-producing regions in the Vietnamese Central Highlands around Dak Lak, Gia Lai, Dak Nong, Lam Dong, and Kontum. This time of the year always brings a good amount of rain and favors coffee farmers as they can skip irrigation.
Coffee cherries ripen fast, and some farmers have already picked some early-crop coffees. But the harvest is expected to pick up towards the end of September / beginning of October.

 

PNG

The Presidential election ended with a known man in charge: James Marape. He has appointed new cabinet members and created what is believed to be the first worldwide Ministry for Coffee. This will be headed by Joe Kuli, and his primary task will be to restore and establish a prosperous and growing coffee farming community. Coffee is the country's second agricultural export crop after palm oil.
A massive 7.6 earthquake (Richter scale) hit PNG. The earthquake's epicenter was in a remote region in the Eastern Highlands. Roads and infrastructure have suffered, but fortunately, no people died.
The harvest is over, and parchment is coming down the mountains. Dry mills are running at total capacity, milling and packing the coffee for export.
The situation at the port continues to be slow as there is a general shortage of adequate food container equipment. Delays continue to be a logical consequence.

 

Asia Pacific Coffee Production

General market situation:

Putin sharpens his rhetoric toward the West and threatens to use nuclear weapons. At the same time, he is mobilizing reservists and recruiting younger soldiers as Ukraine is winning back its own territories in the northern regions. Demonstrations against military mobilization in Moskow and other Russian cities were severely suppressed by the police.

The US Federal Reserve has increased the interest rates by 75 points. This is the fifth rate hike in 2022 and the third consecutive rate hike of 75 points, propelling interest rates toward 3.5%, the highest level since 2008. Jerome Powell addressed the nation, stating he would continue increasing rates if inflation did not get tamed. Securing price stability is the primary goal - even at the cost of a significant recession.

A series of typhoons have made landfall in the Asia Pacific region, severely impacting the shores of China, South Korea, Taiwan, and Japan, affecting the main ports, and even killing two people. Port operations are delayed.
A massive earthquake (7.6 magnitudes on the Richter scale) hit western Mexico last Monday. The epicenter was about 60km away from the port of Manzanillo, the country's largest and busiest container port, and killed at least 2 people.

The combination of the aforementioned bearish macroeconomic scenario, increasing interest rates, untamed inflation, war, nuclear threats, and natural calamities have undoubtedly negatively impacted the relatively bullish start of the week, pushing prices back south on the Arabica and Robusta coffee exchanges. 

You can follow the principal market changes in the below table. We update it weekly.

 

 

Brazil

Next Sunday will be election day in Brazil. A new President and National Congress will be elected. Actual polls reveal a slim lead for former President Luiz Inácio Lula da Silva, but Jair Bolsonaro is catching up... We will indeed watch the news next Sunday!
Conab, Brazil's National Supply Agency, has reduced its crop numbers to a new estimate of 50.4 million bags. This is a reduction of 3 million bags from their previous harvest forecast. The main reasons for the smaller crop are the consequences of drought and the frost in July 2021. Safras & Mercados, another agricultural research and consulting firm, has also reviewed their crop forecast to the downside by 2.9 million bags. The correction mainly comes from the arabica production, reducing their forecasts from 38.8 to 35.9 million bags. Robusta seems to be pretty in line with the estimates of 23 million bags.
The last weeks have brought along abundant rain, helping to fix the flowering on the trees. Soil humidity is restoring at a steady pace. Weather outlooks show more rains coming in, with November and December as the wettest months of the season.
Dry mills are running at full steam, and warehouses are getting packed with coffee ready for export.
The activities at the port continue to be slow as there is not enough place on the vessels and bookings need to be rescheduled.

 

Colombia

Finally, some dry weather is coming along after the excessive rains we have seen over the last months over all of Colombia's main coffee regions. Only Antioquia reports more rains causing landslides and roadblocks.
Parchment is coming down the mountains in the Huila and Tolima regions in a steady flow. Antioquia and the "Eje Cafetero" (Caldas, Quindio, and Risaralda) also start their deliveries.
Dry mills are busy milling, grading, and preparing coffee for export.
Activities at the main ports of Buenaventura, Cartagena, and Santa Marta are running better. Still some slight delays, but the situation is generally improving.

 

Peru

Anibal Torres, Peru's Prime Minister, resigned due to personal reasons, adding to the country's uncertain future. He is the fourth Prime Minister resigning under President Castillo and leaves at a time when several criminal investigations are surrounding the President.
The harvest is now fully completed at the lower- and mid-altitude farms. At the higher altitude regions, the final picking rounds have started, and it looks like the harvest will be about 30% lower than initially expected. This pushes internal prices through the roof, and internal competition is becoming fierce. Intermediaries are buying coffees in regions they are usually not involved in.
Cooperatives and private exporters are receiving parchment, milling, and preparing coffee for export. Qualities look very promising.
The situation at the port is delayed as finding a place on the vessels has become challenging. Ships are often overbooked.

 

Coffee Production Estimates in South America

 

 

General market situation:

The Nord-Stream 1 and 2 gas pipelines in the Baltic Sea bringing gas from Russia to Europe got severely damaged in what is believed to be an act of Russian sabotage. Hundreds of thousands of cubic tons of methane-gas leak through the water into the atmosphere. Sweden sent a specialized submarine to repair the holes; until now, gas has continued to leak. The death toll and devastation coming along with Russia's invasion of Ukraine are horrifying. But additionally, the effects of this utterly unnecessary war on global warming can not be neglected.

Russia officially annexed the occupied regions of Ukraine through a farce-like referendum. Most civilians in those regions had fled, and the remaining population was "gently encouraged" to go to the polls. Russian soldiers escorted Pro-Russian officials when visiting the homes and ensuring everybody was placing his cross at the "right" place... Hence, the results of the referendum are not surprising at all. The consequences are potentially long-range as Putin is already threatening to use nuclear weapons to defend Russia (and the just annexed provinces are already counted-in as Russia's new territorial sovereignty). Is he bluffing or plotting the next (horrifying) move?

It all looked like the first season in over 25 years without any hurricanes. But then hurricane Ian came, destroying vast regions in the US State of Florida after passing over Cuba and leaving the tropical island without electric power.

Do you believe in spooky number prophecies? Well, on the 19th of September of 1985 and 2017, the globe was shaken by massive earthquakes reaching 7 points above the Richter scale. This year, on Monday 19th, a 7.7 magnitude earthquake hit Mexico's Central Pacific Region. Coincidentally, Manzanillo's port had been closed to protect workers from the upcoming Tropical Storm Madeline. Nonetheless, the earthquake destroyed infrastructure claiming the life of one civilian.

This past week coffee prices have followed the usual operetta logic of the previous sessions... spoiling the end of the operetta: on a week-on-week basis, the Arabica prices closed only marginally higher at 221.55 c/lb on Friday (+0.5%). But the week started with an extremely volatile Monday, marking an intraday range of 13.65 c/lb. Despite some escapades and market-drama scenarios, the weeks pass, generally hovering around 220 c/lb.

 

You can follow the principal market changes in the below table. We update it weekly.

 

 

Costa Rica, Guatemala, Honduras, and Nicaragua

The deeply inverted market structure in New York makes forward offers unlikely. The still delayed global logistics and supply tightness keep differentials under pressure. It does not like prices will come off soon.

This is the time of the year when tropical storms and hurricanes bring much rain to the coffee regions. Rains usually help the maturation process of the cherries. In some areas, the torrential showers provoked landslides and damaged the infrastructure.

The beginning of the harvest is coming closer in all lower altitude regions in Costa Rica, Guatemala, Honduras, and Nicaragua. On the other hand, the higher altitude areas will start picking the red, ripe cherries towards the end of the year.

A significant source of concern is the increasing labor cost. Low-skilled workers from the entire region have been massively migrating toward the US border, looking for better job opportunities and a safer environment for their families. Those coffee-pickers who remain in the areas enjoy better payments for their labor.

The production forecasts for the upcoming season look encouraging. If prices remain on the high side, farmers should be able to make a good profit:

 

General market situation:

Another week with a jerky movement in New York (Arabica) passed, and both markets (Arabica and Robusta) are equally challenging for bulls and bears alike. Arabica futures prices have meandered around 220 c/lb (+/- 10 c/lb) for almost 5 weeks with a general lack of clear direction. A bearish macroeconomic reality and a strong USD confront bullish arguments such as firm differentials, delayed logistics, and lower exports from Brazil, Colombia, and Honduras. The only evident trend in the last months has been the consistent withdrawal of certified stocks from the exchange. Industry roasters and multinational traders alike have taken certified stocks into their portfolios as - for the time being - they are an attractive value-for-money proposition. Certified stocks are approaching the 100,000 bags benchmark. The last time stocks were below 100' bags was in an extended period going from 1996 to 1999. 

You can follow the principal market changes in the below table. We update it weekly.

 

 

Ethiopia

The Government and the rebel troops of the Tigrayan People's Liberation Front (TPLF) have both accepted an invitation from the African Union to negotiate peace. They were scheduled to meet in South Africa this weekend. This negotiation will hopefully end two years of war in the northern territories. Thousands of people were killed, and millions were forced to flee their homes.
The weather conditions have been very favorable for the proper development of the new 22/23 crop. Timely rains and abundant sunshine raise expectations towards a bigger crop compared to the 21/22 harvest.
In the lower-altitude coffee regions, the harvest has already begun. Farmers have started harvesting activities in Bebeka, Bench Maji, Kaffa, Tepi, and some parts around Jimma. In the southern highlands of Sidama and Yirgacheffe, wet-mill operators prepare for the season's beginning. The harvest will also start within the next two to four weeks.
The first indications on cherry prices are higher than those paid last season. This is the result of very high inflation. Prices for fuel and the cost of living have rapidly risen over the previous 12 months.
Exporters are still busy fulfilling shipments. The true challenge is becoming adequate food containers. The weakening national economy is also reflected in fewer imported goods; hence, the availability of empty containers for exporting coffee is limited.  

 

Kenya

The last coffees from the fly crop are being auctioned, bringing the 21/22 crop cycle to an end soon. Marketing agents are milling parchment and offering it at the auctions. Exporters are doing their best to sell the coffee to overseas buyers.
Coffee farmers are focussing on the ripening of the 22/23 main crop, expected to start towards the end of this year. Weather has been very good; hence everybody is expecting a good start into the new crop cycle.
Logistics are running relatively smoothly. There are enough food-grade containers, and shipping lines regularly call Mombasa.

 

Tanzania

The harvest in the southern highlands around Mbeya, Mbozi, and Mbinga is completed now. Parchment is drying under the bright African sun, and dry mills are pursuing their operations.
In northern Tanzania, around Mt. Kilimanjaro, the harvest is progressing. On the outskirts of the Ngorongoro Crater, farmers are still picking coffee cherries. First samples of these regions are expected soon.
The coffee auctions are not really achieving their goal. Farmer's price expectations are higher than what exporters are willing to pay. Both sides walk away frustrated: farmers without cash and exporters without coffee.
Dar es Salaam is fully operational with usual delays. The main difficulty reported is the insufficient availability of food-grade containers.

 

Rwanda

A good amount of rain has been pouring down over the last weeks, inducing the flowering of the coffee trees in all of Rwanda's coffee-growing regions.
Farmers work in the fields and prepare their farms for the next season.
Dry mill operators and exporters are working on the tail of the 2022 harvest. There are still offers of fully-washed coffees, but the selling prices are too high to attract new buyers.
Logistics within Rwanda are relatively unproblematic, but when it comes to the port situation, Tanzanian problems suddenly become Rwandan problems...

 

East African Coffee Production

 

General market situation:

Typhoon Noru made landfall in the Philippines, Vietnam, and Thailand. But besides bringing strong winds and massive rainfalls, all port operations were not interrupted. In fact, it looks like the situation at the ports in countries of destination is beginning to ease. Ships are no longer anchoring outside the harbors, and the only factor hampering a smooth supply chain is the lack of truck driver availability.

The supply chain disruption was a powerful argument for explaining the rising inflation. But even with these improving logistical scenarios, inflation can't be tamed. In fact, the first independent reports in the US show that inflation continues its rampant (and steady) course, infecting new parts of the economy. It is now mutating from goods into services, affecting sectors such as health care, education, airfare tickets, rent, and others. The US Federal Reserve conducted several interest rate hikes, but consumption and employment numbers are not bending, suggesting continuous inflation growth. This will surely encourage the Fed to increase interest rates once again. Another 75 points do not look unreal. The European Central Bank will need to follow this trend sooner rather than later - otherwise, a massive investor flight will be a realistic scenario.

The bearish macroeconomic scenario, reports on rains in Brazil, and increasing export numbers have pushed Arabica prices to new lows. The market has closed below the 200 c/lb resistance level for the first time in over three months. The gap between the spot month and the following month is narrowing. Will the market return from "backwardation" into "contango" modus soon? Robusta is following a similar path, reaching a new 10- week-low. Compared to the US-Dollar, the weak Euro is still keeping coffee prices in the Euro-Zone on the expensive side, and the falling futures prices are only partially reflected in the roasters' final price.

You can follow the principal market changes in the below table. We update it weekly.

 

Indonesia

More than 130 people died in a human stampede after a football match at Kanjuruhan stadium in East Java on October 1. Fans rioted on the football field, and police fired tear gas, leading to panic and a run for the exits. Indonesian President Joko Widodo suspended the football league and ordered an investigation. A special task force has been set up to investigate the reasons for this horrible incident.
The harvest on the island of Sumatra - Indonesia's largest coffee-producing island – has started earlier than usual. We hear of a hefty loaded start with lots of coffee already being picked. These are good news, and it looks like this new crop has the potential to be better than the past ears' harvests.
Port activities look relatively unproblematic, and vessels depart almost on time. Availability of food containers remains the main challenge so far.

 

Vietnam

During the last weeks, Vietnam was hit by several intense storms. Typhoon Noru was unquestionably the strongest, substantially increasing the risk of flooding, mudslides, along with hefty rains. Luckily the coffee regions in the central highlands around Dak Lak, Gia Lai, Dak Nong, Lam Dong, and Kontum were unaffected. Besides the storms, the coffee lands have had abundant sunshine encouraging proper bean maturation on the trees.
The month of October marks the beginning of the Vietnamese 22/23 robusta (forecasted 30.4 mil bags) and the much smaller arabica (forecasted 0.9 mil bags) harvest. Farmers are steadily picking coffee, and the new crop looks promising in terms of quality and availability. The only concern is the rising costs for fertilizers that will negatively impact the farmer's business case, affecting the cost side and bringing lower productivity along.

 

PNG

A massive earthquake (7.6 on the Richter scale) hit PNG last month. Infrastructure such as roads and housing was affected. But also, the fiber cable between Australia and PNG took a hit, turning communication to PNG into a true challenge.
The harvest is as good as finished. The last parchment remainders are coming down the mountains towards the dry mills. Exporters are preparing lots for being shipped.
The situation at the port continues to be slow and tedious. There is a chronic shortage of food containers making delays a logical consequence.

 

Asia Pacific Coffee Production

General market situation:

International coffee prices took a nose-dive over the last week. We must go back a long way to find similar low price levels: September 24, 2021.
On weekly comparison, the C-Market (Arabica) came in by 3% touching new lows of 186.20 c/lb and closing on a more positive note at 190.90 c/lb.
Adding to the weakening futures prices, we note that differentials are also starting to ease in some producing countries. The general pricing complex is beginning to relax after almost two years of a highly tight supply-demand situation. Is this the end of the bull market? Will prices return to the median levels around 120 c/lb to 140 c/lb? Roasters might be looking forward to more competitive pricing, while farmers hope for high prices as production costs have consistently been rising.

