Uganda is the largest coffee exporter in Africa and the eighth largest exporter of coffee by volume in the world, yet when it comes to coffee-producing countries in Africa, Uganda is not the first one to come to mind. But the ‘Pearl of Africa’ is working diligently to change that. 

Uganda is focusing on doubling its total agricultural exports from USD $6.629 billion to USD $12 billion by 2027. Odrek Rwabwogo, chairman of the Presidential Advisory Committee on Exports and Industrial Development (PACEID), in a presentation to an international group of journalists on a government-sponsored media tour of Uganda earlier this year, said that coffee is a top target for growth. PACEID advises President Yoweri Museveni on ways to improve and increase Uganda’s export potential in a variety of sectors. 

Historically, Uganda coffee has been used for blending and not identified, but the country wants to change that by improving quality. Within coffee, Uganda’s current exports are around $627 million annually, with the goal in five years being $1.5 billion — a 28 percent increase. Rwabwogo said that further goals include growing annual coffee production from approximately seven million bags to 20 million bags by 2030.

Currently, Uganda’s major coffee export is robusta. In August, its exports rose by 48.4 percent to 0.74 million bags from 0.5 million bags in August 2022, per the International Coffee Organization. This represents the second largest monthly exports on record, just behind the 0.79 million bags exported in March 1973. Although robusta is the largest export, Ugandan officials believe there is opportunity in premium coffee (arabica), roasted coffee and soluble/instant coffee. 

Uganda’s Ministry of Agriculture, Animal Industry and Fisheries has stated that coffee is a “strategic commodity in the agro-industrialisation programme under the National Development Plan III (NDP III)’. It has been prioritised for the country’s march towards middle-income status and poverty eradication programme.” The Ministry reported that coffee provides the needed foreign exchange and is a source of income for 1.8 million households in the country that are involved in its cultivation. 

The Uganda Coffee Development Authority (UCDA), which was established in 1991, monitors and regulates the country’s coffee industry, and advises the Ugandan government on policy issues. In addition to having the responsibility of increasing quality coffee production and productivity, the UCDA is also charged with growing domestic coffee consumption. Given that coffee has been identified as the leading commodity for growth, the UCDA has devised an aggressive roadmap –it includes nine initiatives (see chart below) – to elevate Uganda’s reputation in coffee and transform its coffee sector to achieve the stated growth goals. UCDA managing director, Dr Iyamulemye Emmanuel, said that the government is undertaking a number of measures to ensure that farmers are producing coffee that meets international market standards and requirements. He noted that Uganda is looking to export to emerging markets as well as developed markets. 

Challenges to achieving growth 

The goal to raise Uganda’s coffee reputation on the global stage is ambitious and the impediments to growth in most agricultural sectors are vast: overcoming long-held stereotypes, perceived low quality because of low-standard inputs (seeds, pesticides, chemicals, banned substances still being used, etc), lack of investment, no economies of scale, minimal understanding and sharing of information relating to regulations, weak cooperatives, high transportation costs (handling fees, limited infrastructure when receiving), and most commodities go to the low end of the market and take cost-cutting measure. 

Within coffee, the biggest challenges – aside from the average age of a coffee farmer being 63 – are the lack of branding (coffee is rarely identified as being from Uganda versus origins that are highlighted such as Ethiopia, Kenya, Colombia, Brazil, etc), changing the mindset of the producers who view coffee as just a cash crop (most producers don’t even sample their own coffee), and the perception of the global coffee industry, which views Ugandan coffee overall as low quality — but the potential is there. 

Mountain Harvest, an exporter, producer and provider of farmer services based in Mbale, aims to ‘challenge the status quo of coffee production in Uganda for the sake of smallholder farmers’ as its company mission asserts. “We want to show the market that Uganda has great coffee and that we can consistently deliver it,” said managing director, Kenneth Barigye. 

Mountain Harvest produces, processes and exports organic, Fair Trade and Rainforest Alliance-certified coffee. It maintains eight processing facilities throughout Uganda, where it employs washed, natural and honey processing techniques. The Mt Elgon facilities are overseen by processing manager, Ibra Kiganda, who is also the 2023 African Fine Coffees Association barista champion. Kiganda is passionate about coffee processing and likes to experiment with anaerobic fermentation, carbonic maceration and other new techniques (using microlots grown at elevations between 1,600 and 2,200 meters above sea level). 

The majority of coffee producers in Uganda grow coffee on farms that average one acre at best, typically they are smaller. Mountain Harvest teaches producers, especially women – who do the bulk of the labour on smallholder farms in Uganda – better farming methods and techniques (such as stumping, pruning, irrigation, fertilising, using organic pesticides/weedicides, etc), and is working to change their mindsets when it comes to selling their coffee. The farmers are also taught the importance of intercropping with bananas, avocados and other trees that provide shade for the coffee as well as incremental revenue. 

Better livelihoods through better pricing 

Mountain Harvest provides micro-financing that educates producers on savings and loans, in addition to covering expenses in the off-season. The financial training builds their capacity to manage money while creating a transaction history the future lenders will require. “We are not an NGO — we do not give handouts,” asserted Barigye, noting the 2 percent interest loans the company offers to producers. “Our hope is that after three years, the farmers can go to a commercial bank that has more money.” 

The loans are ‘kick-starter financing’ for the farmers, but said Barigye, they also help build trust with the farmers so they will sell Mountain Harvest their cherries rather than process and accumulate coffee at their homes. 

Farmers receive more money for their coffee – about 20 percent more – if they sell Mountain Harvest the cherries rather than the parchment but are not always willing to do so. Company COO, Nico Herr, said that many farmers will think about when they will need money for the family (school clothes, books, etc) so they will hold onto the coffee and ‘play the market’ to see if someone else will offer them a higher price. “It is degrading the crop, but you have to consider that this is the traditional way of processing coffee in Uganda,” she explained, “we’re introducing a new way to do coffee.” 

Herr, a certified Q grader, shared that Mountain Harvest is also working to shed Uganda’s reputation for ‘fast fading’ coffees. Coffees that ‘tasted great’ on cupping tables in Mbale deteriorated during transportation oversees. They discovered that it was a warehousing issue. 

Mountain Harvest now has one of the few climate-controlled warehouses in the country and has grown over the past few years from filling three containers of coffee annually to 11. 

Recruiting youths is critical 

Instrumental to the growth of Uganda’s coffee industry is ensuring that younger generations remain interested in coffee farming and not all flee to urban areas for higher paying jobs. One factor in Uganda’s favour is that although the average age of a coffee farmer is 63, more than half the population is under the age of 18. 

“For us to have sustainable coffee production, we have to attract young people while their parents are still there to train them,” stressed Barigye. 

The government has extension programmes but it is overwhelmed so individual companies provide these services. Companies like Mountain Harvest, Endiro Coffee and Masha Coffee, with the support of the UCDA, are teaching Ugandans – both young and old – on all facets of the coffee industry: from proper farming techniques to elevate quality and improved processing and storage methods, to better record keeping, microfinancing, quality control, and how to cup, as well as training young men and women to be baristas. 

Coffee cupping at Mountain Harvest Coffee

Mountain Harvest selects the top 20 students from a local university each year to be trained in agronomy and microfinance. After six months of training and work, it offers permanent positions to the top achievers among those students. Another programme is its ‘Professional Pickers’, which hires local youth for assistance during the harvest and to do other tasks the remainder of the year. 

Ugandan officials and private sector companies realise, however, that the key to growing Uganda’s coffee industry, is through women. Women in Uganda, as in many coffee (and tea for that matter) producing countries, have not had a ‘seat at the table’. Women have long been heavily involved in the labour aspect of coffee production (picking and sorting for example) but have not had the opportunities for training and education or been involved with business transactions because of conflicting familial activities. 

Endiro Coffee and Masha Coffee are both female-owned and operated companies and work with women producers — training them in all segments of coffee production, hiring them, and of course, sourcing coffee from them. Mountain Harvest also taps women to be its team leaders (most farms are still owned by men) so they are also involved on the business side. 

“We have found that when the women handle the money, there is more for the children for clothing and school items, for food and savings,” said Millie Drijaru, head of coffee, Endiro Coffee. Both Barigye and Sylvia Achebet, executive director of Masha Coffee echo the sentiment. 

Endiro Coffee was founded in Kampala in 2012 by Gloria Katusiime as a café to provide employment opportunities to Ugandan youths. In 2014, Endiro switched from buying roasted coffee to sourcing green coffee directly from Ugandan farmers, paying them a premium for their high quality beans. It partnered with a roaster in Kampala for its blends. 

Endiro started with 50 farmers that formed the Endiro Growers Bukalasi Women’s Group, which has now grown to a network of more than 500 farmers across four growers groups throughout Uganda. Endiro offers training and support, and in return is receiving higher quality coffee and greater yields, which allows it to offer farmers better prices, thereby improving their livelihoods. Endiro Coffee, which received its B Corp certification in 2019, now operates 14 coffee shops in Uganda, one in Kenya and one in Aurora, Illinois. It plans to open its own roastery in Uganda this year. 

Kween-based Masha Coffee buys coffee cherries from a network of nearly 1,000 female-led farms –ranging in elevation from 1,800 to 2,400 meters above sea level – in the Kween, Kapchorwa and Bukwo districts. Masha sends field officers to train local farmers in best practices multiple times throughout the year. Trainers offer guidance on agronomy methods from planting seedlings to soil management to harvesting, etc, and said technical manager, Eunice Chekaptui, “how to be environmentally friendly,” – all to ensure a consistent supply, which benefits both Masha Coffee and the farmers. Masha Coffee also hires local youths to assist with production and processing in Kween. 

