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