You can follow the principal market changes in the below table. We update it weekly.

 

 

Brazil

The final presidential elections are going to take place on October 30. This second part of the electoral process will bring along the new President. Bolsonaro or Lula have made it through the first round, and we will know the winner on Sunday.
There have been good and very timely rains in all coffee-producing regions. The soil moisture is restoring pretty well. Coffee trees look healthy, and the forecasts for the next 2023/24 harvest look positive. Finally, some good news after two seasons of a tight supply-demand equation.
The actual situation is keeping buyers and sellers nervous and uncertain. Little business materializes as buyers and sellers try to understand the new trading direction.
Exporters and cooperatives run their mills at total capacity, and warehouses are filled with coffee ready for export.
The main bottleneck continues to be the port logistic. Although we observe some improvements, getting a scheduled vessel finally booked remains tricky.

 

Colombia

The Federacion Nacional de Cafeteros (FNC) has just released fresh production statistics from the 21/22 harvest. The numbers are truly disappointing: this is the lowest production figure in nine years and 13% lower than the previous harvest cycle. Climate change is evidently heavily affecting coffee production in Colombia.
Inflation and rising costs for chemical inputs are driving further the cost of production while, at the same time, differentials are falling. Not an easy situation for farmers and exporters.
For the time being, we see prosperous weather conditions, and farmers are busy harvesting the main crop in the Eje Cafetero (Caldas, Risaralda, Quindio), Antioquia, Huila, Tolima, Santander, and around the Sierra Nevada de Santa Marta. Enough sunshine allows farmers to dry the coffee after being washed and processed on the farms. The occasional rains are welcomed by the trees in those coffee-producing regions with an inverted harvesting cycle (such as Nariño and South of Cauca).
Dry mills are fully operational and preparing the coffee for export. The activities at the ports of Buenaventura, Cartagena, and Santa Marta are running without significant complications. The ultimate challenge is finding adequate food containers.

 

Peru

Peruvian President Pedro Castillo cannot bring some degree of normality into his perpetually challenged government. He has just reached out to the Organization of American States (OAS) asking for their help as apparently another coup d'etat was trying to get him out of office.
The exact goals of the OAS mission are still unclear, but it would be a considerable achievement if they could manage to keep peace and reestablish a degree of stability within the country.
The harvest is almost over in all coffee regions of Peru. Some final picking activities are still going on in the high-altitude territories. It was a relatively small harvest with low productivity. The general low availability of coffee has pushed prices, and exporters and coops alike are extremely focused on buying the coffee they need for serving their contracts with international buyers. Some coops are genuinely struggling to find the coffee.
Logistics run pretty well, but the main challenge is finding adequate food containers. Unfortunately, delays are a consequence.

 

Coffee Production Estimates in South America

 

 

General market situation:

"Never catch the falling knife" – what an accurate description of last week's coffee market performance.
Arabica coffee prices have been falling for twelve consecutive sessions reaching new lows. To find similar levels, we must time-travel back to July 2021. Then, a frost in Brazil ignited a massive bull rally pushing prices higher until its peak at 253,40 c/lb (September 2, 2022).
Now the situation is different. We are entering the 9th month of Russia's invasion of Ukraine, and a massive worldwide recession overshadows economic development. Global inflation is forcing central bankers to tighten their monetary policies. The combination of war, climate change, soaring energy prices, economic uncertainty, and instability has slowed down demand for all goods – including coffee. At the same time, Brazil had seen abundant amounts of rains over the last months restoring soil humidity and encouraging bumper-crop thoughts for the 2023 harvest. The trees that were affected during the 2021-frost will now be back in production, and - considering all circumstances – coffee farmers were able to earn good money and take care of their farms.
Vietnam is entering the harvesting season now, and volume and quality look highly positive so far. The Central-American washed-Arabica-producing block is also about to begin its harvesting cycle right now.
In addition to a general improvement in global coffee supply, the logistical complications that originated mainly from COVID-related lockdowns are improving. Freight rates are dwindling, and transit times are beginning to shorten. Coffee flows from countries of production to countries of consumption in a more steady and reliant manner. Rising inventories in the US and Europe are a consequence.
Funds are actually reviewing their positions and selling coffee and other commodities. This is undoubtedly also pushing prices further down.

So, is the high-price honeymoon over? Who has the answer to this million-dollar question? We are indeed not able to foresee the future. There is no crystal ball, and markets can change direction very quickly. But unless some unexpected natural calamity shocks the coffee-producing regions – which we all honestly don't hope – the supply/demand situation is becoming more and more balanced. And in a marketplace, falling prices for Arabica and Robusta are the logical consequence.

You can follow the principal market changes in the below table. We update it weekly.

 

The following 2-year graph displays the NYC-price for Arabica coffee from November 2020 to date:

 Source: barchart.com

 

Costa Rica, Guatemala, Honduras, and Nicaragua

Main coffee-producing countries in Central America, such as Honduras, Guatemala, Nicaragua, Costa Rica, and El Salvador, are getting ready to begin the new 22/23 harvest. The lower altitude regions have already started with picking activities. So far, the first crop forecast indicates a 5-10% growth compared to the last season.
The weather has been very favorable, with rain and sunshine exchanging hands. We are in the final period of the rainy season. Along with the start of the picking activities, the weather is expected to become much drier. At the same time, we are still in the hurricane season in Central America. This week tropical storm "Lisa" is developing and moving toward Honduras and Guatemala, bringing along strong winds, heavy rains, and hail. So far, tropical storms did not affect the coffee-producing regions but damaged infrastructure. Local authorities and lots of voluntary helpers are busy removing mudslides from roads.
The main concern among coffee farmers is finding enough coffee pickers. Many people are leaving rural areas, and labor costs are constantly rising.
Wet- and dry mills are in their final preparations for receiving the entire flow of coffee. For now, operators are checking their machines and equipment and ensuring they are ready.
Activities at the port are running quite well – this is no real surprise as the demand for coffee shipments is very low. We will surely reassess this once the shipping season is in full swing. The main topic remains the general lack of food-grade container availability.

The production forecasts for the new 22/23 season look encouraging:

 

General market situation:

The macroeconomic scenario continues to look bearish. Central bankers in Europe are finally wakening up and smelling the coffee. To tame inflation, the European Central Bank continues to increase interest rates. The UK slides towards a massive recession, and the Bank of England is forced to raise interest rates to fight the growing inflation. The US Federal Reserve continuously monitors inflation development. Some first cracks in the economy are emerging. Nonetheless, the job market is still growing but considerably slower than in previous months. It is expected that the Fed will continue with the hawkish strategy. Increasing interest rates will still be on the menu, although at a more moderate speed. Adding to this, war and climate change aggravate the overall global economic situation.

What a Roller Coaster Market – intraday swings of almost 12 c/lb are nothing unusual anymore. After weeks of consecutive downside movements, the market is trying to find a new balance now, and this exercise is proving to be extremely clumsy. This week, we have seen a massively zig-zagging Arabica coffee market. All participants are somewhat nervous and erratic. Some news regarding slower exports from Central America and roadblocks in Brazil following the election (Lula won the tight fight while some of Bolsonaro's frustrated loyalists are orchestrating some noise activities) pushed the market higher. Still, it looks like the bears are getting back in charge.

You can follow the principal market changes in the below table. We update it weekly.

 

 

Ethiopia

The peace negotiations held in Pretoria, South Africa, between representatives of the Ethiopian Government and the TPLF rebels have borne fruits. The first tangible result is a successfully signed peace treaty between the conflicting parties. Now, there should be no impediments to bringing highly needed food and medical supplies to the Tigrayan population. This horrible humanitarian crisis needs to come to an end soon!
Inflation is heavily impacting the cost of living all over Ethiopia. Demand for imported goods is rapidly falling as people have less disposable cash to buy the more expensive imported items. Food and fuel are taking the lead in this rampant price increase.
The crop in the southern regions of Yirgacheffe, Sidama, and Guji looks very promising. Good weather conditions have brought along an even cherry ripening. Farmers will begin soon with their picking activities, and "agrabis" (local dealers and wet-mill owners) are looking forward to starting operations. The following weeks will surely bring more cherry flow to the washing stations.
The lower altitude regions in the southwestern part of Ethiopia have already started their harvesting activities. The upcoming 22/23 crop looks better in volume and quality than the previous season.
Access to the port of Djibouti remains without complications, but the true challenge is finding adequate food-grade containers. Placing a booking with all the momentary uncertainties is a challenging undertaking. Shipments are delayed by four to six weeks.  

 

Kenya

The newly elected President, William Ruto, is taking his place in the Nation's driver's seat. In an attempt to tackle inflation, he promised the public a series of Governmental subsidies. Such news is always balsam on the soul but will ultimately boost the national debt. The local currency (Kenyan Shilling) is acknowledging this already and has devaluated by 10% vs. the US-Dollar.
The main crop is starting its final ripening phase on the trees. The coffee fields around Mt. Kenya are getting red as abundant sunshine and rain positively impact the cherries' maturation. Nonetheless, the early forecasts for the 22/23 main crop, which is set to start toward the beginning of December, expect a slightly smaller harvest than the last season.
Activities at the port are running without any significant complications.

 

Tanzania

The new national census shows a 34% population growth in the last decade. Back in 2012, Tanzania counted 44.9 million people, and today more than 60 million are living in this country.
A bushfire has spread around Mt. Kilimanjaro. The Army is helping firefighters to tame the flames.
The harvest in northern Tanzania around Mt. Kilimanjaro, Arusha, and the Ngorongoro Crater is approaching its end. Only the higher altitude farms are still busy collecting cherries, while the medium and lower altitude farmers have already finished their picking activities.
Picking activities in the southern coffee regions around Mbeya, Mbinga, and Mbozi finished a week ago. The small washing stations are wrapping up their operations, and the last cherries are processed by smallholder farmers directly at home.
The falling international coffee prices have halted the local auctions for three consecutive weeks. Prices expected by farmers and intermediaries are not reflected in the international Arabica and Robusta prices. It will take some time until the new price levels are accepted. Only a tiny proportion of coffee is genuinely changing hands as the momentary price discrepancy between buyers and sellers is quite substantial.
No significant news coming from the port of Dar Es Salaam. So far, coffee movements are slow – but they are (at least) moving.

 

Rwanda

The Rwandan Government had installed an export tax on coffee, and now that money is being used to buy fertilizers that are being distributed among the coffee farmers.
So all farmers are busy preparing their coffee trees with fertilizers and doing basic maintenance work in the fields.
The falling international prices are hard to digest for exporters and cooperatives still holding stocks.
No major hiccups at the border between Rwanda and Tanzania. Logistics are running quite ok, and the primary constraint remains the availability of food-quality containers.

 

East African Coffee Production

 

General market situation:

Typhoons and Covid19-related lockdowns are slowing down operations at China's ports of Ningbo (the world's third-busiest container port) and Shenzhen. At the same time we hear China relaxing their very tight Covid policies. As a result several Chinese cities have stopped mass-testing while at the same time Covid-19 cases continue to rise. Is China giving up on their 0-Covid policy?

Climate change is heavily affecting our world. Particularly farmers producing our foods and drinks are facing adverse weather conditions. Coffee, being one of many agricultural products, is also fighting the rapidly degradation soil quality. We see flooding completely drowning soils and rivers drying out. Now, all eyes are on the COP27 UN Climate Summit in Sharm El Sheikh, Egypt hoping that over 40,000 visitors are able to produce tangible outcome and some degree of impact besides a enjoying nice ocean view with an occasional diving tour.

The coffee markets have undergone another week with volatile days reaching a new low on Thursday. The bearish trend continues. Additionally, over 300,000 bags are in the process of getting delivered to the ICE Arabica exchange. Funds have taken a net short position and there seems to be a lack of buying for the moment. This combination of these different factors brings the market to new fresh lows at 162.90 c/lb.

You can follow the principal market changes in the below table. We update it weekly.

 

Indonesia

The G20 Summit is taking place on the beautiful island of Bali. In this occasion US President Joe Biden and China's Xi Jinping met in person to discuss pressuring issues ranging from international trade to Taiwan. May a cool beer at the beach bring down the heated discussions.
The island of Sumatra, Indonesia's #1 coffee producing island, has started its harvesting activities. First deliveries to the dry-mills show good qualities and the volume of coffee being delivered is good.
Prices are falling almost inline with the international Arabica coffee market. Only differentials remain firm.
Dry-mills are starting their activities and we look forward to cup the first samples of the new season.
Activities at the port are unchanged. The major bottleneck remains the limited amount of food container availability.

 

Vietnam

The Robusta and Arabica harvest is in full swing in all coffee producing regions of Vietnam. Farmers are facing a true big harvest – particularly in Vietnams main coffee growing regions in the central highlands: Dak Lak, Gia Lai, Dak Nong, Lam Dong, and Kontum. Will they crack the 30 million bags mark? At least 15% of the crop has been collected so far.
Inflation and rising fertilizer and fuel costs make no exemption to Vietnam. This will surely affect the next harvesting cycle as farmers will have less cash available for buying (and applying) fertilizers.
Once the robusta beans are naturally dried, farmers use small hulling machines for preparing the coffee to be transported to the exporter's warehouses. Here they are prepared and selected and containerized for export.
The first coffee movements from the Central Highlands towards Hoh Chi Minh City are expected to take place towards mid December.
So far no major news are being reported from the port. This will surely change when the first containers are going to be shipped out of Vietnam into the world.

 

PNG

As we already informed in previous editions of this newsletter, PNG is the first coffee producing nation introducing a Minister for Coffee. Joe Kuli is a Minister of Parliament representing the Central Highlands and he will be the new Coffee Minister. Let's hope he brings the much needed drive to PNG's coffee sector.
Weather has been nice and warm over the last weeks and farmers are starting with some basic husbandry work on their fields. The harvest is completed and dry-mill operators are busy preparing coffee for export.
The port of Lae is running without any major complications bus similar to other ports in the world, finding food-grade containers remains the most significant challenge these days.

 

Asia Pacific Coffee Production

General market situation:

Another week with a downwards move in New York and London. Both, Arabica and Robusta prices continued their bearish trajectory while funds and speculators added new shorts on their positions.

We have to go back to early July 2021 to see similarly low levels and additionally the market has moved from "backwardation" to "contango"; meaning the future months are more expensive than the nearby months. Such a market move often comes along once a supply crunch has been solved. With good crop prospects in Brazil and Vietnam and with Colombia, Central America, and East Africa entering into their harvesting season, supply for the spot and nearby months looks assured. Global logistics are getting better, hence bringing more coffee to the consuming markets. Growing inflation and recession fears are dampening any expectations of growing customer demand.

Compared to last week the Arabica coffee prices have come down by 7.7%. The intra-week volatility remains quite high with a trading range of 17.40 c/lb.

You can follow the principal market changes in the below table. We update it weekly.

 

 

Brazil

The second round of the elections has taken on October 30th and brought along a clear – but very tight (50.8% of votes) - new winner between the two final contestants: Luiz Inácio Lula da Silva will be running Brazil's future for the next years. Besides some striking truckers it looks like the handover of power will occur peacefully and without any major complications.