Endiro Coffee’s shop in Sipi Falls at Lacam Lodge

Masha Coffee has begun shipping roasted coffee to wholesale customers internationally and is exploring distribution opportunities in other countries, including the United States. The coffees Masha processes in Kween are carried in parchment to facilities in Mbale for hulling, and then to Kampala for roasting and packaging. Having to haul the coffee to so many different facilities and towns is costing Masha “time, money and security,” said Achebet, noting her dream would be “to have everything done here.” She said that having everything done in one place would reduce risks. First up would be purchasing a huller, with roasting being the final phase of the plan. 

Joining forces to meet demand 

Along with 16 other Uganda companies, Masha Coffee is a member of the Coffee Investment Consortium of Uganda (CICU), a Ugandan trade group that shares resources and connections to meet international demand. 

By collaborating to deliver higher volumes of higher quality Uganda coffee on the global market, the CICU’s mission is to attract investments specifically to cover expenses and the cost of exporting. Nelson Tugume, CEO of Inspire Africa and chairman of the CICU, said there is no export financing, no available or product-oriented credit. “Coffee is different from other commodities like bananas, from a manufacturing and housing [perspective], therefore you need a particular [type] of financing.” 

PACEID is consulting with financial groups and institutions, including lenders, equity funds, foundations and the Uganda Bankers’ Association to develop an export credit fund that will provide affordable financing for producers of coffee and other products. And while many are hopeful such a fund will be established and available soon, the CICU believes time is of the essence. “[International] buyers are saying they want to buy the coffee directly, [but are asking] ‘do you have what it takes?’,” said Tugume. He shared that Uganda needs to create a better environment for investors to bring in the financing. “In terms of production, the farmers can manage it, if you give them a better price. They can manage it at the production level, [but the difficulty] is in the market.” 

The UCDA, along with Mountain Harvest Coffee, Endiro Coffee, Masha Coffee and other CICU members firmly believe that as more companies start producing higher quality, Uganda’s profile will be elevated. “The market is going to know Uganda as an origin,” said Barigye, “and it’s going to appreciate Uganda as an origin because we have great coffees.” 

•  Vanessa L Facenda joined T&CTJ in 2012 as editor. She was previously editor of Retail Merchandiser and has written for a variety of magazines including Consumer Reports, Brandweek, Adweek, Hollywood Reporter, and Specialty Food Magazine, among many others. She may be reached at: vanessa@bellpublishing.com. 

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Green Coffee Price
The ICO Composite Indicator Price (I-CIP) averaged 153.13 US cents/lb in September, posting a median value of 152.74 US cents/lb and fluctuating between 147.86 and 160.17 US cents/lb.

The Robustas remained at a near-record high in September, staying firmly above the 120.00 US cents/lb mark. The Colombian Milds and Other Milds decreased by 1.4% and 1.7%, to 184.98 and 183.52 US cents/lb, respectively, in September 2023. The Brazilian Naturals and Robustas both contracted by 0.3% and 0.6%, reaching an average of 154.19 and 123.89 US cents/lb, respectively. ICE’s New York market fell by 1.9%, whilst the London Futures market shrank by 2.0%, to 153.55 and 109.14 US cents/lb, respectively.

The Colombian Milds-Other Milds differential grew 79.1% to 1.46 US cents/lb. The Colombian Milds-Brazilian Naturals differential shrank 6.4% to 30.79 US cents/lb, whilst the Colombian Milds-Robustas differential also contracted 2.9% from August to September 2023, averaging 61.09 US cents/lb. Meanwhile, the Other Milds-Brazilian Naturals and the Other Milds-Robustas both contracted 8.6 and 4.0%, reaching 29.33 and 59.63 US cents/lb, respectively. However, the Brazilian Naturals-Robustas differentials expanded 0.9%, averaging 30.30 US cents/lb in September 2023.

In September 2023, the Colombian Milds-Other Milds Arabica differential fluctuated between positive and negative.

Arbitrage, as measured between the London and New York Futures markets, narrowed by 1.8% to 44.41 US cents/lb in September 2023. This marks the lowest point since October 2019, when arbitrage sat at 44.07 US cents/lb.

Intra-day volatility of the I-CIP followed a consistent downtrend, reaching 6.3%, a 0.7 percentage point decrease between August and September 2023. The Robustas presented the strongest volatility decrease, with a 1.3 percentage point drop, averaging 7.4% for the month of September. The Colombian Milds’ and Other Milds’ volatility also contracted to 6.5% and 6.8%. Meanwhile, the Brazilian Naturals’ volatility dropped by 0.7 percentage points to 8.1% from August to September 2023, whilst the London futures market’s volatility also decreased by 2.1 to 7.3%. Lastly, the New York futures market’s volatility moved in the same direction as London, retracting by 0.9 percentage points and reaching 7.7% for New York.

The New York and London certified stocks moved in opposite directions, where London grew 25.7% to 0.73 million 60-kg bags, whilst certified stocks of Arabica coffee reached 0.49 million 60-kg bags, a 13.8% decrease.

The absence of market participants, as evidenced by the falling exports (see Exports by Coffee Groups – Green Beans), continued to prevail over the I-CIP, explaining the overarching trajectory of the I-CIP in September. However, currency movements, market sentiments, dwindling supplies, weather and the fundamentals all played their part in the coffee price movements in September, which saw the I-CIP rally, before falling once again due to foreign exchange movements.

From 22 August to 19 September 2023, the I-CIP recovered, increasing from a low of 148.79 to 160.17 US Cents/lb, ie, an increase of 7.6%. This came on the back of reports of heavy rain in Brazil and a continued fall in the certified stocks held at the New York ICE warehouses. Somar Meteorologia, a Brazilian meteorology company, reported on 5 September that Brazil’s Minas Gerais region, the country’s largest coffee producing region, received 22.8 mm of rain in the past week, or 308% of the historical average, leading to speculation regarding a delay in the completion of Brazil’s coffee harvest. Meanwhile, ICE’s Arabica inventories fell to a low of 0.49 million bags in September. The impact of these positive factors was more profound on the prices of the Arabicas, particularly the Brazilian Naturals which rallied by 5.3% and 81.%, respectively.

Nevertheless, this rally was halted and reversed by the sharp weakening of the real against the US dollar. From 19 to 29 September the real depreciated by 3.2%, from 4.87 to 5.03, while the I-CIP fell by 7.1% over the same period. Once again, the negative impact was felt relatively more by the Arabicas (-8.1%) and particularly the Brazilian Naturals (-9.3%) as compared with Robustas (-5.9%). The price of the Robustas fell at a relatively slower rate due to Vietnam’s current dwindling supply (see Exports by Regions – All Forms of Coffee), with supply from the 2023/24 harvest still at least two months away in November at the earliest.

Exports by Coffee Groups – Green Beans
Global green bean exports in August 2023 totalled 9.36 million bags, as compared with 9.07 million bags in the same month of the previous year, up 3.2%. As a result, the cumulative total for 2022/23 to August is 102.9 million bags, as compared with 108.26 million bags over the same period a year ago, down 5.0%.

Shipments of the Other Milds decreased by 9.7% in August 2023 to 1.99 million bags from 2.2 million bags in the same period last year. As a result, the cumulative volume of exports continued to fall, decreasing by 12.2% in the first 11 months of coffee year 2022/23 to 20.56 million bags, versus 23.42 million bags over the same period in 2021/22.

Green bean exports of the Brazilian Naturals increased in August 2023, rising by 10.2% to 3.06 million bags. For the first 11 months of coffee year 2022/23, green bean exports of the Brazilian Naturals amounted to 31.5 million bags, down 8.0% from 34.22 million bags over the same period a year ago. Changes to the fortunes of the Brazilian Naturals are mainly due to changes in Brazil’s total green bean exports, the biggest producer and exporter of the Brazilian Naturals, which also increased in August 2023 (27.6%) to 3.35 million bags from 2.63 million bags in August 2022.

Exports of the Colombian Milds decreased by 2.1% to 0.84 million bags in August 2023 from 0.86 million bags in August 2022, driven primarily by Colombia, the main origin of this group of coffee, whose exports of green beans were down 5.6% in August 2023. This is the fourteenth consecutive month of negative growth for the Colombian Milds and, as a result, the exports of this group of coffee for October 2022 to August 2023 were down 12.5%, at 9.9 million bags, as compared with 11.32 million bags in the first 11 months of coffee year 2021/22.

Green bean exports of the Robustas amounted to 3.47 million bags in August 2023, as compared with 3.22 million bags in August 2022, up 7.3%. This is the fifth consecutive month of positive growth for the Robustas and, as a result, the exports of this group of coffee for October 2022 to August 2023 were up 4.2%, at 40.94 million bags, as compared with 39.31 million bags in the first 11 months of coffee year 2021/22.

Exports by Regions – All Forms of Coffee
In August 2023, South America’s exports of all forms of coffee increased by 13.0% to 4.98 million bags. This is the first positive growth rate for the region since the 0.3% expansion in June 2022. The source of both the positive and strength of growth is Brazil, which saw its exports increase by 24.4% to 3.67 million bags from 2.95 million bags in August 2022. More specifically, it was the Robustas from the origin, which in August increased by 388.1% to 0.7 million bags from 0.14 million bags, that drove the region’s positive growth. The August 2023 exports are Brazil’s highest on record for Robusta coffee, beating the 696,873 bags exported in December 2014.