The last four weeks have brought an excellent amount of rain and abundant sunshine in all coffee-producing regions. Soil humidity has been vastly restored and water reservoirs are filled again. The coffee trees look highly energized and odds for a strong 2023 harvest are high.

With the actual drop in international prices, trading activities within Brazil are coming to a standstill. Dry mills are running at full steam producing the coffee for export. Activities at the port are getting better. Main bottleneck remains the general shortage of adequate food containers for coffee.

 

Colombia

After some weeks of welcome sunshine, the Niña is coming back to Colombia's coffee fields with lots of rain. We have seen the effects of massive rains already in the past season. Not only is it difficult for farmers and farm workers to access the fields, but the trees and cherries start to suffer from too much water. The post-harvest processes become more challeging too, as sunshine and dry-weather conditions are needed to properly dry the parchment after it has been depulped, fermented and washed.

Weather forecast show extended rains deep into the end of this year.
Despite the rains, the harvest is progressing in all major coffee producing regions, from the Sierra Nevada de Santa Marta to Santander, Eje Cafetero (Caldas, Risaralda, Quindio), Antioquia, Tolima and Huila. Drying of the wet parchment remains a challenge.

 

Peru

After 2,5 years, the Covid-19 related lockdown has been finally lifted in all of Peru. If people were truly still sticking to the curfew, it must feel like kissing Sleeping Beauty awake – and this for a whole nation. But who believes in fairy tales?

Good rains have brought along a nice flowering and the trees are getting ready for the next 2023 crop. It is surely too early to make any robust statements on the size of the new harvest but so far the weather is helping. The falling international coffee prices have scared middlemen who were withholding coffee and deliveries to cooperatives and private exporter's dry mills have started to increase accordingly. This will surely help cooperatives and privates alike to get the needed coffees to fulfill their contractual commitments.

With the upcoming deliveries of parchment, dry-mills are running at full steam preparing coffee for export as we are entering in the busy season for the ports in Peru. Other commodities and fresh products will fight for the limited food container availability.

 

Coffee Production Estimates in South America

 

 

General market situation:

China has recorded the highest number of Covid-19 cases since the beginning of the pandemic. According to the country's 0-Covid policy, the Government has installed wide-ranging lockdowns in different areas around Beijing and other cities. As a natural consequence, the economy will slow down, and highly interwoven international supply chains will also take a toll. Activities at the ports will indeed become a new bottleneck.

We saw a short trading week as Thanksgiving festivities on Thursday kept the NY'C' market closed. Nonetheless, news on a smaller-than-expected crop in Brazil, Colombia, and Vietnam have pushed the market by 6%.

You can follow the principal market changes in the below table. We update it weekly.

 

Costa Rica, Guatemala, Honduras, and Nicaragua

The main washed-milds Arabica producer block, ranging from Mexico through Central America and parts of Colombia, started with the 22/23 harvest. Pickings in the lower-altitude regions are well underway, and so far, it looks pretty promising in terms of volume and quality.

All Central American countries are facing similar difficulties in finding workers. Farmers and cooperatives are organizing buses and trucks to pick up workers in the bigger towns as those pickers living in the rural areas are well booked. This is good for workers as they can ask for better pay. But for farmers, it equals a higher cost of production. This happens when international coffee prices are falling, so farmers, intermediaries, exporters, and cooperatives are very concerned. If local (internal) market prices are higher than international prices, trade comes to a standstill. Adding to this situation, global demand for conventional coffees is very shy for the time being.

Washing stations at the farm or more extensive cherry-buying posts are receiving coffee as nature does not pause due to commercial hiccups. Hence, cherries are depulped, fermented, washed, and finally dried. The harvest is expected to move into the first quarter of 2023 - particularly when considering the maturation process of the higher altitude coffees. No significant concerns are coming from the ports. Activities are running without any major complications.

On an short note: Nicaragua's President Ortega has just banned another 100 NGOs. The country continues to slide deeper into a completely authoritarian administration. President Ortega and the Vice-President (his wife!) are mainly responsible for this development.

The production forecasts for the new 22/23 season look encouraging:

 

General market situation:

A series of anti-lockdown demonstrations in multiple cities across China erupted after a fire killed ten people in Xinjiang's capital city of Urumqi. Covid-19 lockdown roadblocks obstructed the firefighters' access to the fire in time. Thanks to the protests, an easing of quarantine restrictions and a reduction of mass testing will occur now. Finally, this massive shift in China's rigorous 0-Covid policy has taken place and is expected to have a bullish impact on the country's economy.

On another bullish macro-note, inflation in the US is slowing down, and Jerome Powell, Chairman of the US Federal Reserve, has suggested moderate and slowing interest rate rises.

Volatility has come back to the international Arabica coffee prices. This past week brought a new four-week high at 1.74 c/lb for March 2023 (KCH23) before the closing on Friday, 1.5% lower at 162.60 c/lb. News on a smaller Brazilian and Colombian harvest forecast and some positive (or at least less bearish) macro-economic news had pushed prices higher. At the same time, Arabica ICE inventories continue to grow and have come a long way, from 382,695 bags (a 23-year low posted on November 3rd) to 609,267 bags as of last Friday. Additionally, reports show increasing coffee stocks in US and European warehouses. Volatility will potentially remain, as traditionally, at the end of the calendar year, bankers and hedge-fund managers decrease risks and cash-in profits for their year-end gratifications.

You can follow the principal market changes in the below table. We update it weekly.

 

 

Ethiopia

A month after the successful underwriting of the peace treaty between the Government and the Tigrayan Rebels (TPLF), 65% of the fighters withdrew from the front and returned to their camps. Still, aid workers complain as they can only reach a small percentage of needy people. The World Health Organization (WHO) cannot disburse medical aid as Eritrean troops and Ethiopian regional militias are blocking the way. This shows how multi-layered and complex this conflict is. Inflation continues to push the cost of living, and particularly prices for food and gas are on a substantial rise.

The harvest is progressing well in all major coffee-producing regions. The lower-altitude areas across the country are almost done with the crop. The medium- and higher-altitude parts are expected to enter into full swing towards mid-December. So far, quantity and quality of the 22/23 harvest look very promising.

Washing stations are operating at a very much slower pace when compared to previous seasons. The main reason is the mismatch between buying and selling price expectations. Farmers and akrabis (intermediaries) are not adjusting to the prices of this season, and farmers prefer to dry the coffee and keep it for selling at a later stage – hoping for similar prices as in 21/22. This is a potential trap, as falling international prices will continue to challenge price expectations. One thing looks almost certain: the bigger 22/23 harvest will surely bring along a higher natural-to-washed ratio.

 

Kenya

The main crop has started, and pickings are taking place all around Mt. Kenya. The quality looks promising, but dry weather during the previous months will yield a smaller harvest. Two more auctions will take place before the traditional Christmas break, and activities will restart in January 2023. Some scattered rains across all coffee regions are helping with the ripening of the cherries in the higher altitude regions of Nyeri, Kirinyaga, and Embu.

There is no significant news from the port of Mombasa. Activities are running without major complications.

 

Tanzania

Thanks to a joint effort of Tanzania's firefighters and military, the fires on top of Mt. Kilimanjaro have been finally extinguished. The Government has introduced a 5 USD/50KG tax levy on green coffee exports. This levy is causing administrative problems as producers and coops who export directly are now being billed by the Tanzanian Coffee Board with relatively high sums. The harvest is completed in the south and the north of the country. Dry mills are busy milling the coffee, but daily power cuts make the process slow and tedious. 

A general lack of rain has dried out the water reservoirs needed to power the hydroelectric plants to generate electricity. So far, the production of coffee for export is delayed, and shipments are not getting out in time. Good rains are expected for the upcoming weeks. They are more than needed and will bring some alleviation to the coffee trees, refill water reservoirs, and improve the power situation across the nation.

The general situation at the port of Dar Es Salaam remains relatively optimistic. All container vessels are fully booked for December.

 

Uganda

Mt. Elgon, in the east of Uganda and bordering Kenya, is bringing along good amounts of coffee as the harvest reaches its peak. Other regions, such as Rwenzori, in the northern part of the country, have already completed their harvest. All regions are reporting reasonable amounts of rain.

 

Rwanda

Local exporters and cooperatives are still looking at their stocks and praying for international coffee prices to reach higher levels. Their paid outright purchase prices were at a much higher level. Finally, some good rains have come to the coffee regions. They were badly needed as October resulted in a dryer-than-usual month. Farmers are working on their coffee fields and preparing for the upcoming harvest, expected to start towards the end of the first quarter in 2023.

Kigali is preparing to host the first AFCA meeting (African Fine Coffee Association) since 2019.

 

East African Coffee Production

 

 

General market situation:

According to a well-researched and internationally widely accepted study, coffee – among other commodities – unfortunately, contributes to deforestation. Cattle, cocoa, palm oil, soya, and wood are also significant contributors. As a part of the European Union's green new deal and intending to diminish deforestation, the EU has just formally approved a new law that will come into force as of 2023 with an 18-month transition period. This is a major game changer as commodities or goods produced with commodities driving deforestation will be import-banned. Focus countries for coffee will be Colombia, Honduras, and Peru. What does this mean for coffee imports into the EU? We will surely keep you posted during the following months, but we are all curious to read the new law, which has not yet been officially published to the public.

International coffee prices faced a relatively calm week without any significant changes. On a subtle note, the Arabica prices reached a new three-week low as further bearish news entered the market. The March-23 month closed 2.7% lower, settling at 158.15 c/lb. The past week has shown a narrow trading range of only 9.60 c/lb.

A positive outlook on the next Brazilian harvest and good export figures from Vietnam outweigh the bullish news of a smaller Colombian crop. Further, macroeconomic recession fears, continuing inflation, and falling energy prices are taking out price pressure from the commodity complex.

You can follow the principal market changes in the below table. We update it weekly.

Indonesia

Three weeks ago, a 5.6 magnitude earthquake heavily impacted western Java island killing over 46 people and injuring another 700. Two weeks later, thousands of residents in eastern Java were alarmed and partially evacuated as the island's tallest volcano erupted.

The rainy season has started in Sumatra, and the streets are partially flooded. Access to the coffee regions is a struggle. The harvesting season is reaching its peak, and drying coffee is becoming challenging. The excessive rains are pushing drying facilities toward their limits. Therefore the combination of falling prices and logistical constraints has brought local trading activities almost to a standstill. There is only a small amount of coffee being processed in the dry mills.

The following weeks should bring along more sunny and drier days.

Activities at the port of Belawan are running without any major constraints.

 

Vietnam

We are approaching the peak of the harvest in Vietnam's leading coffee-producing regions in the central highlands: Dak Lak, Gia Lai, Dak Nong, Lam Dong, and Kontum. Odds are high this season will crack the 30 million bags mark again. As we are moving towards the end of the year, farmers and traders alike start focusing on the upcoming Ted celebrations in January. Traditionally, Vietnamese coffee producers will sell a good portion of their harvest before the Tet celebrations as they need the cash.

The disrupted supply chains and very high fertilizer prices did not allow for the timely nutrition of the coffee trees. Additionally, some heavy rains during November hampered farmers from picking their coffees in time. Nonetheless, the amount of coffee traveling from the Central Highlands towards the dry mills in Hoh Chi Minh City is picking up.

The availability of food containers at the port and space on the ships looks positive.

 

PNG

The last weeks have been relatively slow and without significant coffee-related activities. Flowering is over, and cherries continue their natural maturation on the trees. A good amount of sunshine and scattered rains are beneficial for developing the new harvest expected to start in May.

Some parchment is still being delivered to dry mills, but the pace is substantially slower.

No major news coming from the port logistics – guess this is a good sign.

Asia Pacific Coffee Production

General market situation:

The US Federal Reserve and the European Central Bank have announced further interest rate increases – although at a slightly lower rate. Jerome Powell, head of the Fed, increased by 0.5%. Nonetheless, inflation is expected to stay at higher levels until the end of 2023. Further interest rate increases will surely be no surprise.

Another volatile week went by in New York with an ample trading range of almost 20 c/lb, closing at 164.40 c/lb on Friday. Initial signs of a potential shortage of Arabicas had pushed prices up by nearly 10 c/lb last Monday. But new reports from Brazil showing increased production forecast and substantial growth in exports during November have brought prices back lower. The International Coffee Organization has released fresh numbers suggesting a 1% to 2% global decrease in coffee consumption until 2030. All factors have a bearish character and might push prices lower.

You can follow the principal market changes in the below table. We update it weekly.

 

 

Brazil

Brazil's national agricultural supply surveying company CONAB forecasts a 6.7% increase in volume for the 2022 coffee harvest to 50.92 million bags of coffee. The primary growth comes from the Conilon (Canephora) sector, boosted by good weather conditions and increasing productivity.

December has brought along good rains across all major coffee-producing regions in Brazil. They are coming in timely as the new 23/24 harvest matures on the trees. And more good news for farmers: further rains are expected for the remainder of this month. Buyers and sellers are still apart from their price expectations; hence, little business has been going on lately. Dry mills are busy preparing coffee for export, and activities at the port run smoothly without significant interruptions.

 

Colombia

Roberto Velez, Director of Colombia's Nacional Coffee Federation (FNC), has resigned. This is a significant shift after seven years of leading this highly respected institution covering over 540,000 coffee farmers in all of Colombia.

Continuous rains harm the development of the actual harvest. This is also reflected in lower exports. November 2022 reveals a 6% drop (0.85 million bags) compared to the same month last year (1.14 million bags). Farmers with bigger plots of land are facing challenging times as finding pickers has become a significant challenge. The ports of Buenaventura, Cartagena, and Santa Marta are fully operational. Finding adequate food containers remains the main challenge.

 

Peru

Survival in Peru's political classes remains a true challenge. (Former) President Pedro Castillo was thrown out of power and arrested earlier this month after trying to illegally dissolve Congress. He is now looking for political asylum. A national state of emergency has been declared by the now-new President (and former Vice-President) Dina Boluarte. New general elections are expected to be coming soon.

Moving coffee within the country is challenging as the police and military forces are blocking roads and reinforcing the lockdown. Dry mills continue their operations, but there are delays as logistics for moving coffee to the port are hampered by protestors and roadblocks.

 

Coffee Production Estimates in South America

 

 

General market situation:

The very well-welcomed tranquility between Christmas and New Year's Eve is always a good time to reflect on the last twelve months. We saw a year full of surprises and unexpected twists:
February 24th became a shock to all when Putin invaded Ukraine calling this unprovoked action a "special military operation". This military assault on a sovereign nation was a horrifying and defining affair in 2022. While Putin sits in a warm and cozy Kreml, tens of thousands of soldiers (Ukrainians and Russians alike) and over 40,000 civilians have died. Ukraine, a global producer of grains, has been massively affected by the destruction of critical infrastructure and the constant shelling of key cities and ports. Under war conditions, exporting food commodities and fertilizers is slow and tedious. Besides the humanitarian catastrophe, the country is facing enormous economic challenges. This completely nonsense aggression is sending shockwaves across the world.

Russia's invasion and the therethrough imposed economic sanctions from the Western economies have sent prices for energy across the world through the roof. Putin's intention to extort highly energy-depending European countries has not worked out. The main effect, though, is ramping global inflation. Prices for food, transportation, production, heating, etc., have seen uncontrolled price boosts.
In an attempt to tame inflation, the US Federal Reserve, the European Central Bank, and the Bank of England have continuously increased interest rates.

The United States and China continue their dispute over the world's leadership, and while Xi Jinping has further concentrated his grip on power, Covid-19 has struck back at China. The strict 0-Covid policy has been taken down as tumultuous protests took place on the streets, leading to a rampant increase of infections across the country's population.

Climate change is an ongoing topic, and unfortunately, further propelling natural calamities. Flooding, bushfire, and drought will be part of our global future "new reality". In an almost desperate attempt to mitigate the situation, the European national governments and the European Union have released a series of rules and regulations entering into practice this year. The laws include the German Lieferkettensorgfaltspflichtengesetz (nice jawbreaker) and the European Due Diligence on Deforestation.

All this has had an impact on coffee production and prices. The NYC Arabica Coffee price chart of the last 24 months reflects global volatility. It includes natural calamities such as the frost in Brazil (July 2021), demand and supply misbalances, and distressed global supply chains.

Source: barchart.com

International coffee prices for Arabica have been meandering in a 20 c/lb corridor between 155 and 175 c/lb for the last ten weeks. News reflecting higher production in Brazil and Vietnam are pushing the prices lower, and sudden reports on a smaller and delayed crop in Central America and climatic concerns and their effects on the coffee production in Colombia move the prices back up the board. The week closed on Friday at 167.30 c/lb, and the market remains closed today.

You can follow the principal market changes in the below table. We update it weekly.

Central America

The harvest in Central America is progressing well. Weather has been benevolent in most coffee-producing regions facilitating the collection of red and ripe cherries.

The primary constraint remains to find coffee pickers. The short Christmas break and festivities will surely help as friends and family usually return to the rural areas and will help with the picking activities. Warehouses are receiving parchment deliveries, and dry mills are running at full steam. First exports of lower altitude coffee have taken place, and so far, quality and quantity look pretty good.

No major news from the ports (for now).

Coffee production estimates in Central America:

 

General market situation:

30°C – this is not the pleasant temperature on a Caribbean island during the holiday season, but the difference between the coldest (-14°C) and the hottest (+16°C) days during December in Germany. In many European countries, a very hot winter follows a historically hot and dry summer. It looks like several ski resorts in the Alpes are under severe climate change threats. Meteorologists are ringing the alarm bell and calling these extremely hot weather patterns "truly unprecedented in modern records". The first days in January are the hottest days recorded during this month... Guess this new year will bring along more cold-brew coffee than ever!

The global macroeconomic picture continues on a negative tone. Inflation and rising interest rates are known for long-term recessive connotations. Worldwide economists have a general consensus that the next 12 months will bring slower-than-expected economic development. Putin's invasion of Ukraine, climate change and rising natural calamities, and China's struggle with exponentially growing Corona cases after relaxing their strict 0-Covid policy.

And also, for coffee, the new year starts with a slightly bearish tone. International Arabica prices fell by 5.4% on the week-to-week comparison, closing at 158.30 c/lb on Friday. The latest export statistics of the International Coffee Organization (ICO) for November 2022 (10.24 million bags) reveal a 9% increase in exports compared to the same month in 2021 (9.38 million bags).

The certified Arabica stocks – those stocks tendered to the Arabica futures market – have recovered well from their historic lows and remain almost unchanged at around 813,000 bags. Most coffee origins, except for Brazil, Peru, and some Eastern African countries, are harvesting coffee now, and besides some isolated cases, the 22/23 crop looks positive in terms of volume and quality.

All this is putting additional pressure on international coffee prices. Take a look at the principal market changes in the below table. We update it weekly.

 

Ethiopia

Merry Christmas! Ethiopia celebrated its Orthodox Christmas over the weekend.

The ceasefire agreement between the National Government and the rebel forces in Tigray (TPLF) is reinforced by both parties. Finally, after two years of war and a horrible humanitarian crisis, peace can be re-established, and food, medical supplies, and further badly needed aid can reach the Tigray region bringing long-awaited relief to the population.

Most coffee regions within Ethiopia report sunny and dry days. This is undoubtedly helping during harvest time. In the southwest, the harvest is almost complete. In the Yirgacheffe and Sidama regions, some cherries are still waiting to be collected. What indeed remains a conundrum is the internal pricing situation. In the interior, Akrabis (middlemen) are paying extremely high prices – higher than those achievable when exporting coffee. Even when prices are adjusted to inflation and considering the weakening Birr (local currency) to the US-Dollar, the actual pricing remains a mystery. Hence little volume is changing hands.

There is a similar picture in all coffee-producing regions: washing stations are either closed or just used for drying cherries, or, when operational, then only half of the soaking tanks are being used. This will undoubtedly result in a small amount of washed coffees and a good volume of naturals. Hope remains that after the Christmas break, prices will ease in conformity with international coffee markets.

 

Kenya

The highly indebted country is looking for cheaper financing alternatives and moving away from commercial banks towards more economical sources such as the World Bank. President William Ruto assured the government would not default on its debt and would start collecting more taxes.

Abundant sunshine is helping as farmers collect the main crop. Washing stations are running at total capacity, and the first parchment deliveries are reaching the dry mills. The auction will reassume activities on Tuesday after the traditional Christmas and Year-End break.

Quality is expected to be good – we look forward to cupping the first samples of the Mt. Kenya blackberry flavor bombs.

 

Tanzania

The auction has reassumed its first session after the Season's Break, but no significant transactions are taking place as the price expectations of farmers to those offered at the auction do not match.

While good rains in southern Tanzania foster the maturation cycle of the coffee beans, the north remains a tad dryer. But, generally speaking, the water shortage persists, reservoirs are not filling up, and power cuts continue slowing operations at the dry mills. Production of coffee for export is slow. Famers work on their plots and prepare the coffee trees for the next harvest.

Operations at the port of Dar es Salaam are running without any significant interruptions.

 

Rwanda

Kigali will host the next AFCA – the African Fine Coffee Association Conference – starting on February 14. The African coffee community is getting ready to meet there again after two years of recession.

Weather has been good for the development of the new 2023 harvest, which is expected to start towards the end of February or early March.

 

East African Coffee Production

 

 

General market situation:

China has wholly dropped traveling restrictions and herewith encouraging a travel rush. People rush to see friends and family relatives after almost three years of a rigorous "0-Covid" strategy. This will undoubtedly continue to spread the virus among its population. The peak of the Corona wave is expected in two to three weeks, and epidemiologists are concerned about the risk of the virus spreading among the vast Chinese countryside where medical resources are low.

Despite all these amenities, the port of Shanghai ranked #1 as the world's busiest port for the 13th consecutive year. As China grapples with the ongoing pandemic, other pressing issues, such as climate change and economic instability, remain at the forefront of global news. In the US, tornadoes heavily affected Alabama, killing at least nine people, and the Salinas River is flooding parts of San Francisco. According to the US National Weather Service, the excessive rains in California are expected to last during the following days. Over 19 people have died already.

International Arabica coffee prices hit a new 20-month low on Wednesday (152,05 c/lb). This is the lowest level since May 2021. Good weather forecasts in Brazil encourage the maturation (and expectation) of a decent crop in Brazil. Additionally, macroeconomic drivers are strengthening the US-Dollar, and this factor often correlates with a price drop in the futures traded commodity sector. Towards the end of the week, prices slightly recovered, closing at 151,70 c/lb.

You can follow the principal market changes in the below table. We update it weekly.

Indonesia

Indonesia is the fourth largest coffee producer in the world, with coffee being one of the country's main export crops. The majority of coffee grown in Indonesia is Canephora (aka Robusta), with approx. 10 mil bags. It is primarily used for instant coffee production and other coffee blends. The country is also a producer of Arabica coffee (about 1.3 mil bags).

And the Arabica harvest on the island of Sumatra is just over. The last weeks have brought along persistent rains, continuously delaying the drying of coffee. According to weather forecasts, the following weeks are expected to bring more sunshine. The Robusta beans are maturing on the trees and getting ready for their harvest, expected to start towards the end of March/beginning of April.

Activities at the port are running quite ok. The only bottleneck remains in finding adequate food containers for coffee transportation.

 

India

The harvest is progressing well in India. Both – Arabica and Canephora (aka Robusta) alike – are benefitting from the good weather conditions. The Arabica harvesting activities are almost finished, and Robusta will go on until the end of March. The 22/23 harvest for Arabica is expected to bring along 1.4 mil bags and Robusta 4.4 mil bags. The amount of washed Robustas is always a true challenge to estimate as it depends on various factors, including - for sure - the prices for natural Robustas. Farmers try to produce washed Robustas to lock in the premium when prices are moving at the lower range. But liquidity, production capacity, demand, and climatic conditions also alter this estimation (between 500.000 and 600.000 bags).
No major news from the port.

 

Vietnam

Vietnam and the European Union have just signed a free trade agreement (EVFTA). This new deal will enable Vietnam to ship processed coffee with lower import duties into the EU, among other trade benefits.

Everybody is getting ready for the Lunar New Year celebrations. On January 22nd, the Year of the Tiger will be over, and the Year of the Cat will start.

The harvest is progressing well in the Vietnamese Central Highlands. This season the main coffee-producing regions of Dak Lak, Gia Lai, Dak Nong, Lam Dong, and Kontum are expected to produce about 29.5 mil bags of Robusta coffee. Farmers are busy picking coffee before the beginning of the festivities. The internal pricing situation remains challenging as farmers' expectations do not match international buyers' requirements. But some transactions have taken place to get some cash for the Year-End celebrations. The dry-mill operations in Hoh-Chi-Minh City are running at total capacity, and activities at the port run smoothly.

 

PNG

Not much going on coffee-wise in PNG these days.

 

Asia Pacific Coffee Production

General market situation:

According to the financial bosses at this year's World Economic Forum in Davos, the global outlook appears to be rosier than expected despite inflation and other economic woes. Some uncertainties are ahead, such as China's potential Covid crisis that may arise once people leave their cities to visit family in rural and remote areas for the Lunar New Year festivities. Additionally, the ongoing war between Russia and Ukraine continues to rumble on and can't be overlooked when assessing the global climate for inflation or market uncertainty. A cautiously optimistic economic outlook presents itself in a turmoil of crisis scenarios ranging from natural calamities to unsettling developments in Eastern Europe and a massive power struggle between the USA and China.

The prices for natural gas in Europe and the US have fallen back to levels before Russia's invasion of Ukraine. This reflects a global trend for all major commodities, and coffee is no exception.

Nonetheless, last week has been quite positive for the Arabica coffee market as prices started to recover after a massive sell-off. Prices increased steadily during most trading days of the week, starting at 151.70 c/lb and closing Friday at 154.80 c/lb. This is a 2% increase in week-on-week comparison. It is nothing uncommon to see price volatility ahead of Brazil's harvest. The world's biggest Arabica and second-largest Robusta producer is central to international coffee prices. The saying goes: when Brazil sneezes, the rest of the (coffee-)world gets a cold. We expect continuing volatility in the following months ahead of us.

You can follow the principal market changes in the below table. We update it weekly.

 

 

Brazil

Two weeks ago, supporters of former President Bolsonaro stormed Brazil's Presidential Palace, Congress, and Supreme Court in Brasilia in pure vandalism. This happened while Bolsonaro was visiting Florida in the US and made us all remember the scenes of January 6, 2021, when Trump supporters attacked the US Capitol. Meanwhile, everything has been restored, and the new President, Luis Ignacio Lula da Silva, has been sworn into power.

Different statistical units and governmental agencies are currently reviewing the production forecasts for the upcoming 23/24 harvest. On the one hand, Conab, Brazil's agricultural agency, is forecasting a total of 54.9 mil bags (37.4 mil bags Arabica and 17.5 mil bags Conilon). On the other hand, exporters' and traders' statistical units estimate higher numbers – ranging around 60 mil bags (40 mil bags Arabica and 20 mil bags Robusta). This delta or "estimation error" has the size of the whole Honduras harvest!

A cold weather front brings abundant rains to Brazil's coffee-growing regions in Cerrado, Sul de Minas, and Zona da Mata. Further rains are expected during the next week in the Mogiana regions. There is an ongoing mismatch between the seller's and buyer's price expectations. The few offers on the table are considered very expensive, and volume remains on the low end. Little business is materializing. Logistics are running quite well for this time of the year. There is enough space on the vessels, and freight rates are slowly starting to decrease.

Colombia

The economy in Colombia is expected to slow down during 2023. A 13% inflation rate in December 2022 and a depreciation of the local currency of 25% substantially increase the cost of living and are shying away investors.

Additionally, the extremely rainy weather patterns turn agriculture into a true challenge. This, for sure, also applies to coffee. La Niña is affecting coffee production directly. The Federacion Nacional de Cafeteros de Colombia (FNC) has released monthly production numbers showing a falling production from January to December 2022: 11.1 million bags. This is the lowest production since 2013. Nonetheless, the last weeks have brought along some sunny days helping to finish the last bits and pieces of this main crop harvest.

Dry mills are fully operational, producing coffee for export, and activities at the port are not reporting any significant problems.

 

Peru

It looks like Peru is unable to stabilize its political situation. Ex-President Pedro Castillo, who tried to dissolve Congress to prevent an impeachment process on himself, has been jailed. This pushed thousands of supporters onto the streets, clashing against police forces. In an attempt to restore order, a new curfew was installed by interim President Dina Boluarte on January 15. More than 40 people died.

Little coffee-related news to report from Peru these days. Good weather is helping cherries to mature on the trees in all coffee-producing regions.

 

Coffee Production Estimates in South America

 

 

General market situation:

The last seven days saw a flurry of worldwide political, economic, and environmental news.

The United States Federal Reserve will decide on a further interest increase. The intriguing question remains if this upcoming decision shall bring along a 25, 50, or 75 basis points increase. Some financial reports of key US tech companies will be released later this week. Expectations are pretty negative, as tech companies and banks alike have been laying-off and downsizing their workforce. Is the recession becoming noticeable here?

In Europe, the first monthly statistics of the year reveal a slightly optimistic January as business activities are developing better than expected. The main driver appears to be the falling energy prices. This will indeed have a positive impact on the economic outlook.

The US and German governments agreed to deliver tanks as we enter the 12th month of the Russian invasion of Ukraine. Volodymyr Zelenskiy has fired more than a dozen of his closest government officials as scandals and corruption allegations couldn't be overheard anymore.

People are returning to their everyday life after the Lunar New Year Celebrations, and, to everybody's astonishment, Covid-19 infection numbers are likely starting to come down in China.

During the past two and a half weeks, coffee prices only saw one direction: upwards! This extensive rally has brought international Arabica prices for the corresponding spot months from a low of 142.05 c/lb (January 11) to a high of 170.15 c/lb (January 27). Robusta prices have also seen a consequent upside move from 1,762 USD/MT on January 11 to new highs of 2,020 USD/MT on Friday.

A series of reports from multinational trade houses and governmental agencies from Brazil and Indonesia showcase a smaller-than-expected crop. This will add to the tight supply-demand deficit, and fears of a coffee shortage are pushing coffee prices back up again. The general nervousness of the market remains inherent and similar to past situations, price volatility will be a constant companion over the following months.

You can follow the principal market changes in the below table. We update it weekly.

Central America

The harvest is progressing well in Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. In the low- and mid-altitude regions, pickers are almost done with their work. The higher altitude parts are in the middle of the harvesting activities. The main challenge remains in finding enough coffee pickers. We have seen a series of reports all showing a similar picture: people are leaving rural areas towards the bigger cities and the US border. This phenomenon affects harvesting activities and other services such as logistics and wet- and dry-mill operations alike. Nonetheless, sunny and dry weather is helping during the washing and drying processes at the washing stations. Dried parchment flows from the mountains to the warehouses, where the green beans are meticulously selected for export.