Fundamentally, the region’s turnaround is due to the recent downturn in Asia and Oceania, especially in Vietnam, the world’s largest Robusta producer and exporter. Pointedly, Brazil is the largest producer and exporter of Robustas in South America, and it has been taking advantage of the reduced volume of Robustas coming out of Vietnam. It is pertinent to note that Brazil is the fifth biggest exporter of Robustas in the world, having shipped 1.87 million bags in coffee year 2021/22 as compared with the 25.44 million bags exported from Vietnam or the 4.89 million, 4.28 million and 4.03 million bags from Uganda, India and Indonesia, respectively, the second, third and fourth largest exporters. However, in August 2023, Brazilian Robusta exports were second only to Vietnam with 1.34 million bags. To put this into perspective, in August 2023 Brazil exported the equivalent of four-and-half months’ worth of Robustas in a single month (as measured against the total Robusta exports in coffee year 2021/22).

Exports of all forms of coffee from Africa increased by 10.9% to 1.37 million bags in August 2023 from 1.23 million bags in August 2022. For the first 11 months of the current coffee year, exports totalled 10.84 million bags as compared with 12.31 million bags in coffee year 2021/22, down 1.5%. This is the third consecutive month of positive growth rate for the region. The continued global demand for Robustas, as reflected in the latest cumulative positive growth rates for Robusta green bean exports, is the fundamental source of Africa’s positive export growth rate in August. However, like the situation in South America, the reduced volume from the Asia and Pacific region, and more pointedly Vietnam, explains this growth.

Uganda, the largest producer and exporter of Robusta coffee in Africa, took the opportunity to fill the gap in the market left by Vietnam, increasing its exports by 48.4% to 0.74 million bags in August 2023 from 0.5 million bags in August 2022. This represents the second largest monthly exports on record, just behind the 0.79 million bags exported in March 1973.

In August 2023, exports of all forms of coffee from Mexico and Central America were down 2.0% to 1.23 million bags as compared with 1.26 million in August 2022. As a result, total exports are down 2.6% from October 2022 to August 2023 at 14.57 million bags, as compared with 14.96 million bags for the same period a year ago. The relatively shallow negative growth rate of the region masked the dynamic changes at the individual country level.

Two origins experienced strong positive growth rates (Honduras and Nicaragua), with a combined 37.2% increase in August 2023, while three others experienced sharp negative growth rates (Costa Rica, Guatemala and Mexico), with a combined 20.5% decrease. Honduras and Nicaragua outperformed both the region and group of coffee (Other Milds) to which they predominantly belong in August. This may reflect their competitive edge over other origins in Mexico and Central America – the average export unit value of Arabica green beans for Honduras and Nicaragua was 157 US cents/lb for coffee years 2017/18–2021/22, while it was on average 63 US cents/lb higher for the others (excluding Cuba, Haiti and Jamaica) at 220 US cents/lb.

Exports of all forms of coffee from Asia and Oceania decreased by 14.9% to 2.72 million bags in August 2023 and but were up 1.3% to 41.28 million bags in the first 11 months of coffee year 2022/23. August’s downturn was mainly due to Vietnam, with exports down 23.6% to 1.44 million bags from 1.98 million bags. This is the lowest month of August exports since the 1.4 million bags shipped in 2012. The decrease can be attributed to the depletion of available supply, reflecting the strength of its exports in the first 10 month of the current coffee year, where between October 2022 and July 2023 Vietnam shipped 25.98 million bags –3.3% higher than the same period in coffee year 2017/18, a record exporting year when the origin shipped 29.73 million bags over the full year.

Exports of Coffee by Forms
Total exports of soluble coffee decreased by 4.6% in August 2023 to 0.89 million bags from 9.3 million bags in August 2022. In the first 11 months of coffee year 2022/23, a total of 10.46 million bags of soluble coffee were exported, representing a decrease of 5.7% from the 11.09 million bags exported in the same period during the previous coffee year.

Soluble coffee’s share in the total exports of all forms of coffee for the year to date was 8.6% in August 2023, down from 9.2% for the same period a year ago. Brazil is the largest exporter of soluble coffee, having shipped 0.32 million bags in August 2023.

Exports of roasted beans were down 39.9% in August 2023 to 58,226 bags, as compared with 96,937 bags in August 2022. The cumulative total for coffee year 2022/23 to June 2023 was 0.66 million bags, as compared with 0.77 million bags in same period a year ago.

Production and Consumption
Under the current circumstances, the estimates and outlook of production and consumption for coffee years 2021/22 and 2022/23 remain the same.

World coffee production decreased by 1.4% to 168.5 million bags in coffee year 2021/22, hampered by the off-biennial production and negative meteorological conditions in a number of key origins. However, it is expected to bounce back by 1.7% to 171.3 million bags in 2022/23. Increased global fertiliser costs and adverse weather conditions are expected to partially offset the positive impact of biennial production from Brazil, explaining the relatively low rate of growth in coffee year 2022/23. The impact of biennial production is anticipated to drive the outlook for Arabica, which is projected to increase by 4.6% to 98.6 million bags in coffee year 2022/23, following a 7.2% decrease in the previous coffee year.

Reflecting its cyclical output, Arabica’s share of the total coffee production is expected to increase to 57.5% from 55.9% in coffee year 2021/22. South America is and will remain the largest producer of coffee in the world, despite suffering from the largest drop in output for almost 20 years, which fell by 7.6% in coffee year 2021/22. The recovery in coffee year 2022/23, partly driven by biennial production, is expected to push the region’s output to 82.4 million bags, a rise of 6.2%.

World coffee consumption increased by 4.2% to 175.6 million bags in coffee year 2021/22, following a 0.6% rise the previous year. Release of the pent-up demand built up during the Covid-19 years and sharp global economic growth of 6.0% in 2021 explains the sharp bounce back in coffee consumption in coffee year 2021/22. Decelerating world economic growth rates for 2022 and 2023, coupled with the dramatic rise in the cost of living, will have an impact on the coffee consumption for coffee year 2022/23. It is expected to grow, but at a decelerating rate of 1.7% to 178.5 million bags. The global deceleration is expected to come from non-producing countries, with Europe’s coffee consumption predicted to suffer the largest decrease among all regions, with growth rates falling to 0.1% in coffee year 2022/23 from a 6.0% expansion in coffee year 2021/22.

As a result, the world coffee market is expected to run another year of deficit, a shortfall of 7.3 million bags.

The outlook is taken from the newest publication of the Statistics Section of the Secretariat of the International Coffee Organization (ICO), the Coffee Report and Outlook (CRO). The full CRO can be downloaded from the ICO website: icocoffee.org. For further information, contact the Statistics Section at stats@ico.org.

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Made using premium beans which are roasted and freeze dried, Little’s says it will get you as close to a cup of specialty coffee as possible from the comfort of home, for as little as 64p a cup. With flavours ranging from Rich Hazelnut and French Vanilla to spiced Cardamom Bun and Christmas Spirit, Little’s variety offers flavour without the hefty dose of sugar.

Half of millennials and Gen-Zs regularly buy flavoured coffee out of the home (*Attest survey, 2022) and 75% of all the coffee bought in stores is instant. Ridding coffee of instant shame, Little’s wants to hack your favourite coffee shop order with a flavour-packed, sugar free option, that’s pocket-friendly too.

The company is fresh from a new rebrand and winning two Great Taste awards this year (for Little’s Smooth Colombian instant coffee and Little’s Creamy Caramel coffee pods). Here for the autumn and winter months only, Little’s brand new Pumpkin Spice infused instant coffee offers spicy nutmeg, and warming cinnamon spice, alongside rich and smooth coffee.

Coming soon to complement the full Little’s range is Toffee Nut instant coffee; with notes of toasted almonds and sweet caramel, with a smooth pick-me-up.

Little’s flavour-infused coffee is vegan friendly, 4kcals per cup and contains no added sugar. Little’s is the first instant coffee in UK supermarkets to go 100% plastic free, you’ll find the coffee packaged in bright, UK-made glass jars with UK-made aluminium lids, for freshness.

Try your way through the whole range via the Little’s web shop or take your pick from the wide selection available from Sainsbury’s, Tesco, Waitrose, Amazon, Ocado, Selfridges & Co, Harvey Nichols Harrods, Booths, Whole Foods and Holland & Barrett.

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The ICO Composite Indicator Price (I-CIP) lost 7.2% from June 2023 to July 2023, averaging 171.25 US cents/lb for the latter, whilst posting a median value of 158.4 US cents/lb. In July 2023, the I-CIP fluctuated between 155.65 and 162.64 US cents/lb.

Average prices for all group indicators decreased in July 2023, with the Colombian Milds suffering the heaviest loss, decreasing by 10.0% and averaging 190.58 US cents/lb. The Robustas, once again, performed the best, being down only 3.4% and averaging 127.58 US cents/lb. The Other Milds and the Brazilian Naturals decreased by 6.7% and 9.6%, to an average 193.49 and 159.5 US cents/lb, respectively, in July 2023. ICE’s New York and London Futures markets fell by 8.6% and 4.7% to 159.57 and 113.62 US cents/lb, respectively.

For the I-CIP and Arabicas prices, July was a month of two halves: losses followed by recoveries. Between 3 and 18 July 2023, the average Arabicas price had dropped 2.8%, falling to 176.97 US cents/lb from 182.01 US cents/lb. However, between 18 and 31 July, the average price gained 5.2% to 186.23 US cents/lb. For the I-CIP, the movements were –2.0% and 3.6%, averaging 157.96 US cents/lb and 160.11 US cents/lb, respectively. The recovery of the Arabicas and I-CIP was led by the Brazilian Naturals, which fell by 3.5% and later rose by 6.0% from an average 158.59 US cents/lb to 160.71 US cents/lb, over the same period.