The rally in New York motivated coffee sellers in origin, and some transactions took place. Coyotes (intermediaries) can lock in better prices and release the coffee to exporters. Operations at the ports are running without any significant problems. The first arrivals of the new harvest are reaching their destination, and the cupping results look excellent.

Coffee production estimates in Central America:

 

 Ethiopia

With a yearly inflation rate of over 30% and a highly controversial forex rate kept artificially stable at around 56 BIRR/USD, it is no surprise that the Central Bank's General Director has just been replaced. The armed conflict between the Ethiopian military and the TPLF rebels in Tigray has considerably harmed the country's economy. War is expensive. The living costs, particularly for food and fuel, are pushing a lot of pressure on the local population. Ethiopia's President is fully aware of this situation and is therefore personally conducting further peace talks with the TPLF forces, and both parties are on good terms for fostering the peace treaty.

There was minimal coffee movement in the last weeks as the high-priced past- and also new-crop coffees were not finding a home in the international markets. The Coffee & Tea Authority (CTA) has recognized this situation and (finally) lowered the minimum prices for past-crop coffees. This brought along some new business, but the problem remains almost unchanged when looking at the new harvest. There is simply a limited demand for very high prices. Farmers are producing natural coffees as wet-mill owners, and Akrabis (middlemen) were not opening their washing stations or running them at half-capacity. Therefore we further expect to see firm prices for washed coffees, but - as crop size is expected to be relatively decent – it would not be surprising to see an overflow of natural coffees coming into the market at a later stage. But of course, many other factors also influence as well...

The tail of the harvest has been collected now also in the higher altitude regions in the south (Sidama, Yirgacheffe, and Guji) of Ethiopia. New crop samples are reaching our office, but we still await the truly top qualities. The dry mills in Addis are fully operational, but the delivered volumes could be better. Warehouses of some exporters are still pretty packed with past-crop coffees.

So far, no major news is coming from the port of Djibouti. Coffee volume could be higher, and there is sufficient availability of food-grade containers.

 

Kenya

The nice coffees from Central Kenya – the regions around Mt. Kenya like Nyeri, Kirinyaga, Embu, and Meru – are starting to emerge at the auction and hopefully soon on our cupping table. The auctioned volume is picking up along with the season, and better coffees are appearing. 

Weather conditions have been very propitious for the development of the main crop. Additionally, high international coffee prices allowed farmers to cash in good money over the last two seasons. They have invested in it, renewed their farms, and applied fertilizers following good agricultural practices, reflecting in a bigger crop. Nonetheless, the bean size of this new main harvest has shrunk, bringing along more AB and fewer AA beans. 

Dry mills are busy processing parchment through their machines and preparing green coffee for export. 

Activities at the port of Mombasa are running without any significant concerns. 

 

Tanzania

Remember the fantastic movie called Groundhog Day? This 1993 film comedy with Bill Murray and Andie MacDowell features them experiencing the same day, February 2, as a déjà vu. A similar situation is being faced in Tanzania’s coffee world. The Minister for Agriculture Hussein Bashe has just announced that the coffee trading system will be reviewed. A team of experts is on a mission to the southern highlands to start the reviewing process and will surely come up with a new idea on how to (re-)fix a system that the authorities just set a couple of years ago. 

The coffee trees have fixed the new pinheads; in some regions, the first coffee cherries are forming gently on the coffee tree branches. Weather conditions are very good – both in the north and the south of Tanzania. Farmers do their basic tree and field husbandry work, and the rest of the work is done by mother nature. 

Dry mills are busy milling and preparing the coffee for export. 

The port of Dar es Salaam is facing some delays as the port management authorities have changed hands, and the new management is settling into the new job. This will surely get better in the following months. 

 

Rwanda

There is increasing tension between Rwanda and the Democratic Republic of Congo. Leaders from the Southern African Bloc of Nations (SADC) will discuss possibilities to de-escalate the situation between the neighboring nations. 

The coffee community is getting ready for the yearly AFCA convention in Kigali from February 15 to 17th. This will be the first AFCA after two years of a Covid-19-related rest period. 

The national coffee authority NAEB has lowered the prices for cherries for this upcoming season to be more in sync with international coffee prices for Arabica in New York. There are different expectations towards the NAEB to see another drop in prices towards mid-February – just when the harvest is expected to slowly begin. The washing stations are getting ready for the new season. After a lengthy off-season, the drying tables are put in place, and soaking tanks and water channels are prepared for receiving the first cherries of the new 2023 harvest. 

Weather conditions have been optimal, so we expect to see nice qualities on our cupping tables in the following months.  

 

 

 

General market situation:

As we approach the yearly anniversary of Putin's military invasion of Ukraine, tolling thousands of dead soldiers and civilians and destroying millions of people's homes, global leaders gather around the Munich Security Conference in southern Germany. The Western Nations demonstrate their close commitment to continue supporting Ukraine and accuse Russia's brutal and unprovoked invasion as a crime against humanity. US President Joe Biden is actually visiting President Wolodymyr Zelenskiy in Kyiv.

Inflation in the US dipped slightly from 6.5% in December to 6.4% in January. Nonetheless, prices for food and energy continued their steady growth encouraging that further interest rate hikes will continue to be on the agenda of the Federal Reserve. A relatively strong and robust job market and a continued steady consumption suggest that increasing interest rates still need to bring along the desired cooling of the economy. In Europe and the UK, a similar development is taking place. Further monetary measures and increasing interest rates by the European Central Bank and the Bank of England are expected.

International Arabica coffee prices have reached a new 3.5 months-high at 186.85 c/lb and closed the week at 185.75 c/lb. A strong rally pushed the market higher on Friday. A series of reports forecasting the coffee harvest in Brazil have been released lately, and their common denominator is a smaller-than-anticipated 23/24 harvest. Additionally, excessive rains in some parts of Brazil are spiking fears of further damage to the harvest. Export numbers from Colombia and also Vietnam are showing comparatively lower figures. This could all be used to explain the bullish move, but it wouldn't surprise to see this up move pushing prices back to lower levels. Bulls and bears fight their way through the coffee market, bringing more volatility in the following weeks. The NYC will remain closed today (US Presidents Day).

You can follow the principal market changes in the below table. We update it weekly.

 

 

Brazil

While incoming President Lula da Silva is touring the USA, embarking on a series of bilateral foreign policy meetings, his predecessor, ex-President Jair Bolsonaro, who had retreated to Florida to lick his wounds after losing his re-election, is announcing his comeback to Brazil to lead a "right-wing movement" in March.

All eyes focus on several statistical reports covering the crop forecast of the upcoming Brazilian coffee harvest, expected to start towards mid-April. These crop outlooks always carry a tactical or political connotation, and it is no surprise that governmental agencies (such as CONAB) constantly report smaller numbers than private exporters. The general consensus remains that this upcoming harvest will be bigger than the last. The genuinely puzzling part of the statistics is the difference when looking at the numbers from CONAB and those coming from private exporters. Depending on the chosen private exporter's numbers, the delta ranges between 8 and 19 million bags...

Sellers' asking prices are still not matching buyers' expectations. Exporters in need to fulfill nearby contracts have to "eat" the higher prices, but in general terms, little business is going on.

So far, there have been continuous and consistent rains among all significant coffee-producing regions. Flooding and mudslides are being reported in the states of Sao Paulo and Minas Gerais. Coffee cherries are in their final maturation stage. The beginning of the Arabica harvest is expected to start towards the mid/end of April, and the Conilon harvest will begin in the following weeks.

Activities at the port of Santos are returning to normal. There are enough food containers available and - with proper planning – bookings are running quite smoothly.

Colombia

After an astonishing loss of 120 million USD, Colombian authorities are investigating the Federación Nacional de Cafeteros (FNC). Roberto Velez, who was leading the FNC then, was forced out of office. Further investigations hopefully will bring along some light into this shadow.

Rain has become Colombia's main coffee-producing region's new default weather pattern. The heavy rains have damaged roads and infrastructure and delayed the start of the harvesting season. But fortunately, the latest weather forecasts promise some sunny and dry days ahead. At the same time, the coffee regions in central and southern Colombia (south Antioquia, Manizales, Risaralda, Quindío, Cundinamarca Tolima, Huila, Cauca, Valle del Cauca, and Nariño are getting ready for the harvest season.

Dry mills are busy milling the last arrivals of parchment and preparing the coffee for export.

Activities at the ports of Buenaventura, Cartagena, and Santa Marta look all right, and there are no significant issues to be reported.

 

Peru

Ex-President Pedro Castillo, who has been arrested after trying to dissolve Congress to prevent his impeachment over corruption, will face a formal judicial trial. In the meantime, his vice-president, Dina Boluarte, has stepped in as the replacement President, and new elections will take place in April 2024 – instead of 2026. The past weeks have been bringing along the worst political unrest for decades. Roadblocks and riots have put the country in a terrible situation. Over 50 people have died in the aggressive clashes between protesting civilians and the police forces.

The weather conditions have been benevolent for the maturation stage of the coffee cherries. The beginning of the harvest is expected to start towards early April – at least in the lower altitude regions.

Most dry mills have finished their activities, are doing some maintenance and repair to their machines and equipment, and are getting ready for the upcoming harvesting season.

Roadblocks are not letting trucks transit freely toward the port. However, there are no significant delays at the port for those capable of circumnavigating around the blockades.

 

Coffee Production Estimates in South America

 

 

General market situation:

Putin's brutal invasion of Ukraine has been going on for over twelve months now, and despite some formal meetings of delegates from different nations, peace seems to be still far from realistic. While Ukrainian forces are repelling invaders on the eastern front line, Russia threatens to use nuclear weapons. Joe Biden's spontaneous visit to Ukraine and Poland ensures the continued support of the USA and NATO to the region and the NATO members. But also Putin was speaking to his Russian audience and paid up to 7 USD and handed free merch to attract enough people to fill the stadium in Moscow.

The plans of the US Federal Reserve to continue raising the interest rates resulted in a bearish week for stocks. Investors are worried about the Fed's total commitment to cool inflation with further hikes. Standard & Poors and other international indices took a severe beating during the last week.

On the other hand, international coffee prices had a very bullish week. On Wednesday, Arabica prices reached a new 4-1/4 months high at 194.15 c/lb. Farmers and intermediaries are still unwilling to release coffee at actual market prices. The week closed on a moderate note, trading at 187.70 c/lb, only 1% higher on a week-to-week comparison. Both spot inventories in countries of consumption and ICE stocks are becoming an increasingly interesting alternative for roasters. There is enough coverage for roasters in US and European warehouses for the following months. Who will give in first? It looks like producing countries are still enjoying the 2-year honeymoon mood and don't want to realize that the end of the vacation might be approaching sooner than expected.

Follow the principal market changes in the table below. We update it weekly.

Central America

The harvest is progressing well in all Central American coffee-producing countries. The lower and mid-altitude regions are fully harvested, while coffee pickers are still harvesting in the higher-altitude areas. Finding coffee pickers has turned into an expensive exercise. Farmers pay far above minimum wages to motivate people to work in their fields. The exodus from the rural areas towards bigger cities or the US continues to be a local reality. Growing inflation and Russia's invasion of Ukraine also pushed prices for fertilizers and fuel to new record highs. As less fertilizer has been applied, much guesswork is rumoring around the market on the amount of coffee produced. Additionally, export numbers look comparatively lower than last season. But this shouldn't be a real surprise as the previous season saw Covid-related delays in shipments artificially inflating export numbers towards the last quarter of 2021 / first quarter of 2022, overlapping with shipments of the new harvest.

Please see our adjusted number for the actual harvest:

 

Prices in the internal markets remain very high, and little business is being reported. Those transactions happening look expensive. Warehouses are full of parchment, and exporters and cooperatives receive parchment, mill, grade, and prepare green coffee for export.

The sample room is filling up with lovely coffees from all Central American countries and putting a big smile on the cuppers in the lab.

Protesters in Guatemala have blocked roads and stopped transit to the ports and El Salvador. Meanwhile, the roadblocks got lifted, and trucks are passing again.

Activities in all major ports are running without significant complications. Finding adequate food containers remains a challenge, though.

General market situation:

It's tempting to believe the high inflation tormenting global economies for the last 18 months is being tamed by now. But Central Bankers – particularly those in the Federal Reserve - are unconvinced with the actual economic performance indicators. The economy is not cooling down; consumption is still high, and the unemployment rate is extremely low. Unfortunately, the inflation genie is unwilling to enter its bottle, and it looks like it will stay among us for a bit longer. A continuous interest rate rise will be the likeliest consequence.

Fresh reports show increasing export numbers from Central America and easing rains in Brazil. Both factors have pushed Arabica prices lower, retracing back from their latest highs on Tuesday (189.85 c/lb) and falling back to a 2-week low, closing the week at 177.85 c/lb – a 5.2% price decline on a week-on-week comparison. This is happening at a time when multinational trading companies are buying certified coffee stocks from the ICE exchange and delivering it to industry roasters. The market usually reads this behavior as bullish news, so we wouldn't be surprised to see NYC returning to recent highs. Volatility seems to be the only constant in this trading environment.

Take a look at the principal market changes in the below table. We update it weekly.

 

Ethiopia

A perfect storm is brewing in the Ethiopian coffee cup, and the arising problem is multi-layered and complex. The war in the northern part of Ethiopia between the Tigrayan Rebels (TPLF) and the Government is fortunately appeased now. Still, the damage is done: many innocent people died, famine and migration were a consequence, and the national economy took a hard hit. The Government constantly needs USD to finance its debt; coffee is a well-known contributor. Consultants projected the USD income from coffee sales to the Government – but the numbers were based on last season's market levels trading around 240 c/lb. Hence, the Coffee and Tea Authority based the minimum prices on a historical/theoretical market level and not on the actual prices. This has created a heavy market distortion. Farmers and Akrabis (middlemen) are unwilling to release coffee at the international pricing levels, as their calculation appears to be based on the minimum market prices. But even considering minimum prices, the internal market is trading at much higher levels anyway. The result is quite obvious: exporters only cover on a back-to-back logic and are not willing to "go long" and take a position at the actual internal prices. International buyers – well-known major coffee brands – have reached out to the Coffee and Tea Authority, notifying them that actual prices are too high – particularly when compared to other origins and turning away from Ethiopia as they cannot absorb the existing price configuration.

Akrabis and vertically integrated exporters (those who own washing stations) have significantly reduced the amount of washed coffee production. Some washing stations did not open, and others only operated at half capacity. But the overall crop size looked good in terms of quality and volume. According to this ratio, farmers will likely dry coffee (naturals) and keep it as an alternative saving currency. They will sell when prices fit their expectations or when they need cash. Akrabis who bought coffees at record high internal prices is sitting on the "hot potato". If international coffee prices return to levels around 220 c/lb and above, then Akrabis will have a pricing basis to release coffee without a loss. Otherwise, they will be in massive trouble and likely face severe financial distress.

The export and production numbers reflect this reality: not much coffee is being shipped, and only now parchment and natural coffees are starting to reach Addis Ababa. We expect to have a delayed Ethiopia season, and contrary to a more flexible exporting and trading business, coffee trees have flowered. Already in eight months from now, the new 23/24 harvest will start to bear fruits. This will bring additional volume to the market putting more pressure on the internal pricing situation.