The swings of the Brazilian Naturals are explained by two factors: (i) news emerging from Brazil which suggests that the current harvest is progressing ahead of schedule, versus the previous year’s rate; and (ii) the strengthening of the Real. Cooxupe, Brazil’s coffee export cooperative, reported that the origin’s harvest was 58.8% completed as of 21 July, ahead of the 52.6% completed at the same time last year, which would have exerted downward pressure on the Brazilian Naturals’ price. However, the Real reached its highest level against the US dollar in 14 months by the end of July. Moreover, it strengthened to R $4.73 on 31 July from R$4.81 on 18 July, which exerted a greater upward pressure on the Brazilian Naturals’ price that overwhelmed the downward pressure of the better harvest progress.

Differentials
The Colombian Milds-Other Milds differential contracted by 165.2% to –2.91 US cents/lb. The Colombian Milds-Brazilian Naturals and Colombian Milds-Robustas differentials both contracted 12.1% and 21.0% from June to July 2023, averaging 31.09 and 63.0 US cents/lb in July, respectively. The Other Milds-Brazilian Naturals differential was the only differential to make a gain in July 2023, increasing by 10.0%, averaging 34.0 US cents/lb. The Other Milds-Robustas and Brazilian Naturals-Robustas differentials contracted by 12.4% to 65.91 US cents/lb and by 16.9% to 45.95 US cents/lb, respectively.

The negative Colombian Milds-Other Milds differential in July 2023 was the first since February 2019, when the delta fell to –0.52 US cents/lb. The movements of coffee prices, and all goods and services, reflect their supply and demand situation. However, the narrowing and drop to negative of the Colombian Milds-Other Milds differential was, it appears, more an issue with demand. Demand for the Colombian Milds has decreased in the current coffee year to date, as expressed in monthly exports, down 2.9% and 12.8% for the first nine months, while the numbers for the Other Milds were down 2.3% and 10.6%, respectively, in the same period. At the beginning of the coffee year, the decreasing demand for the Colombian Milds reflected supply issues in Colombia, the group’s largest origin and, perhaps, a much broader price substitution.

Colombia’s output fell by 12% in October 2022, and was down 8% for the year to date in June 2023. The latter decrease appears to have been driven by both the higher price of the Colombian Milds versus the Other Milds, and the high cost of living. In October 2022, inflation in the US and Eurozone, the two biggest markets for both types of Milds, stood at 7.7% and 10.6%, respectively. Meanwhile, benchmark interest rates were raised to near zero at the beginning of calendar year 2022, but in October/November stood at 2.75% and 1.5%. These combined factors would have caused demand to shift to more competitive growths, leading to a relatively decelerated fall in price of the Other Milds as compared with the Colombian Milds and the negative differential.

Arbitrage and Volatility
Arbitrage, as measured between the London and New York Futures markets, contracted by 16.9% to 45.95 US cents/lb in July 2023 as the Robusta growth rate outstripped the New York Market. This marks the lowest point since June 2020, where arbitrage sat at 44.73 US cents/lb. Intra-day volatility of the I-CIP followed a consistent downtrend, reaching 7.8%, a 0.3 percentage point decrease between June and July 2023. The Robustas presented the only positive volatility increase among the physical prices, with a 0.8 percentage point expansion, averaging 9.0% for the month of July.

The Brazilian Naturals presented the largest decrease in volatility, falling by 0.4 percentage point to 9.1% July from June 2023, while the Colombian Milds’ and Other Milds’ volatilities contracted to 8.1% and 11.0, respectively. The volatilities in the Futures markets moved in opposite directions from one another, retracting by 0.5 and falling to 9.1% in New York, whilst the Robusta contraction increased to 9.2% in July 2023, a 1.0 percentage point increase.

The New York and London certified stocks decreased in tandem by 2.9% and 29.4%, respectively, closing in at 0.58 million 60-kg bags, whilst certified stocks of Robusta coffee reached 0.89 million 60-kg bags.

Exports by Coffee Groups – Green Beans
Global green bean exports in June 2023 totalled 9.39 million bags, as compared with 10.06 million bags in the same month of the previous year, down 6.7%. The downturn was driven by the Arabicas. This is the seventh consecutive month of decline for total exports of green beans since the start of coffee year 2022/23. As a result, the cumulative total for 2022/23 to June is 84.02 million bags, as compared with 89.88 million bags over the same period a year ago, down 6.5%.

Shipments of the Other Milds decreased by 19.3% in June 2023 to 2.32 million bags from 2.88 million bags in the same period last year. As a result, the cumulative volume of exports continued to fall, decreasing by 13.1% in the first nine months of coffee year 2022/23 to 16.23 million bags versus 18.67 million bags over the same period in 2021/22.

Green bean exports of the Brazilian Naturals fell in June 2023, decreasing by 7.6% to 2.5 million bags. For the first nine months of coffee year 2022/23, green bean exports of the Brazilian Naturals amounted to 25.76 million bags, down 10.9% from 28.9 million bags over the same period a year ago. Changes to the fortunes of the Brazilian Naturals are mainly owing to changes in Brazil’s green bean exports, the biggest producer and exporter of the Brazilian Naturals, which also fell in June 2023 (–16.6%) to 2.29 million bags from 2.75 million bags in June 2022.

Exports of the Colombian Milds decreased by 13.0% to 0.84 million bags in June 2023 from 0.97 million bags in June 2022, driven primarily by Colombia, the main origin of this group of coffee, whose exports of green beans were down 19.3% in June 2023. This is the 12th consecutive month of negative growth for the Colombian Milds and, as a result, the exports of this group of coffee for October 2022 to June 2023 were down 13.4%, at 8.18 million bags, as compared with 9.45 million bags in the first nine months of coffee year 2021/22. Green bean exports of the Robustas amounted to 3.72 million bags in June 2023, as compared with 3.51 million bags in June 2022, up 6.1%. This is the third consecutive month of positive export growth for the Robustas and, as a result, exports of this group of coffee for October 2022 to June 2023 were up 3.0%, at 33.86 million bags, as compared with 32.86 million bags in the first nine months of coffee year 2021/22. As a result, the Robustas’ share of the total green bean exports for October 2022 – June 2023 increased to 40.3% from 36.6% in the same period a year ago.

Exports by Regions – All Forms of Coffee
In June 2023, South America’s exports of all forms of coffee decreased by 15.5% to 3.65 million bags, driven by the two main origins of the region, Brazil and Colombia, whose combined exports fell by 16.6%. Brazil and Colombia saw their respective shipments of coffee decrease by 15.5% and 20.3% in June 2023, falling to 2.64 million and 0.76 million bags. Brazil’s export performance remains low, it appears, tied to relatively limited supply following two consecutive years of below-par harvests, despite the current harvest progressing ahead of schedule (see Group Indicator Prices). For Colombia, issues with local production are behind the downturn in exports for much of the current coffee year. However, there is another reason behind the decreasing exports, which now appears to be coming to the fore, and that is the impact of price substitution. Demand is switching between the Arabicas, away from the Colombian Milds, of which Colombia is the largest producer, to the Other Milds (see Differentials).

Exports of all forms of coffee from Africa decreased by 0.6% to 1.27 million bags in June 2023 from 1.28 million bags in June 2022. For the first nine months of the current coffee year, exports totalled 9.47 million bags as compared with 9.88 million bags in coffee year 2021/22, down 4.2%. The low negative growth rate of the region, however, masked dynamic changes at the individual country level. Four origins experienced positive growth rates (Burundi, Kenya, Tanzania and Uganda), with a combined 14.0% increase in June 2023, while two others experienced negative growth rates (Côte d’Ivoire and Ethiopia) with a combined 18.8% decrease. In Ethiopia, contract disputes arising out of a mismatch between the local purchasing prices and the global market prices continue to negatively impact the volume exports, with exporters withholding the coffee until the disputes are resolved. For Burundi, the origin is benefitting from the price substitution-led demand between the Colombian Milds and Other Milds, while Uganda’s 6.3% increase in June 2023 reflected the good harvest in the south-western region of the country.

In June 2023, exports of all forms of coffee from Mexico and Central America were down 4.6% to 1.86 million bags as compared with 1.95 million in June 2022. This latest month of negative growth is the sixth in the first nine months of the current coffee year. As a result, total exports are down 2.5% for October 2022 – June 2023 at 11.87 million bags, as compared with 12.17 million bags in the same period a year ago. Guatemala and Mexico were the main drivers of the negative growth in June 2023, down 16.7% and 21.6%, to 0.4 million bags and 0.28 million bags from 0.48 million bags and 0.36 million bags, respectively, in June 2022.

Exports of all forms of coffee from Asia and Oceania increased by 0.5% to 3.63 million bags in June 2023 and were up 2.9% to 35.35 million bags in the first nine months of coffee year 2022/23. Vietnam is the main source of the region’s positive growth rate, with exports for coffee year 2022/23 to date being up 6.0%, the country having shipped 24.13 million bags as compared with 22.76 million bags over the same period a year ago. The origin’s strong export performance so far reflects the ongoing high cost of living-led shift in demand towards cheaper Robustas (see Differentials for the Arabicas-Robustas delta). However, the moving 12 months’ total exports have been increasing at a decelerating rate, slowing from 12.5% in October 2022 down to 4.2% in June 2023. This suggests that the narrowing of the Arabicas-Robustas price differentials may be having an impact on the demand for coffee from Vietnam, the largest producer and exporter of Robusta coffee, with the ratio of the blend in soluble coffee swinging back towards a relatively higher use of Arabica.

Exports of Coffee by Forms
Total exports of soluble coffee decreased by 8.1% in June 2023 to 0.94 million bags from 1.02 million bags in June 2022. In the first nine months of coffee year 2022/23, a total of 8.86 million bags of soluble coffee were exported, representing a decrease of 3.2% from the 9.16 million bags exported in the same period during the previous coffee year. Soluble coffee’s share in the total exports of all forms of coffee for the year to date was 9.5% in June 2023, up from 9.2% in the same period a year ago. Brazil is the largest exporter of soluble coffee, shipping 0.34 million bags in June 2023.

Exports of roasted beans were up 11.3% in June 2023 to 72,237 bags, as compared with 71,282 bags in June 2022. The cumulative total for coffee year 2022/23 to June 2023 was 0.56 million bags, as compared with 0.61 million bags in same period a year ago.

Production and Consumption
The estimates and outlook for production and consumption for coffee years 2021/22 and 2022/23 remain the same.

World coffee production decreased by 1.4% to 168.5 million bags in coffee year 2021/22, hampered by the off-biennial production and negative meteorological conditions in a number of key origins. However, it is expected to bounce back by 1.7% to 171.3 million bags in 2022/23.

Increased global fertiliser costs and adverse weather conditions are expected to partially offset the positive impact of biennial production from Brazil, explaining the relatively low rate of growth in coffee year 2022/23. The impact of biennial production is anticipated to drive the outlook for Arabica, which is projected to increase by 4.6% to 98.6 million bags in coffee year 2022/23, following a 7.2% decrease in the previous coffee year. Reflecting its cyclical output, Arabica’s share of the total coffee production is expected to increase to 57.5% from 55.9% in coffee year 2021/22. South America is and will remain the largest producer of coffee in the world, despite suffering from the largest drop in output for almost 20 years, which fell by 7.6% in coffee year 2021/22. The recovery in coffee year 2022/23, partly driven by biennial production, is expected to push the region’s output to 82.4 million bags, a rise of 6.2%.

World coffee consumption increased by 4.2% to 175.6 million bags in coffee year 2021/22, following a 0.6% rise the previous year. Release of the pent-up demand accumulated during the Covid-19 years and sharp global economic growth of 6.0% in 2021 explains the sharp bounce back in coffee consumption in coffee year 2021/22.

Decelerating world economic growth rates for 2022 and 2023, coupled with the dramatic rise in the cost of living, will have an impact on the coffee consumption for coffee year 2022/23. It is expected to grow, but at a decelerating rate of 1.7% to 178.5 million bags. The global deceleration is expected to come from nonproducing countries, with Europe’s coffee consumption predicted to suffer the largest decrease among all regions, with growth rates falling to 0.1% in coffee year 2022/23 from a 6.0% expansion in coffee year 2021/22.

As a result, the world coffee market is expected to run another year of deficit, a shortfall of 7.3 million bags.

The outlook is taken from the newest publication of the Statistics Section of the Secretariat of the International Coffee Organization (ICO), the Coffee Report and Outlook (CRO). The CRO offers an insight into the factors moving the global coffee industry in the most recent past and draws out the potential events that may drive the industry in the near future. The full CRO can be downloaded from the ICO website: www.icocoffee.org.

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Commenting on the launch, Fabien Simon, JDE Peet’s CEO, said, “This is an important step in driving the sustainability agenda of our company and yet another sign of our leadership in innovation. We know that reducing packaging and promoting recyclability and reusability are increasing consumer needs. By providing more sustainable solutions within soluble coffee, one of the world’s most beloved and consumed beverages, we can maximise our positive contribution in decarbonising our own portfolios and the coffee market as a whole.” 

JDE Peet’s is working to reduce the amount of packaging material and associated carbon emissions, used in both manufacturing, transport, and end-of-life disposal. This new paper pack directly supports the company’s effort of minimising its carbon footprint across its entire value chain and its goal of moving towards 100% of packaging designed to be reusable, recyclable, or compostable by 2030. In line with this, in 2022, JDE Peet’s set targets validated by the Science Based Targets initiative (SBTi) to reduce emissions across scopes 1, 2 and 3. 

The new range will be available in selected markets across multiple brands of JDE Peet’s’ portfolio as of 2024. 

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Perhaps more than decaf coffee, instant coffee has the most stigma associated with it as consumers in many global markets perceive the quality to be low. And yet, instant coffee accounts for 25 percent of the coffee consumed in the world, with consumption growing at about 2 percent annually. In Brazil, instant coffee accounts for 5 percent of the total coffee consumed in the country, with consumption growing at an average of 3.5 percent per year since 2016.

The International Coffee Organization (ICO) stated in its March 2023 report that total exports of soluble coffee increased by 5.8 percent in February 2023 to 0.92 million bags from 0.87 million bags in February 2022. In the first five months of coffee year 2022/23, a total of 4.59 million bags of soluble coffee were exported, representing a decrease of 11.2 percent from the 5.09 million bags exported in the prior-year period. Soluble coffee’s share in the total exports of all forms of coffee was 10.2 percent (measured on a moving 12-month average) in February 2023, up from 10.1 percent in February 2022.

Aside from being the largest coffee producer, Brazil is also the largest exporter of soluble coffee, shipping 0.3 million bags in February 2023, per the ICO. Brazil’s instant coffee sector has incorporated new technologies and expanded its industrial capacity to help maintain its leading global position. Brazil exports soluble coffee to 100 countries, exceeding four million bags every year.

Nonetheless, the opinion of instant coffee in many major coffee-consuming markets remains low. The Brazilian Soluble Coffee Industry Association, or ABICS, is working to alter the perception of instant coffee. In November 2022, during Brazil International Coffee Week (SIC – Semana Internacional do Café), ABICS, in cooperation with the Institute of Food Technology (ITAL), announced the launch of a new methodology for quality assessment that proposes a sensory lexicon and quality grades for instant coffees.

The development of this new methodology for soluble, which uses contemporary sensory science, began in 2019 with the participation of experts from all instant coffee companies operating in Brazil as well as domestic and international consultants, using the main instant brands in the Brazilian market and abroad. The methodology, the first of its kind, assesses quality by its attributes and intensity — not by scores. This concept enables consumers to select coffees according to their preferences, including the methods of consumption. That is, consumers may choose which instant coffees are best suited for black coffee, with milk/dairy alternatives, cappuccinos, beverages or gastronomy (cooking, baking, etc.).

The need for instant coffee quality assessment

Any coffee may be turned into instant coffee, yet the soluble process itself, noted ABICS researchers, may add another layer of quality as it modifies to a certain extent the raw material flavour — that is, sometimes a strong over-extracted coffee flavour may be imparted, while other times, the flavour of the raw material may be preserved. Thus, the range of qualities for instant coffee is quite wide, and ABICS believes that the value and price of these products should vary accordingly.

However, as ABICS states in its recently released white paper, Quality Assessment of Instant Coffee: A Sensory Science Development, while roasted whole bean and ground coffee count with globally recognised grading systems, such as the Specialty Coffee Association (SCA) Cupping Protocol, instant coffee products have lacked a system to assess their quality and display it to consumers transparently. Per the report, “for that reason, consumers struggle to understand why they should pay price premiums for certain types of instant coffee. The instant coffee category has not effectively communicated to consumers about the quality diversity of instant coffees, how quality ties to the flavour they should expect and why it is fair to pay premiums for high quality.”

Coffee quality has long been assessed by expert, well-trained tasters – coffee cuppers – who grade coffee based on their appreciation of quality. However, assessment can vary greatly because there is no consensus about the level desirability or undesirability of an attribute. For example, a ‘citrus’ flavour may be positive to some, but could be negative to others, which directly impacts the coffee they purchase.

The reasoning behind the new methodology, according to ABICS, is that if consensus is achieved around the desirability or undesirability of a given attribute, it is possible to bypass the need for affective judgement by a taster and grade the quality of instant coffee based on intensity of several desirable or undesirable attributes. Therefore, grading would now be the objective of assessment, as the quality score is no longer the product of an effective assessment, rather, it is the result of the presence and intensity of several desirable or undesirable attributes in the coffee. ABICS researchers said this would allow coffee tasters to act as descriptive tasters, rating the intensity of several flavour attributes, and the score or the grade of the coffee given because of the ‘desirability weights’ of such attributes.

Furthermore, the researchers explained that applying the ‘descriptive based’ quality grading to instant has multiple advantages:

• it shows there is consensus among the instant coffee industry about what attributes are more desirable than others;
• it shows modern sensory science tools may be applied to the instant coffee category to stimulate transparent product differentiation, and
• it endows the instant coffee category with a language to speak to consumers about flavour and quality in a way they will understand.

Eliana Relvas, of ABICS, who was one of the lead developers of the methodology, said that the levels are not about quality, rather, how you apply it. “This is all for consumers — we want to communicate the descriptors to consumers to help remove the prejudice of instant coffee,” she said at the unveiling of the new methodology, adding, the attributes apply to everyone — some may like chocolatey, some nutty, some fruity, etc. It’s not about the quality, it is about the descriptors.”

The first step towards creating a descriptive-based system for instant coffee was to identify key flavour attributes in instant coffee. The second step was to identify the links between each of the key flavour attributes and perceived quality to create a ‘desirability’ weight of each attribute. The third step is to propose a testing and grading method for instant coffees, based on the intensity of key flavour attributes.