Until then, we hope the national political environment stays under control. Further destabilizing activities from rebel groups will surely not make the situation any easier.

Kenya

The harvest is completed, and it looks good in terms of quality and volume. Auctions are bringing along consistent volume, and the first cupping rounds in our lab put big smiles on the cupper's faces.

The parchment is reaching the dry mills, and they are running at full capacity, carefully preparing coffee for export.

Activities at the port of Mombasa are running considerably well.

Tanzania

The next harvest is getting ready on the coffee trees in the northern parts around Mt. Kilimanjaro and in the southern plateaus around Mbozi, Mbeya, and Mbinga. Flowering has set in, and now it's all about the fixation ratio of buds that shall become future coffee cherries. Weather conditions are very supportive; there is abundant sunshine and rain.

The last bits and pieces of the actual 22/23 harvest are being milled. The better qualities are on their way or have already been shipped.

No major news coming from the port of Dar es Salaam.

Rwanda

The African Fine Coffee Association (AFCA) conference took place in Kigali and was a true success. This is the first regional get-together since February 2020, and everybody was very keen to meet and talk coffee. The conference and side events were very well attended, and the location at the Kigali Convention Center proved to be a true gem for such a convention. Thanks, Rwanda and AFCA team, for making this possible, and looking forward to the next AFCA in Addis Ababa next February 2024.

The season is slowly starting. Washing stations are ramping up their activities, preparing to receive cherries, and processing them to parchment.

Coffee trees carry a good amount of coffee cherries, and the rains in the following weeks will help complete the maturation cycle.

East African Coffee Production

 

 

General market situation:

Turbulence and shaky moves are happening simultaneously, not only in the skies but also on the markets. But first things first: research has shown that due to climate change, atmospheric air currents are more unstable, and winds have become faster. Another relatively new phenomenon is clear-air turbulence, which appears quite spontaneously, taking pilots by surprise. A transatlantic Lufthansa flight counted over seven injured passengers, and other air carriers report similar surprising air bumps. Better keep your seatbelts fastened!

But now to the markets: it appears as if Jerome Powell, the US Federal Reserve's chairman, has a similar effect on the financial markets as climate change has on flight passengers. Financial markets inhale news in an eye-glimpse, and Powell's statement gave clues on a continuous hawkish interest rate policy. This could lead to another hike of 0.50 points, usually understood as a bullish signal for the US-Dollar and a bearish signal for commodities.

The coffee market is no exception; the last weeks have felt turbulent. Prices are coming down from their latest high at 194.15 on February 22 in a hectic manner meandering towards 177.80 c/lb closure on Friday, March 10. This is an 8.4% retracement in only twelve trading days but an almost unchanged level on a weekly comparison.

Follow the principal market changes in the below table. We update it weekly.

Indonesia

Indonesia is well known for being the world's largest archipelago to form a single state. The nation counts five main islands and over 30 smaller archipelagos totaling over 17,000 islands. Indonesia also has the most significant number of volcanoes in the world. 147 volcanoes are spread among the group of islands, 76 are still active, and the Merapi Vulcano, located on the island of Java, erupted on Saturday. Villages near the crater were covered in ashes, but fortunately, nobody got hurt.
The northern part of Sumatra, Indonesia's most prominent coffee-producing island, is in its starting blocks preparing for the Arabica fly crop.

Indonesia is also well known for its Robusta production, totaling about 10.4 mil bags. The southern part of the island of Sumatra has already started with the Canephora (the correct scientific name for Robusta) harvest. Nonetheless, extreme weather conditions brought too much rain during the flowering phase. A smaller crop is a likely consequence.

India

The Arabica and Robusta harvest is well underway in all significant coffee production regions in India: Coorg, Karnataka, Kerala, Tamil Nadu, and Chikmagalur. Coffee cherries are being picked, and only about 30% are still on the trees.

Some regions report a slightly smaller harvest. There is a similar situation as in other coffee-producing countries: internal prices area above the international buyer's expectations, and hence little business is being reported.

Our cupping lab is receiving nice washed Arabica (Plantation AA) and Robusta (Parchment and Cherry) samples.

Vietnam

We are approaching the end of the harvest in the core coffee-producing regions of Dak Lak, Gia Lai, Dak Nong, Lam Dong, and Kontum. The main Robusta-producing areas are expected to bring along an output of about 29.5 mil bags of coffee.

Farmers have sold about 75% of their crop, pocketing good money, but business remains rather slow.

The weather has turned very dry – nothing unusual for this time of the year. Dry-mill operations in Hoh-Chi-Minh City are running at total capacity, though arrivals of coffee are slowing down a little.

Activities at the port run smoothly.

PNG

Cherries continue to mature, and finally, reasonable amounts of rain have restored soil humidity to the thirsty trees.

The harvest is expected to start towards the beginning of May.

Little coffee activity to report otherwise.

 

Asia Pacific Coffee Production

General market situation:

The global financial roller-coaster is back in town. The recent global financial turmoil has been caused by the collapse of Silicon Valley Bank (SVB) and the subsequent liquidity crisis at Credit Suisse. SVB, a tech-focused bank, had become increasingly reliant on its clientele of billionaires and tech start-ups, leading to its eventual downfall. This, in turn, put Credit Suisse under intense scrutiny, as it was already facing difficulties due to the pandemic. The Swiss National Bank stepped in with a loan offer to help Credit Suisse weather the storm, but this has not been enough to allay fears of an international banking crisis. Investors are now watching closely as the situation develops, hoping that further measures will be taken to prevent a full-blown financial meltdown. The 2007-2008 Global Financial Crisis is still fresh in many people's minds, and it serves as a reminder of the importance of taking proactive steps to protect against economic downturns. With the world economy's interconnectedness, any significant financial shock can have far-reaching consequences.

The European Central Bank (ECB) took decisive action on Thursday, increasing interest rates by a half percentage point. This move comes as the central bank seeks to get inflation under control, which currently stands at 8.5%, far above the ECB's 2% target. The benchmark rate across the EU is now 3%, the sixth consecutive meeting since July that the ECB has hiked rates to stabilize inflation. As inflation continues to be one of the central topics for economic development across nations, further rises will likely follow. The ECB - as well as other international Central Banks - will need to walk a tightrope taming inflation on the one hand while avoiding recession on the other.

And what are the effects on the coffee market during the past week? The actions taken by national governments have apparently reduced macroeconomic concerns (at least a little) and weakened the US-Dollar. We saw a strong rally on Thursday, when prices in New York went up by 7.45 c/lb, closing the day at 180.05 c/lb and establishing a new 1-week high. But only a day later, the effects of the rally vanished. NYC closed the week at 176.60 c/lb (KCK23). On a week-to-week comparison, this is a -0.7% change. There is a lot of activity during the week, but then prices remain almost unchanged. Even at the risk of sounding like a broken record: the only constant seems to be volatility!

Follow the principal market changes in the below table. We update it every week.

 

Brazil

Brazil is facing economic headwinds. The high-interest rates and fiscal uncertainty are challenging President Lula's plans for a spending drive in 2023. According to the OECD, GDP is projected to grow by 1.2% in 2023 and 1.4% in 2024. Household consumption, private investment, and exports are all expected to remain weak due to global economic conditions. In addition, Brazil is projected to fall into its deepest recession on record this year, according to the World Bank.

But luckily, there is Carnival, and the nation is slowly recovering from the Carnival frenzy and is starting to focus on the upcoming 2023 coffee harvest. Production statistics repeatedly changed in the last months, and every time a new piece of information is released, international coffee markets react accordingly. When Brazil sneezes, the rest of the coffee world gets a cold!

So far, the last bits and pieces of the past harvest are being commercialized very slowly as prices – despite coming slightly lower – are not attracting international buyers. But also the local market is relatively quiet. Everybody is already looking into the new crop as those prices look more attractive than the actual harvests'.

Heavy rains have stopped, and a typical dryer winter time is coming ahead. The increased amount of rainfall is related to the La Niña climatic phenomenon.

The main coffee-producing regions are warming up for the harvesting season's beginning. While the Arabica crop is still in the starting blocks, the Conilon harvest is already running.

The port of Santos is ready to take on the new harvest, as shipments have been diminishing in the last months. No significant delays are to be reported.

Colombia

Farmers in south Antioquia, Cauca, the Eje Cafetero (Caldas, Risaralda, Quindio), Huila, Nariño, Valle, and Tolima are getting ready for the fly-crop or mitaca.

The heavy rains have stopped, and scattered showers are changing hands with abundant sunshine helping to finish the maturation of the beans on the trees.

Coffee farmers start picking and washing the coffee, and the first parchment deliveries to the dry mills are expected towards Semana Santa (Eastern).

Simultaneously in those areas mentioned earlier and in the other coffee regions in Colombia, north Antioquia, Santander, Sierra Nevada, and Cundinamarca, the flowering for the main crop is setting in.

No significant delays are to be reported from Buenaventura, Cartagena, and Santa Marta ports.

 

Peru

The political and economic situation in Peru is constantly evolving. In recent months, the country has seen a wave of anti-government protests that have resulted in clashes with police and the death of 13 people. But the situation is calming down a little (for now).

Another heavy weather pattern has Peru's coffee-producing regions around Chiclayo and Jaén. Cyclone Yaku brought along intense flooding causing significant infrastructural damage. Roads and bridges are closed, and mudslides make transit between cities a challenge. Weather reports show prolonged rains for the region. Workers and equipment to clean up the mess and repair the infrastructure are urgently needed, but it will take ample time to even reach the affected areas.

Coffee cherries are finishing their maturation process on the trees, and the upcoming harvest looks promising in terms of volume. Quality-wise, it is far too early to assess, but climatic conditions have been almost ideal for proper ripening.

Activities at the port of Callao and Paita are running without major complications.

 

Coffee Production Estimates in South America

 

 

General market situation:

All eyes were focused on the US Federal Reserve's decision on interest rates. Particularly the global banking system was under severe stress, with Silicon Valley Bank (SVB) and Credit Suisse mainly affected. Fed's chair Jerome Powell announced the ninth straight interest hike by "only" 25 basis points. Stocks went briefly up but took a plunge once investors had the chance to read between the lines. Powell signaled that the Fed could soon wrap up its rate hikes due to potential stress in the banking sector. He said this could lead to a credit crunch with "significant" implications for the US economy. Is the end of money-tightening measures already in sight?

And what is happening in the coffee world? In general terms, roasters expect falling prices, and farmers look for higher values. There is little business materializing between them. On the other hand, the speculative sector of the coffee market is the primary driver of the NYC (Arabica) and London (Robusta) caprioles. Algorithmic trading is the principal cause of this volatility.

The international Arabica coffee market had a meandering week without any clear direction. The week closed at 179.25 c/lb – 1.5% higher on a week-on-week comparison.

Follow the principal market changes in the table below. We update it every week.

Central America

Guatemala is ramping up for Presidential Elections taking place in September. Candidates of different political parties are getting into positions to run for candidacy.

In Honduras, leftish President Xiomara Castro is moving away from the western influence towards China. Diplomatic relations with Taiwan have been ditched in favor of China.

Nicaragua's Government is further turning away from democracy as more and more NGOs, and potential opposition candidates are forced to leave the country. Only a month ago, President Daniel Ortega and Vice President Rosario Murillo – his wife – canceled the nationality of 222 opponents and flew them to the US.

The harvest is reaching its final stage in all major coffee-producing regions of Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. The lower and mid-altitude areas are completely done, and only some bits and pieces on the higher parts of the mountains are waiting for the coffee pickers to come along.

There is a general consensus among the exporters that the harvest might have been slightly smaller in Nicaragua and Guatemala, but the higher productivity in Honduras and a constant output in Costa Rica and El Salvador have surely overcompensated.

Mass migration toward the US continues to be a significant challenge for farmers. Finding coffee pickers has turned into a tedious and costly exercise. Farmers must organize buses to collect workers in nearby cities and major towns. Wages have gone through the roof. Despite the high price scenario, the business case for a coffee farmer is becoming more complicated as not only are farm workers getting substantially more expensive, but changing climatic conditions and expensive fertilizers are adding pressure to a thin margin calculation.

Coffee cherries have continuously been collected, depulped, fermented, and dried, and parchment has been delivered to the dry mills of cooperatives and exporters. Nonetheless, the exports remain comparatively low compared to the former seasons. Warehouses are pretty full, buyer's demand has slowed, pushing prices lower, and exporters are looking to sell the remaining coffee stocks.

Activities at ports are running smoothly and without any significant complications. There are enough food-grade containers available.

 

 

General News

After weeks of severe turmoil in the financial markets, the last seven days gave a chilled and laid-back impression. The aftermaths of the collapsing SVB and UBS taking over Credit Suisse were still heading the news tickers, but fortunately, no further harm happened to the banking system.

Nonetheless, the weather front kept people in Eastern Africa quite alert. Tropical cyclone Freddy killed more than 300 persons in Mozambique alone and kept moving towards Malawi. Extreme wind, heavy rains, and mud-slides destroyed people's homes, roads, and infrastructure. This is one of the strongest storms ever recorded in Eastern Africa.

The NYC Coffee Arabica contract for May 2023 (KCK23) has reached a new 9-week low at 166,15 c/lb. There is no real concrete news that influenced the market to go lower. The facts remain on the table, with the only changing variable being time. As we approach the Brazilian harvest, it looks like there is enough coffee around and still more to come. Fears of flooding in Brazil's core coffee-producing areas around Minas Gerais have been reduced, and funds started liquidating their speculative long positions, adding to further losses. The drier conditions in Brazil are coming at a good time as farmers prepare for the harvest and need space for drying the cherries.

Transactions between exporters and importers remain stiff. Little business is materializing, pushing sellers towards a slightly more bearish sentiment. The week closed at 170,50 c/lb – this is 4.9% lower than the previous Friday. On the other hand, the international Robusta market (RCK23) has had an outstanding performance reaching a new 7-month high at 2,250 USD/MT and closing the week at 2,206 USD/MT.

Follow the principal market changes in the table below. We update it every week.

Ethiopia

The Oromo Liberation Front (OLF) has emerged as a new military rebel army in Ethiopia's Oromia region. This comes after Prime Minister Aby Ahmed reached a peace agreement with the Tigrayan People's Liberation Front (TPLF) following two years of intense fighting. In an effort to extend the same olive branch to rebels in Oromia, Mr. Aby declared: "peace, much like war, needs bravery."

The past weeks have seen abundant rains in all coffee-producing regions. Roads are challenging to transit, and coffee movement from the interior towards Addis Ababa is slow. Those coffees making it to the dry mills are being milled and shipped to the port of Djibouti. The pricing situation continues to be a significant challenge for all coffee exporters. Prices in the internal market do not match international buyers' expectations as they do not correlate with the global coffee markets. But prices for the more commercial qualities are starting to give in a little. This looks like a first step in the right direction. But the big question remains the same: who is holding stocks? If prices start melting to match international buying interest, then Akrabis holding stock would realize tremendous losses while farmers only logging-in smaller profits.

There is a shortage of adequate food containers delaying shipments. The train is also not transiting to Djibouti as they face some technical problems around the Afar region.

Kenya

The coffee auctions have seen very nice coffees from Mt. Kenya's central regions. Dry mills are busy milling the coffee and getting it ready for export. The samples reaching our lab bring a big smile to our palates, and we eagerly await the first arrivals of this promising main crop.
Activities at the port of Mombasa are running well and without significant interruptions.