There are three category descriptors: Excelence, Premium and Classic. “ABICS decided to rename the categories so as not to imply that one category is better than the other,” said Fábio Sato, president of ABICS. (At the launch of the methodology, the category descriptor names were excellent, differentiated and conventional.)

Dr Aline Garcia of the Institute of Food Technology (ITAL), who was the scientific researcher for the new methodology, reiterated that while the methodology has some relationship to qualities, “it is really about the descriptors.”

Current and next steps

The new methodology is currently for the Brazilian market only but ABICS said it will be offered to other countries as the descriptive aspects of the system could be adapted by global organisations. There is room for growth with the methodology because the descriptors/attributes are terms that consumers understand,” said Relvas.

Six months after the launch of the new instant coffee quality assessment methodology, Sato said it is not yet fully rolled out in Brazil. ABICS is about to start training specialists in the varied Brazilian coffee industries (those who did not participate in the creation of the protocol). “We believe that it is very important that all specialists of Brazilian industries are aligned and trained on the methodology and adopt it in their respective companies.”

Sato said that ABICS together with its associates, who are present in the market with their respective brands, are now working on a project to communicate to consumers the main attributes and applications according to the methodology, by placing a quality seal on the packages.

If successful in Brazil, this new system for assessing instant coffee does have the potential to be a game changer for international soluble markets. Although ABICS has not yet defined which will be the first international market to be approached, Sato shared that the association is “in contact with some associations and entities to discuss opportunities to introduce the protocol.”

• Vanessa L Facenda joined T&CTJ in 2012 as editor. She was previously editor of Retail Merchandiser and has written for a variety of magazines including Consumer Reports, Brandweek, Adweek, Hollywood Reporter, and Specialty Food Magazine, among many others. She may be reached at: vanessa@bellpublishing.com.

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Broadly, the upward trend has the support of the fundamentals, with the global coffee market in deficit in coffee year 2021/22 and this situation expected to be repeated in coffee year 2022/23 (see Production and Consumption). The impetus behind the rally from the last days of March 2023 to the beginning of the third week of April 2023 can be attributed to the reinforcement of the support of the fundamentals from several market-driving events and announcements (see Exports by Regions – All Forms of Coffee). However, the downturn of the I-CIP, seen since the beginning of the third week of April 2023, appears mainly due to the strengthening US dollar. From 23 March to 28 April 2023, the Brazilian real (R$) moved from a low of R$5.30 on 23 March to a peak of R$4.91 on 14 April, before weakening again to an average of R$5.03 between 15 and 28 April against the US dollar.

Average prices for all group indicators increased in April 2023, with the Robustas averaging an 8.7% gain at 115.70 US cents/lb. Colombian Milds and Other Milds increased by 4.3% and 3.2%, to 234.85 and 229.56 US cents/lb, respectively, in April 2023. Brazilian Naturals lead the way amongst Arabicas, climbing 4.4% and reaching an average of 195.26 US cents/lb. The International Coffee Exchange’s (ICE) New York market expanded 6.3%, whilst the London Futures market grew 9.1% to 187.30 and 105.43 US cents/lb, respectively.

Colombian Milds-Other Milds differential presented resilient growth, rising 84.3% to 5.30 US cents/lb. Colombian Milds-Brazilian Naturals differential also gained 3.6% from March to April 2023, averaging 39.60 US cents/lb in April, whilst Colombian Milds-Robustas grew 0.3% to 119.15 US cents/lb for the same period. Conversely, Other Milds-Brazilian Naturals differential lost 2.9%, averaging 34.30 US cents/lb, whilst Other Milds-Robustas also shrank by 1.7% to 113.86 US cents/lb. With the most moderate loss, Brazilian Naturals-Robustas dropped 1.2% to 79.56 US cents/lb.

Arbitrage, as measured in between the London and New York Futures markets, expanded by 2.9% to 81.88 US cents/lb in April 2023.

Intra-day volatility of the I-CIP is stabilising and reached 8.7% with a marginal increase of 0.6 percentage points between March and April 2023. Robustas presented the strongest volatility increase, averaging 7.7% for the month of April 2023, a 1.4 percentage point expansion. Echoing this increased volatility were the New York Futures and London markets, where 0.1 and 0.8 percentage points were gained, averaging 11.1% and 7.9%, respectively, for April 2023. Whilst volatility of the Other Milds grew 0.4 percentage points to 9.2%, the Colombian Milds also increased by 0.3 percentage points to 9.0%. Lastly, Brazilian Naturals saw an 0.5 percentage point increase in volatility from March to April 2023.

The New York certified stocks decreased 7.9% from the previous month, closing in at 0.74 million 60-kg bags, whilst certified stocks of Robusta coffee reached 1.31 million 60-kg bags, representing an increase of 3.1%.

Exports by Coffee Groups – Green Beans
Global green bean exports in March 2023 totalled 10.90 million bags, as compared with 12.06 million bags in the same month of the previous year, down 9.6%. The downturn was spread across all coffee groups. As a result, the cumulative total exports of green beans for coffee year 2022/23 is decreasing at an accelerated rate, down 6.1%, as compared with the 5.2% fall recorded for the first five months of the current coffee year. The cumulative total for 2022/23 to March is 56.26 million bags, as compared with 59.92 million bags over the same period a year ago.

Shipments of the Other Milds decreased by 17.1% in March 2023 to 2.11 million bags from 2.55 million bags in the same period last year. This is the sixth consecutive month of negative growth for green bean exports of Other Milds since the start of the new coffee year. As a result, the cumulative volume of exports fell by 18.2% in the first six months of coffee year 2022/23 to 8.86 million bags versus 10.83 million bags over the same period in 2021/22.

Green bean exports of Brazilian Naturals fell in March 2023, falling by 13.5% to 3.08 million bags. For the first six months of coffee year 2022/23, green bean exports of Brazilian Naturals amounted to 18.61 million bags, down 7.8% from 20.18 million bags over the same period a year ago. Changes to the fortunes of Brazilian Naturals are mainly changes in Brazil’s green bean exports, the biggest producer and exporter of Brazilian Naturals, which also fell in March 2023 (-14.8%) to 2.78 million bags from 3.27 million bags in March 2022.

Exports of Colombian Milds decreased by 17.4% to 0.96 million bags in March 2023 from 1.17 million bags in March 2022, driven primarily by Colombia, the main origin of this group of coffee, whose exports of green beans were down 19.2% in March 2023. This is the ninth consecutive month of negative growth for Colombian Milds and, as a result, the exports of this group of coffee for October 2022 to March 2023 were down 14.7%, at 5.63 million bags, as compared with 6.60 million bags in the first six months of coffee year 2021/22.

Green bean exports of Robustas amounted to 4.74 million bags in March 2023, as compared with 4.78 million bags in March 2022, down 0.8%. In the first six months of coffee year 2022/23, 23.17 million bags of Robustas were exported as compared with 22.31 million bags in the same period in 2021/22.

Exports by Regions – All Forms of Coffee
In March 2023, South America’s exports of all forms of coffee decreased by 17.3% to 4.13 million bags, driven by the three main origins of the region, Brazil, Colombia and Peru, which saw their combined exports fall by 17.9%. The two major origins of the region, Brazil and Colombia, saw their respective shipments of coffee decrease by 14.3% and 19.2% in March 2023, falling to 3.1 million and 0.92 million bags, ie, the fourth and ninth consecutive months of negative growth, respectively.

The off-season and smaller harvests in 2020/21 and 2021/22 have been put forward as explanations for Brazil’s falling exports by Cecafé, the Brazilian Coffee Exporters Council, while in Colombia both an adverse weather-driven fall in supply and a 10% decrease in production in March 2023, continue to explain the decreasing exports.

Peru is continuing to see its exports fall at a significantly faster rate, plunging by 76.5% in March 2023. Again, erratic weather played a part in this downturn, in addition to social unrest in the main producing areas (Cajamarca, Junín and San Martín) which saw their roads blocked. However, the main culprit behind the magnitude of the fall in exports is mechanical; 4.60 million bags of all forms of coffee were exported in coffee year 2021/22, the second largest in volume on record, just behind the 4.69 million bags exported in coffee year 2011/12, increasing by 44.8% as compared with coffee year 2020/21. Moreover, for the first three months of the calendar year (January to March 2022), exports increased by 245.8% at 1.00 million bags, the largest Q1 shipment on record, and 57.4% higher than the next biggest, 0.64 million bags, recorded in 2012. Given these record breaking numbers the Q1 data for 2023 are, inevitably, suffering in comparison.

Exports of all forms of coffee from Africa decreased by 5.0% to 1.12 million bags in March 2023 from 1.18 million bags in March 2022. For the first six months of the current coffee year, exports totalled 6.35 million bags as compared with 6.33 million bags in coffee year 2021/22, up 0.3%. Côte d’Ivoire and Kenya are the main drivers behind the fall in the region’s exports, with shipments of coffee decreasing by 41.4% to 0.12 million bags as compared with 0.21 million bags in March 2022, and by 17.7% to 58,340 bags from 70,849 bags in March 2022, respectively. However, Burundi, Rwanda and Uganda served as counterweights that tempered the severity of the region’s downturn, with their exports up 86.7%, 249.2% and 2.0%, respectively.