Tanzania

Finally, some rains have come to northern Tanzania; it was eagerly expected and broke a prolonged dry spell. Coffee trees are recovering from the heat stress, and plantations and chambas (smallholder coffee farms) alike look very green and juicy. Coffee cherries continue their maturation process. The beginning of the harvest is expected towards June.

The southern regions around Mbozi, Mbeya, and Mbinga have received abundant rains. Coffee trees look beautiful and are well-packed with coffee for the new crop. Very amicable weather conditions – sun and rain changing hands harmoniously – encourage a positive outlook toward the upcoming harvest.

The dry mills are busy preparing the coffee for export.

No major news is coming from the port of Dar Es Salaam.

Rwanda

The coffee harvest is entering its peak season. The washing stations receive reasonable amounts of cherries, pulping, fermenting, washing, and finally, drying the parchment.

The harvest looks good in terms of volume, and we very much look forward to cup the first samples.

Coffee Production Estimates in East Africa

 

 

 

General market situation:

European leaders Ursula von der Leyen, Emmanuel Macron, and Annalena Baerbock are making a trip to China in an effort to shift the geopolitical power dynamics. The goal is twofold: not only does the EU try to coax China away from its alliance with Russia and convince them to settle tensions with Ukraine, but they also hope to strengthen business relationships between Europe and China. This is a highly delicate balancing act.

Inflation remains high in the US and EU markets despite slight decreases in recent reports. The Consumer Price Index (CPI) decreased to 5%, but when volatile indicators for food and energy are removed, the adjusted inflation rate is much higher. Because of this, strict monetary policy by both US and EU governments looks set to continue for some time yet.

Global markets were volatile again over the past fortnight; Arabica coffee prices rose as high as 199.70 cents per pound on Thursday before settling at 193.40 c/lb for the week – a 5.3% increase since Thursday night before Easter break. Robusta prices experienced similar spikes, reaching 2,470 USD/MT on Thursday before being priced at 2,411 USD/MT for the week – 4.9% higher than last week's close.

But is there a real tightness in the supply/demand equation? On an aggregated level, it looks like there is enough coffee in the pipeline. Some reports on a shortage of washed Arabica coffees out of Colombia are well overcompensated by other reports forecasting an improved harvest in Brazil. There is enough coffee around, but (maybe) not (yet) at the right spot.

Follow the principal market changes in the below table. We update it weekly.

Indonesia

The aging effect is not only affecting coffee trees: Indonesia and Malaysia are the biggest palm oil producers in the world, making up 85% of global production. Growers in both countries are working hard to replant their estates after a decade of letting them get older. This aging trend could lead to a decrease in the supply of this important commodity, which makes up almost 60% of all vegetable oils.

Significant weather caprioles took place on Indonesia's main coffee-producing island of Sumatra. Extreme rains brought flooding and landslides in the coffee regions, damaging local infrastructure and coffee farms.

The Robusta harvest is now complete in Southern Sumatra, while Arabica farmers on Java, Flores, and Northern Sumatra (fly-crop) are preparing for their first pickings of new harvest as coffee prices remain high due to current market conditions.

There is no major news from the port; logistics are returning to what we once considered "normal".

 

India

The Arabica and Robusta harvest is completed in all major coffee-producing regions in India: Coorg, Karnataka, Kerala, Tamil Nadu, and Chikmagalur.

Coffee exporters are busy milling, grading, and preparing green coffee for export. Other shippers are collecting coffee for the Monsoon season.
India's main ports (Mangalore and Cochin) also report no notable disruptions thus far.

 

Vietnam

The coffee harvest is over in all core coffee-producing regions of Dak Lak, Gia Lai, Dak Nong, Lam Dong, and Kontum. The main Robusta-producing areas are expected to bring along an output of about 29.5 mil bags of coffee. The weather has turned scorching. While some coffee regions are experiencing very good amounts of rain, others irrigate their fields.

Flowering has begun, and all coffee fields are now covered in white.

Dry-mill operations in Hoh-Chi-Minh City are running at full capacity, and exporters struggle to keep up with shipping schedules.

At the port, activities remain smooth.

 

PNG

Meanwhile, the new crop is starting to flow in PNG. Coffee farmers pick the cherries and deliver them to central pulping units or process them at home.

We look forward to receiving samples for testing in our lab!

 

Asia Pacific Coffee Production

General market situation:

The global economy has been receiving a significant amount of attention in the past week. According to the World Economic Outlook report from the International Monetary Fund (IMF), global inflation is expected to decrease to 6.6 percent in 2023 and then to 4.3 percent in 2024, which remains higher than pre-pandemic levels. Additionally, the Global Economic Prospects report from the World Bank indicates that developing countries will experience a sharp and long-lasting slowdown, with global growth projected to slow to 1.7 percent in 2023, which is lower than the anticipated 3 percent expected six months ago.

On Saturday, the world celebrated its Earth Day (April 22). This special day reminds us of climate change's importance, urgency, and consequences. It has been celebrated since 1970. Yet remembering alone is not enough. We also need to take more action. The pace of sea-level rise has doubled, and climate experts foresee more extreme weather events ahead.

The coffee world has gathered together at the SCA in Portland, looking at a rampant growth and swift fall of the international coffee prices for Arabica and Robusta. On Tuesday, Arabica Prices in New York reached a new 6.5-month-high at 204.90 c/lb (for the new spot month of July 2023 – KCU23).
When looking at the previous days' price development, the question remains: what is driving the price dynamic? From a coffee-fundamental sight, there is little news justifying such a move. The main drivers were the rising prices in other leading commodities, such as oil, and further technical effects from a macroeconomic perspective (mainly currencies). The bull run seems to have reached its top now, and potential for retracement and even a new bear movement are starting to appear. On a week-to-week comparison, the rally gave away its early gains on Friday, closing the week almost unchanged at 191.50 c/lb (+/-0%).

Follow the principal market changes in the below table. We update it every week.

 

Brazil

Former President Jair Bolsonaro is returning to Brazil after his self-imposed exile in the US. He faces an investigation as he apparently incited rioters to storm the Brazilian Congress in Brasilia in January 2023.

The last days have brought a cold and rainy front to Brazil's main Arabica-producing regions. The colder weather pushed a drop in temperature but not exposing any coffee trees to frost risk. Frost's probability continues to be low. The forecast for the following weeks looks relatively dry; no further rains are expected.

The Arabica and the Conilon (Robusta) harvest have already started and look promising. Brazil's national agricultural consulting agency Safras & Mercado has increased its production forecasts to 66.65 million bags. This is 13% more when compared to the previous crop. Some warehouses are still full of past-crop coffees waiting to be commercialized and shipped. Dry mills are preparing to receive "bica corrida" (milled, green but unsorted, and uncleaned coffee).

Activities at the port of Santos are running without any significant delays. We hope this also stays the same once the shipping season starts to pick up towards July.

Colombia

On Thursday, Colombia's President Gustavo Petro and his US colleague Joe Biden met in Washington DC. Hot topics on the agenda were climate change, migration, and drug policy.

The snow-covered Nevado del Ruiz volcano shows some activity and keeps the coffee farmers around the area on permanent alert. Smoke, gas, and ash emissions can be observed. The population is warned and ready to react.

The southern coffee regions of Colombia – mainly Huila, Nariño, Cauca, Valle del Cauca, and the Eje Cafetero (Quindío, Risaralda, and Caldas) are entering the mitaca harvesting season (fly crop). Although in these parts of Colombia, the mitaca reassembles the main crop in terms of size. Rain has become the new normal in Colombia. Climate change is definitely showing its effects, and farmers face prolonged rainy seasons. Too much rain can also be a concern for the fixation of the flowering for the main harvest, expected to start towards October 2023. But for now, there is no reason (yet) to raise a red-alert flag.

Dry mills and exporters are preparing their warehouses and equipment for the coffees coming from the mitaca.

Colombia's main ports of Buenaventura, Cartagena, and Santa Marta do not report significant concerns.

Peru

The low-altitude regions of Peru have started with the first pickings. Farmers in the medium and high-altitude coffee regions are waiting for their cherries to mature on the trees. Climatic conditions have been prosperous for the formation of the cherries. Uptake in the production numbers would not surprise us and would be very welcome in a tight washed Arabica global market.

Activities at the port of Callao and Paita are running without noteworthy complications.

Coffee Production Estimates in South America

 

 

General market situation:

All eyes are focused on the upcoming US inflation data, as this could trigger further interest hikes by the US Federal Reserve. Jerome Powell, Chair of the FED, will probably increase interest rates again tomorrow. There is abundant hope this might be the last rate increase for a while. Rumors about the solvency of the US bank First Republic alarmed customers and investors alike. The bank got into a severe solvency situation, losing 97% of its stock value. Yesterday, JP Morgan was ready in the starting blocks and took over First Republic during this lapse of weakness. This happened only a few weeks after Silicon Valley Bank and Credit Suisse went belly up. The banking system – particularly in the US - still looks pretty exposed to the actual financial caprioles.

Apparently, the warmer spring days bring back some relaxation – at least on the international Arabica market. New York retraced during the course of last week - again without any substantial reason - but on a relatively high daily broad-band, ranging between 4 and 6 ct/lb (intraday volatility). Arabica prices closed at 191.45 c/lb on Friday. This is a 2.9% lower on the week-on-week comparison.

A remark needs to be made for the Robusta market in London. To see similar prices as now, we need to go back to June 2011! Where is this price push coming from? Some point towards a smaller harvest in southern Sumatra, others to delayed shipments from Vietnam. But the most convincing explanation lies within the industry roaster's hunger for the comparatively cheaper Robusta and the substitution of Arabica in their blends. The week closed at 2,409 USD/MT (=109.27 c/lb).

Yesterday (Monday) was Labour Day. Most coffee-producing and -consuming countries had a public holiday. The international Robusta coffee market in London stayed closed, while the New York Arabica market traded at low flame.

Follow the principal market changes in the table below. We update it every week.

Central America

But what is really bringing the buck back to the producing country? Coffee is undoubtedly bringing USD "back home," but the true champions are the "remesas" (the payments done by e.g. Central Americans living and working in developed countries). Check out the following top 6 producing countries:

Source: Bloomberg

For comparison, in other coffee-producing countries such as Brazil, remesas amount to 5 billion USD but have a minimal 0.2% effect on the GDP.

The harvest is now fully completed in all coffee-producing regions of Costa Rica, Guatemala, Honduras, and Nicaragua. Farmers are doing some husbandry work on their trees and resting properly after the intensive harvesting days. Particularly taking into account that lots of farmers struggled to find coffee pickers.

The harvest might have been slightly smaller in Nicaragua and Guatemala, but the higher productivity in Honduras and a constant output in Costa Rica and El Salvador have overcompensated the shortfall. Good rains have brought along a good flowering for the next harvest, expected to start towards the end of this year. The flowers are fixing well, and coffee-buds will start building along soon.

Private dry mills and cooperatives alike are busy preparing coffee for export. Their warehouses are running at total capacity producing exportable green beans, packing, and sending coffee to the ports for shipment. Particularly in Honduras and Guatemala, some coffees are still unsold in the warehouses.

As the exporting season is entering the busiest moment of the year in Central American ports, there are minor bottlenecks in food containers, and some shipping lines are overbooked. Delays might occur.

 

 

General News

The US Federal Reserve increased interest rates by further 0.25 basis points in its continuous effort tame inflation (between 5% and 5.25%). This is the 10th consecutive time, and it has reached a 16-year high. The European Central Bank followed with a corresponding adjustment just a day later.

The global Arabica coffee market has been meandering between 181 c/lb and 188 c/lb without any clear direction. Participation from the coffee industry – such as farmers, exporters, traders, and roasters – is relatively low. Participation is coming more from the financial industry side. Funds and managed money hold significant positions. Little coffee-relevant news during the course of the week. Some weather-related forecasts on Friday, relating to a colder weather front in Brazil, pushed prices moderately higher, closing the week at 188,05 c/lb. This is a price change of +1.1% on a weekly comparison.

Follow the principal market changes in the table below. We update it every week.

Ethiopia

The last years were difficult in Ethiopia. Armed conflict has risen in different regions culminating in a major war in the northern Ethiopian region of Tigray. But also other areas, such as Oromia, have brought along armed rebel groups. The Government is constantly attempting to tame the insurgents through different peace talk rounds.

The coffee business continues to be rather slow. Little new business is taking place as internal coffee prices are far above international buyers' interests. This situation has been going on since the beginning of this harvest, and as a consequence, there is still a lot of coffee pending to be sold in Ethiopia. The big question is: where is the coffee, and who owns it right now? Exporters point to the akrabis, and they to the farmers. Others argue that the coffee is consumed in the internal market or sold "under the curtain" to Sudan or further neighboring countries. The Ethiopian Government urgently needs USDollars and has increased its pressure on exporters substantially. There are rumors about a revival of the ECX (Ethiopian Commodity Exchange), while others expect a significant devaluation of the local currency (Birr)...

Meanwhile, coffee in jenfel (sundried cherries) is used as a protection against the ongoing devaluation of the local currency. At the same time, a power struggle between the Federal Government and the Regional Governments of the coffee-producing provinces is taking place. The Coffee and Tea Authority will apparently reopen the quality control centers formerly operated by the ECX and assess all coffees before moving them internally. This will surely not speed up the process.

Besides these structural problems, the quality of washed and natural Grade 1s looks very encouraging. Lower grades naturals show quite some irregularity.

The few shipments leaving for Djibouti are delayed as finding adequate food-grade containers has become an issue.

Kenya

The coffees from the main crop continue to bring a big smile to our cupping team in the lab. The main crop is approaching its end, and the final lots are being auctioned.

Dry mills are busy preparing and selecting the final main-crop coffees for export.

There will be a brief auction break between the two yearly harvests. The fly crop is slowly starting in the lower altitude regions. It is expected to intensify towards June.

Activities at the port of Mombasa are running without any significant delays.

Tanzania

The lower altitude farms in northern Tanzania around Mt Kilimanjaro are slowly starting their first picking rounds. The higher altitude coffee-producing regions will start their activities in about four to eight weeks from now. Climatic conditions continue to be very promising, bringing along some scattered showers and sunshine.

The coffee cherries in Tanzania's south around the beautiful highlands around Mbeya, Mbinga, and Mbozi are maturing nicely. The harvest is expected to start in July. Small cooperatives are preparing their washing stations (Central Pulping Units – aka as CPU's).

Rwanda

The harvest is progressing well – but with noticeable differences - in all parts of Rwanda. While the northern, eastern, and western regions produce some decent amount of coffee, the productivity in the south looks rather low this season.

Abundant sunshine allows the parchment to dry fastly after being de-pulped, fermented, and washed. Although we need to wait for the first samples to reach our lab towards the end of May, the quality looks very promising.

Coffee Production Estimates in East Africa

 

 

General market situation:

The Arabica coffee market in New York has been on a rollercoaster ride, with prices zig-zagging and intra-day volumes relatively low. The slightest news can cause a stampede of buyers or sellers, making the market highly volatile. All eyes are on Brazil as we enter the frost season, but temperatures remain stable for now. On Friday, the spot month (July-23) closed at 182.85 c/lb, down 2.8% from the previous week's close.

In contrast, Robusta coffee in London is showing remarkable strength, reaching a new high of 2,500 USD/MT on Thursday. This reflects the roasting industry's shift towards cheaper Robusta blends while simultaneously Vietnam's exports are rather low and Indonesia's Robusta production has been negatively affected due to climate change and heavy rains. London closed at 2,483 USD/MT on Friday.

Follow the principal market changes in the below table. We update it weekly.

Indonesia

Coffee consumption in Indonesia is on the rise, despite the economic slowdown caused by the Covid-19 pandemic and increasing inflation. Ready-to-drink 3-in-1 instant coffees remain the most popular choice among consumers, but classic roast & ground coffee is also gaining popularity.

Farmers are getting ready for the beginning of the Arabica harvest in northern Sumatra. The islands of Sulawesi, Bali, and Java have been harvesting for over a month now and are reaching the peak of the harvest now. Weather is dry and helping farmers to harvest and process the coffee on their small farms.

No major new from the ports – logistics running rather smooth for now.

India

The Arabica and Robusta harvest is over in all major coffee-producing regions in India: Coorg, Karnataka, Kerala, Tamil Nadu, and Chikmagalur.In some regions the coffee trees are beginning their flowering period.

Coffee exporters are busy milling, grading, and preparing green coffee for export. Other shippers are collecting coffee for the Monsoon season.

India's main ports (Mangalore and Cochin) also report no notable disruptions thus far.

 

Vietnam

Vietnam's core coffee-producing regions of Dak Lak, Gia Lai, Dak Nong, Lam Dong, and Kontum have seen a beautiful flowering and coffee fields were covered in white. While some areas have seen plenty of rains others run quite dry. Farmers need to irrigate in order to get the buds fixed on the trees.

Farmers have sold their coffee at very good prices and are in no hurry to sell more unless prices continue to increase. They are well financed and use coffee as a cash reserve.

Dry-mill operations in Hoh-Chi-Minh City are running at full capacity, and exporters struggle to keep up with shipping schedules.

At the port, activities remain smooth but coffee exports remain below expectations.

 

Papua New Guinea

The new harvest has started and is reaching full speed now. Cherries are being picked and either washed at home or delivered to central washing stations. Parchment is coming down the mountains and reaching the buying posts in the interior and the dry mills are starting their operations, milling, selecting and preparing the coffee for export.

Asia Pacific Coffee Production

General market situation:

The essential financial news focuses on the US debt negotiations and the risk of a national default of the biggest global economy. The US Treasury Department is putting pressure on the negotiations as the US Government will be unable to pay any bills as of June 1. In the meantime, the US Federal Reserve will not modify the interest rates before a new budget is agreed upon between Republicans and Democrats. The debate goes on between the two parties - after all, the new debt ceiling will target 31.4 trillion USDs (how many zeros is this??? 31,400,000,000,000).

The international coffee prices for Arabica closed the week on a 3-week high on Friday at 192.00 c/lb. Some minor downside corrections in the Brazilian Arabica production and decreasing certified inventories in NY are the main fundamental drivers of the price move. But for sure, an influx of managed money from non-coffee-industry investors in soft commodities brings along the major push in the whole pricing construct.

Robusta continues in its "high-fly" modus trading at a 12-year high. A decisive switch towards more Robusta in the industrial-roaster blends is one of the main drivers. Also, delayed shipments from Vietnam and a smaller crop in Indonesia are pushing prices consistently higher. London closed the week on Friday at 2,588 USD/MT, marking a 6.4% price increase on a week-to-week comparison.

Follow the principal market changes in the below table. We update it every week.

 

Brazil

As we enter a time frame in which frost becomes a considerable risk for coffee producers, all eyes remain glued to the weather forecasts for the Brazilian coffee-growing regions. Some farmers were slightly delaying the start of the Arabica harvest as plenty of rains were turning the drying of cherries into a challenge. This has improved substantially, and both the Arabica and the Conilon harvest (aka Robusta but scientifically correctly named Canephora) are well on their way in all of Brazil's major coffee-producing regions. The leading Brazilian agribusiness consultancy Safras & Mercados estimates that 9% of the crop has been harvested. Applied to their crop forecast of 66.65 million bags, this would be the equivalent of almost 6 million bags – there is still some way to go.

But for now, the weather conditions are good, and everybody is busy collecting coffee and starting to process it. There have been several production forecasts, and what calls attention is the margin of error embedded in statistics representing a huge volume. The delta between the highest and the lowest production forecasts is the equivalent of the production of a major coffee-producing country such as Ethiopia or Honduras: Tudo é grande no Brasil... also the potential margin for error.

No major news from the port of Santos. Shipments are advancing without any significant problems.

Colombia

Finally, the Federacion Nacional de Cafeterias (FNC) elected a new CEO. Germán Bahamón, originally from the Huila Department (now the major coffee production region in Colombia), is a coffee farmer in 3rd generation and holds an impressive CV.

Coffee production fell 12% to 11.1 million 60 kg bags in 2022, the lowest since 2013 and well below the FNC's estimated 12 million bags for the year. With FNC's reports on falling production numbers, he will surely lead the FNC and the Colombian coffee producers into a new time. We wish him all the best in this critical endeavor.

The mitaca-harvest is progressing well in the southern coffee regions of Colombia – mainly Huila, Nariño, Cauca, Valle del Cauca, and the Eje Cafetero (Quindío, Risaralda, and Caldas).

Activities at the ports of Buenaventura (Pacific Ocean), Cartagena, and Santa Marta (both Caribbean Ocean) run without significant interferences.

Peru

The coffee harvest started in the lower and mid-altitude coffee regions of Peru. Coffee trees are well-packed with cherries giving hope to a big crop. The maturation status of the cherries in the higher altitudes looks quite advanced, and harvesting activities will start in a month.

All Fairtrade-certified farmers and cooperatives are trying to commercialize their coffees at the set higher prices. Differentials have softened a bit, but the minimum price for Fairtrade coffees will change from 140 c/lb to 180 c/lb for all contracts closed after August 1, 2023.

Cooperatives and exporters alike prepare for receiving the parchment. They will be milling, segregating, and preparing coffee for export.

Coffee Production Estimates in South America

 

 

General market situation:

In a hard-fought negotiation battle, Republicans and Democrats have finally agreed on the budget. The result is a much-needed relief for the United States as the debt ceiling, which stood at a staggering US$31.4 trillion, will be suspended until January 1, 2025. This crucial decision effectively alleviates the looming threat of a US default scenario, a scenario that had been haunting policymakers and economists alike.

Promising news emerges from the realm of coffee production as several countries witness favorable conditions. Brazil and Colombia, two prominent coffee-producing nations, are experiencing the benefits of dry weather and abundant sunshine, which have accelerated their harvests. Nonetheless, recent production statistics from Colombia indicate a decline in numbers. However, optimistic estimations for the upcoming 2023/2024 Vietnamese coffee harvest overshadow the setback in Colombia, showcasing a robust potential that is expected to compensate for the smaller Colombian harvest.
The coffee industry must also consider industrial roasters' preferences, who may further shift their blends from the more expensive Arabicas (such as those from Colombia) to the economically attractive Robustas from Vietnam.

The Arabica market has responded to the macroeconomic and coffee-specific news, experiencing a decline of 5.4% and closing the week at 181.60 cents per pound. In contrast, Robusta has soared to a new 15-year record high, reaching 2,675 USD per metric ton. However, after its impressive ascent, Robusta has stabilized somewhat, closing the week with minimal changes at 2,574 USD per metric ton.

To stay informed about the ever-changing dynamics of the coffee market, refer to the table below. We diligently update this table on a weekly basis, providing you with the latest insights and updates.

Central America

As the Atlantic hurricane season approaches, set to kick off on June 1, experts caution the public to remain vigilant. The National Oceanic and Atmospheric Administration (NOAA) recently released its annual forecast, indicating that this year's hurricane season is expected to be relatively normal. However, normalcy should not be misconstrued as a lack of potential danger. Thanks to the cyclical weather phenomenon known as El Niño, which exerts a powerful influence on hurricane activity, the Atlantic basin is anticipated to experience an average storm season.

The NOAA predicts a total of 12 to 17 named storms, with the possibility of up to four of them intensifying into Category 3 hurricanes. It's worth noting that last year's hurricane season witnessed 14 named storms, resulting in a staggering $117 billion in damages. So while the forecast suggests a typical season, it serves as a reminder that preparedness and vigilance are essential in mitigating the potential impact of these powerful natural events.

In the coffee-producing regions of Costa Rica, Guatemala, Honduras, and Nicaragua, the labor-intensive coffee harvest has come to a close. Farmers are now focusing on crucial husbandry tasks and allowing themselves some well-deserved rest after toiling through the demanding days of harvesting. It's worth noting that many farmers faced challenges in securing an adequate number of coffee pickers, which added to the complexities of the harvest season.

Favorable weather conditions, marked by sufficient rainfall, have contributed to a promising outlook for the next coffee harvest, expected to commence towards the end of this year. The recent rain has resulted in a bountiful flowering process, with the coffee flowers showing excellent development and paving the way for the growth of coffee buds in the coming weeks.

Both private dry mills and cooperatives are currently immersed in preparations for exporting freshly harvested coffee. Their warehouses operate at maximum capacity, diligently processing the beans and packaging them for shipment to the ports. However, as the exporting season enters its busiest period in Central American ports, some bottlenecks have emerged in the food container sector. Additionally, certain shipping lines grapple with overbooked schedules, further complicating the logistical processes. Compounding the situation, the Panama Canal Authority (ACP) has been compelled to reduce the maximum permissible draft of vessels traversing the Neo-Panamax locks due to a drought-induced drop in water levels, causing historically low levels of water flow. Responding to the restrictions, certain carriers have announced new fees. As a result, delays may be expected in the shipping and delivery of goods.

 

 

General News

The US economy continues to show signs of strength as the Bureau of Labor showed 339,000 new jobs. This is much higher than the 190,000 jobs initially expected. Nonetheless, some signs of an economic cool-down might be coming as, at the same time, the rate of self-employed was reduced by 369,000 people. Simultaneously, the rate of resignation is also falling. Job hopping is slowing down. It seems workers are looking for a safe harbor with a traditional employer.

The US Federal Reserve will have to make a savvy choice when they meet in July. Economic indicators are somewhat contradictory, but in their aim to cool down the overheated economy and tame inflation, they might reconsider and continue increasing interest rates.

This past week, the Arabica coffee prices were caught in a 12 c/lb market range. It shows the daily volatility and general nervousness of a market mainly traded by the speculative community. The coffee industry is studying the fundamentals but cannot clearly recognize any directional pattern. The volatility will remain part of our daily bread and butter business for the following weeks. Nonetheless, New York closed the week at 180.30 c/lb, only 0.7% below the previous Friday's settlement. The business's main volume primarily comes from the managed money sector.
Robusta prices in London continue showing strength. The week presented a narrow trading range and closed almost unchanged at 2.575 USD/MT.

Follow the principal market changes in the table below. We update it every week.

Ethiopia

The Ethiopian economy continues to have an extraordinary appetite for US Dollars. The country's main forex contributor is the export of coffee, but the first months of the new export season are more than disappointing. The reasons are multiple and quite interlinked and complex. Here are some of the critical factors:

1. Farm gate prices have risen consistently over the last months, reaching record high levels. While this is undoubtedly very good for coffee farmers, the question remains how realistic and marketable the prices are.

2. Major international roasters have backed off from Ethiopia as actual pricing is far out of their possibilities. These roasters are indeed facing some slowdown in sales. High inflation is keeping demand in check as consumers get more price-conscious. This also partially explains the major Robusta boom – we have already been informed about this.

3. New market players (primarily akrabis and some exporters) who came to the market in recent years apparently only know rising price scenarios and significant (almost constantly increasing) profitability. With this experience in mind, they heavily bought coffee early in the season (at extremely high prices) and are now stuck with costly stocks. Every sale at the current level will bring substantial losses to them. They hold and prey for a solution.

4. The Ethiopian Government planned revenues based on the last season's prices, but actual prices are below those, and hence the actual US Dollar inflow is smaller than planned. Thus the idea of establishing minimum prices. But again, international coffee futures prices in New York are highly volatile and do not really care about the particular situation of a country (of course, only with the exception of Brazil). Local minimum prices are above the buyer's purchasing ideas.

5. Further, internal taxes for coffee coming from Oromia made the coffee even more expensive. The mismatch between the local market and the international prices became even more significant.

6. The local market is paying better prices than the international buyers - but unfortunately, not bringing urgently needed US-Dollars along.

7. Farmers are hoarding jenfel (sundried cherries) as a form of cash reserve, protecting them against inflation and devaluation of the local currency.

So this has brewed together to a perfect storm. Exports continue to be very low, and the Government is putting a lot of pressure on exporters to move coffee. A new tax of 15% for exporters hoarding coffee for more than 12 months has been imposed. Apparently, some exporters have already been closed down by the Ethiopian Coffee and Tea Authority, and the Government has confiscated their stocks. A new array of penalties for exporters not shipping coffees will be released shortly. As we approach the year's second half, akrabis must liquidate positions to access cash to repay credit loans. This will happen when more coffee needs to be commercialized, and the odds are high that this will push prices lower. The race has started, and there is a lot of pressure on exporters and akrabis alike. It would not be a surprise if the next season counts fewer market players.

Finding adequate food containers continues to be a daily challenge in Ethiopia. Unfortunately, this bottleneck will bring along further delays in an already late-shipment reality.

Kenya

Kenya is not only famous for its exceptional coffee profiles but also for having two harvests per year. The main crop (aka late crop) has been harvested, and the last auction took place a couple of weeks ago.

Farmers are now busy harvesting the fly crop (or early crop), and quantity and quality look promising again. The auction will reassume its activities towards early July.
Dry mills are milling, grading, and carefully selecting the coffee for export.

There have been enough rains to restore soil humidity from the previous year's droughts. Additionally, high prices have allowed farmers to increase fertilizer application. This shall surely bring along an increased coffee production for the October 2023 through September 2024 coffee season. The US Department of Agriculture (USDA) increased its coffee production forecast by 6.7%, reaching a total of 800,000 bags.

Activities at the port are running without any significant concerns.

Tanzania

Coffee farmers in northern Tanzania, nestled in the picturesque surroundings of Mt Kilimanjaro, have recently commenced their annual harvest. Meanwhile, their counterparts in the higher altitude regions diligently monitor coffee cherries' ripening process, eagerly awaiting the optimal moment to begin their own harvesting operations. With a favorable climate prevailing, characterized by intermittent showers and ample sunshine, the conditions bode well for a successful yield.

Further south, in the breathtaking highlands encompassing Mbeya, Mbozi, and Mbinga, the coffee cherries are progressing splendidly in their maturation. The highly anticipated harvest is projected to commence in July, prompting small cooperatives to diligently prepare their washing stations, also known as Central Pulping Units (CPUs).
No major news to report from the port of Dar es Salaam.

Rwanda

In mid-May, Rwanda's Western, Southern, and Northern districts were struck by heavy rainfall, leading to devastating consequences. Tragically, the floods claimed the lives of over 100 people and caused the destruction of more than 5,000 homes, including those belonging to farmers. The resultant landslides also wreaked havoc on the infrastructure, blocking roads and impeding access to coffee washing stations. Swift action was taken by local government authorities and humanitarian organizations to mobilize resources and aid in the recovery efforts.

With the coffee harvest reaching its final stages, the coffee-producing regions in the North, West, and South have nearly completed their tasks. Only the Eastern part remains, where some final picking remains to be done. The washing stations diligently receive the last batches of cherries and prepare them for processing into washed parchment. Once appropriately dried, the parchment is sent to the dry mills in Kigali for further processing.

Coffee Production Estimates in East Africa