In March 2023, exports of all forms of coffee from Mexico and Central America were down 15.4% to 1.75 million bags as compared with 2.07 million in March 2022. This latest month of negative growth is the fifth in the first six months of the current coffee year, with the only instance of positive growth seen in February 2023. As a result, for the first six months of the current coffee year, exports are down at 11.8%, totalling 5.78 million bags as compared with 6.56 million bags from October 2021 to March 2022. Of the top six origins, five saw their exports fall in March 2023, with Guatemala suffering the heaviest decline (-44.9%), while Honduras was the only major origin with positive growth (2.0%). For Honduras, the increase seen in March is the third consecutive month of expansion, following 11 straight months of decreases between February and December 2022.

Exports of all forms of coffee from Asia and Oceania increased by 0.2% to 5.03 million bags in March 2023 and were up 2.5% to 24.05 million bags in the first six months of coffee year 2022/23. Indonesia is the main driver of the latest upturn, with exports increasing by 16.0% to 0.58 million bags from 0.50 million bags in March 2022, outweighing the 1.6% and 1.1% downturns of India and Vietnam, respectively.

Indonesia’s upturn in exports seemingly came in the face of evidence to the contrary; the ICO’s latest outlook for coffee year 2022/23 projected Indonesia’s production to be growing at a slower rate than its consumption, 1.1% versus 5.1%, thereby reducing the supply available for export. Moreover, earlier in the year, the Association of Indonesia Coffee Exporters and Industries projected a 20% fall in production due to excessive rain across the coffee growing regions, while severe rainfall was seen through much of the archipelago in the first four months of 2023. The double-digit expansion of exports in March is mainly explained by the strong on-off seasonality of Indonesia’s coffee exports, which is evident in both annual and monthly data (see Graph A). Thus, the 16.0% increase in March 2023 is more a reflection of March 2022 than a statement on the current status of Indonesia’s coffee industry or the world’s demand for its coffee.

Exports of Coffee by Forms
Total exports of soluble coffee decreased by 6.5% in March 2023 to 1.05 million bags from 1.13 million bags in March 2022. In the first six months of coffee year 2022/23, a total of 5.67 million bags of soluble coffee were exported, representing a decrease of 8.8% from the 6.22 million bags exported in the same period during the previous coffee year. Soluble coffee’s share in the total exports of all forms of coffee was 10.1% (measured on a moving 12-month average) in March 2023, the same as it was in March 2022. Brazil is the largest exporter of soluble coffee, shipping 0.32 million bags in March 2023.

Exports of roasted beans were up 5.9% in March 2023 to 66,393 bags, as compared with 62,689 bags in March 2022. The cumulative total for coffee year 2022/23 to March 2023 was 358,640 bags, as compared with 399,479 bags in same period a year ago.

Production and Consumption
The estimates and outlook of production and consumption for coffee years 2021/22 and 2022/23 remain the same. World coffee production decreased by 1.4% to 168.5 million bags in coffee year 2021/22, hampered by the off-biennial production and negative meteorological conditions in several key origins. However, it is expected to bounce back by 1.7% to 171.3 million bags in 2022/23. Increased global fertiliser costs and adverse weather conditions are expected to partially offset the positive impact of biennial production from Brazil, explaining the relatively low rate of growth in coffee year 2022/23. The impact of biennial production is anticipated to drive the outlook for Arabica, which is projected to increase by 4.6% to 98.6 million bags in coffee year 2022/23, following a 7.2% decrease in the previous coffee year.

Reflecting its cyclical output, Arabica’s share of the total coffee production is expected to increase to 57.5% from 55.9% in coffee year 2021/22. South America is and will remain the largest producer of coffee in the world, despite suffering from the largest drop in output for almost 20 years, which fell by 7.6% in coffee year 2021/22. The recovery in coffee year 2022/23, partly driven by biennial production, is expected to push the region’s output to 82.4 million bags, a rise of 6.2%.

World coffee consumption increased by 4.2% to 175.6 million bags in coffee year 2021/22, following a 0.6% rise the previous year. Release of the pent-up demand built up during the Covid-19 years and sharp global economic growth of 6.0% in 2021 explains the sharp bounce back in coffee consumption in coffee year 2021/22. Decelerating world economic growth rates for 2022 and 2023, coupled with the dramatic rise in the cost of living, will have an impact on the coffee consumption for coffee year 2022/23. It is expected to grow, but at a decelerating rate of 1.7% to 178.5 million bags. The global deceleration is expected to come from non-producing countries, with Europe’s coffee consumption predicted to suffer the largest decrease among all regions, with growth rates falling to 0.1% in coffee year 2022/23 from a 6.0% expansion in coffee year 2021/22.

As a result, the world coffee market is expected to run another year of deficit, a shortfall of 7.3 million bags.

The outlook is taken from the newest publication of the Statistics Section of the Secretariat of the International Coffee Organization (ICO), the Coffee Report and Outlook (CRO). The CRO offers an insight into the factors moving the global coffee industry in the most recent past and draws out the potential events that may drive the industry in the near future. The CRO can be downloaded from the ICO website: www.icocoffee.org. For further information, contact the Statistics Section at stats@ico.org.

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Today, 15% of coffee in the world is drunk cold, with the majority of this consumed by younger people, especially Generation Z. In line with this trend, there is rising demand for products that allow people to recreate café-style cold coffee experiences in the home.

Nescafé Ice Roast is launching in China this month, with Mexico to follow. Working closely with Nestlé’s coffee business and its markets, experts at Nestlé’s coffee R&D center in Orbe Switzerland, crafted this new product from bean to cup.

Starting with 100% Robusta coffee beans, grown and produced sustainably, Nestlé’s teams tailored the roasting profile for a lightly roasted soluble coffee without harsh or bitter notes. They optimised the extraction process for a refreshing taste and clear appearance in the cup and perfected the coffee granule structure, so it dissolves quickly and easily.

Damien Tissot, head of Nestlé’s Product Technology Center Coffee in Orbe, Switzerland, said: “With Ice Roast, we’ve created a light-medium roast that’s ideal to drink cold, with a smooth texture and cocoa notes that unlocks new sensory territory. By applying an innovative mindset, our teams have created a new sensory experience in cold coffee.”

Donald Howat, global category lead for Nescafé, said: “Cold coffee is hot, with a new generation of coffee drinkers entering the category through cold. We’re really excited by this launch, because Ice Roast gives them the opportunity to enjoy an even better cup of cold coffee at home and recreate their favorite drinks.”

Other recent launches include Nescafé Black Roast, Nestlé’s most intense coffee ever, and Nescafé Roastery Collection, a super-premium soluble coffee. Currently sold in Nigeria, Nescafé Malty is an accessible 3-in-1 blend that balances Nescafé coffee with millet malt, for a rich, creamy blend suited to local tastes.

The post Nescafé launches soluble cold coffee appeared first on Tea & Coffee Trade Journal.

Average prices for all group indicators decreased in March 2023, except for the Robustas. The Colombian Milds and Other Milds decreased by 5.5% and 3.2%, to 225.23 and 222.36 US cents/lb, respectively, in March 2023. However, the Brazilian Naturals lost 4.2% whilst the Robustas gained 2.5%, reaching an average of 187.02 and 106.49 US cents/lb. The London Futures market grew 2.5% whilst ICE’s New York market shrank by 2.6%.

The Colombian Milds-Other Milds led the way, shrinking 66.8% to 2.87 US cents/lb. Similarly, the Brazilian Naturals-Robustas and Colombian Milds-Robustas differentials both lost 11.7%, reaching 80.53 and 118.74 US cents/lb in March 2023. The Colombian Milds-Brazilian Naturals echoed this loss, closing in at 38.21 US cents/lb, a 11.6% loss from the month before. Presenting a more moderate loss, the Other Milds-Robustas differential contracted by 7.9%, closing the month at 115.87 US cents/lb. Conversely, the Other Milds-Brazilian Naturals differential expanded 2.3%, reaching 35.34 US cents/lb in March 2023. The arbitrage, as measured between the New York and London Futures market, contracted 8.2%, closing in at 79.57 US cents/lb in March 2023, from 86.67 US cents/lb in February 2023.

Intra-day volatility of the I-CIP decreased 0.6 percentage points between February 2023 and March 2023, reaching 8.1%. The Brazilian Naturals’ volatility presented the strongest volatility contraction, averaging 10.3% for the month of March 2023, a 1.8 percentage point loss. Echoing this reduction in volatility were the New York Futures and London markets, where 1.6 and 0.7 percentage points were lost, averaging 11% and 7.1%, respectively, for March 2023. Whilst volatility for the Other Milds remained stable at 8.8%, the Colombian Milds decreased by 0.5 percentage points to 8.7%. Conversely, the Robustas gained 0.1 percentage point of volatility from February to March, averaging 6.3% for the latter.

The New York certified stocks decreased 6.7% from the previous month, closing in at 0.80 million 60-kg bags, whilst certified stocks of Robusta coffee reached 1.27 million 60-kg bags, representing an increase of 7.2%.

Exports by Coffee Groups – Green Beans
Global green bean exports in February 2023 totalled 7.94 million bags, versus 9.95 million bags in the prior year month, down 20.23%. The downturn was spread across all coffee groups. As a result, the cumulative total exports of green beans for coffee year 2022/23 are decreasing at an accelerated rate, down 8.5%, as compared with the 5.5% decrease observed for the first four months of the current coffee year. The cumulative total for 2022/23 to February is 43.77 million bags as compared with 47.85 million bags over the same a year ago.

Shipments of the Other Milds decreased by 16.0% in February 2023 to 1.72 million bags from 2.04 million bags in the prior-year period. This is the fifth consecutive month of negative growth for green bean exports of the Other Milds since the start of the new coffee year. As a result, the cumulative volume of exports fell by 18.5% in the first five months of coffee year 2022/23 to 6.75 million bags from 8.28 million bags over the same period in coffee year 2021/22.

Green bean exports of the Brazilian Naturals fell in February 2023, diminishing by 33.0% to 2.34 million bags. For the first five months of coffee year 2022/23, green bean exports of the Brazilian Naturals amounted to 15.4 million bags, down 7.0% from 16.61 million bags over the same year-ago period. The shifting fortunes of the Brazilian Naturals reflected the changes in Brazil’s green bean exports, the biggest producer and exporter of the Brazilian Naturals, which fell 35.4% in February 2023 to 2.11 million bags from 3.27 million bags in February 2022.

Exports of the Colombian Milds decreased by 6.8% to 0.99 million bags in February 2023 from 1.06 million bags in February 2022, driven primarily by Colombia, the main origin of this group of coffee, whose exports of green beans were down 5.7% in February 2023. As a result of the continued downturn, exports of the Colombian Milds from October 2022 to February 2023 were down by 14.1%, at 4.67 million bags, versus 5.43 million bags in the first five months of coffee year 2021/22.

Green bean exports of the Robustas amounted to 2.89 million bags in February 2023, as compared with 3.35 million bags in February 2022, down 13.7%. As a result, the shipments in the first five months of coffee year 2022/23 were down to 16.91 million bags from 17.53 million bags in the same period in coffee year 2021/22.

Exports by Regions – All Forms of Coffee
In February 2023, South America’s exports of all forms of coffee decreased by 29.8% to 3.48 million bags, driven by the three main origins of the region, Brazil, Colombia and Peru, which saw their combined exports fall by 30.7%. The two major origins of the region, Brazil and Colombia, saw their respective shipments of coffee decrease by 32.5% and 5.1% in February 2023, falling to 2.41 million bags and 0.94 million bags. Peru is continuing to see its exports fall at a significantly faster rate, plunging by 44.6% in February 2023.

Exports of all forms of coffee from Asia and Oceania decreased by 15.3% to 2.99 million bags in February 2023 and were down 5.6% to 17.4 million bags in the first five months of coffee year 2022/23. Vietnam and India are the main drivers behind the latest downturn. The former’s exports are down by 25.3% to 1.79 million bags from 2.39 million bags in February 2022, while the latter’s also fell 9.5% to 0.49 million bags from 0.54 million bags in the same period.

Exports of all forms of coffee from Africa increased by 2.2% to 1.02 million bags in February 2023 from 1.0 million bags in February 2022. For the first five months of the current coffee year, exports totalled 5.23 million bags as compared with 5.15 million bags in coffee year 2021/22, up 1.4%.

Uganda is the main driver behind the jump in the region’s exports, with shipments of coffee increasing by 6.6% to 0.48 million bags as compared with 0.45 million bags in February 2022. Burundi, Côte d’Ivoire and the Democratic Republic of Congo are three other origins of note for February 2023, with their exports up 62.5%, 18.1% and 30.0%, respectively, adding to Uganda’s upward impetus within the region. Kenya was another notable origin in February 2023, though for different reasons, with exports down 43.5%.

In February 2023, exports of all forms of coffee from Mexico and Central America were up 2.4% to 1.42 million bags as compared with 1.39 million in February 2022. For the first five months of the current coffee year, however, exports remain down 10.1%, totalling 4.03 million bags as compared with 4.48 million bags in October–February 2021/22. However, the region’s latest export results broke the four consecutive months of negative growth thanks to Costa Rica (up 6.2%), Dominican Republic (up 95.6%), El Salvador (up 12.9%) and Nicaragua (up 35.1%).

Exports of Coffee by Forms
Total exports of soluble coffee increased by 5.8% in February 2023 to 0.92 million bags from 0.87 million bags in February 2022. In the first five months of coffee year 2022/23, a total of 4.59 million bags of soluble coffee were exported, representing a decrease of 11.2% from the 5.09 million bags exported in the same period during the previous coffee year. Soluble coffee’s share in the total exports of all forms of coffee was 10.2% (measured on a moving 12-month average) in February 2023, up from 10.1% in February 2022. Brazil is the largest exporter of soluble coffee, shipping 0.3 million bags in February 2023.

Exports of roasted beans were up 6.2% in February 2023 to 50,140 bags, versus 47,212 bags in February 2022. The cumulative total for coffee year 2022/23 to February 2023 was 292,247 bags, as compared with 336,790 bags in same period a year ago.

Production and Consumption
World coffee production slipped by 1.4% to 168.5 million bags in coffee year 2021/22, hampered by the off-biennial production and negative meteorological conditions in several key origins. However, it is expected to bounce back by 1.7% to 171.3 million bags in 2022/23.

Increased global fertiliser costs and adverse weather conditions are expected to partially offset the positive impact of biennial production from Brazil, explaining the relatively low rate of growth in coffee year 2022/23. The impact of biennial production is anticipated to drive the outlook for Arabica, which is projected to increase by 4.6% to 98.6 million bags in coffee year 2022/23, following a 7.2% decrease the previous coffee year.

Reflecting its cyclical output, Arabica’s share of the total coffee production is expected to increase to 57.5% from 55.9% in coffee year 2021/22. South America is and will remain the largest producer of coffee in the world, despite suffering from the largest drop in output for almost 20 years, which fell by 7.6% in coffee year 2021/22. The recovery in coffee year 2022/23, partly driven by biennial production, is expected to push the region’s output to 82.4 million bags, a rise of 6.2%.

World coffee consumption increased by 4.2% to 175.6 million bags in coffee year 2021/22, following a 0.6% rise the previous year. Release of the pent-up demand built-up during the Covid-19 years and sharp global economic growth of 6.0% in 2021, explains the bounce back in coffee consumption in coffee year 2021/22.

Decelerating world economic growth rates for 2022 and 2023, coupled with the dramatic rise in the cost of living, will have an impact on the coffee consumption for coffee year 2022/23. It is expected to grow, but at a decelerating rate of 1.7% to 178.5 million bags. The global deceleration is expected to come from non-producing countries, with Europe’s coffee consumption predicted to suffer the largest decrease among all regions, with growth rates falling to 0.1% in coffee year 2022/23 from a 6.0% expansion in coffee year 2021/22.

As a result, the world coffee market is expected to undergo another year of deficit, with a shortfall of 7.3 million bags.

This outlook is taken from the newest publication of the Statistics Section of the Secretariat of the International Coffee Organization (ICO), the Coffee Report and Outlook (CRO). The CRO offers an insight into the factors moving the global coffee industry in the most recent past and draws out the potential events that may drive the industry in the near future. For further information on the CRO, please contact the Statistics Section at stats@ico.org.

For the full report, visit: icocoffee.org.

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The I-CIP lost 0.1% from December 2022 to January 2023, averaging 156.95 US cents/lb for the latter, whilst posting a median value of 155.54 US cents/lb. In January 2023, the I-CIP fluctuated between a minimum and maximum of 145.54 and 174.95 US cents/lb, whilst opening the month at 157.31 and ending January on 174.95 US cents/lb.

Average prices for all group indicators remained stable, with a slight decrease in January 2023. The Colombian Milds and Other Milds decreased by 2.3% and 1.7%, to 218.91 and 206.76 US cents/lb respectively, in January 2023. However, the Brazilian Naturals and the Robustas gained 0.6% and 2.4%, reaching an average of 170.03 and 95.98 US cents/lb. The London Futures market grew 2.2% whilst ICE’s New York market shrank by 3.9%.

Across the board, price differentials shrank, with the Colombian Milds-Other Milds and Colombian Milds-Brazilian Naturals differentials leading the way by shrinking 12.5% and 11.3% to 12.15 and 48.88 US cents/lb, respectively. The Other Milds-Brazilian Naturals differential also lost 10.9%, averaging 110.78 US cents/lb for the month of January 2023. Presenting more moderate losses, the Colombian Milds-Robustas and Other Milds-Robustas differentials declined by 5.7% and 4.9%, closing the month at 122.93 and 100.78 US cents/lb. The Brazilian Naturals-Robustas differential also presented a moderate loss of 1.6% from December 2022 to January 2023, reaching 74.05 US cents/lb.

The arbitrage, as measured between the New York and London Futures market lost 10.1%, closing in at 73.97 US cents/lb in January 2023, from 82.26 US cents/lb in December 2022.

Intra-day volatility of the I-CIP decreased 0.5 percentage points between December 2022 and January 2023, reaching 8.6%. Robustas and the London Futures market were the least volatile amongst all group indicators, at 6.0% and 6.8%, respectively, in January 2023. The Brazilian Naturals’ volatility was the highest amongst the group indicators, averaging 12.7%, a 0.6 percentage point increase from the previous month. The variation in volatility of the Colombian Milds and Other Milds for December 2022 to January 2023 is -2.4 to 9.2% and -0.8 to 8.9%, respectively. The variation of the New York Futures market’s volatility contracted 0.2 percentage points, averaging 12.3% for the month of January 2023.

The New York certified stocks increased by 4.3% from the previous month, closing in at 0.91 million 60-kg bags, whilst certified stocks of Robusta coffee reached 1.04 million 60-kg bags, representing a decrease of 3.8%.

Exports by Coffee Groups – Green Beans
Global green bean exports in December 2022 totalled 9.81 million bags, as compared with 10.64 million bags in the same month of the previous year, down 7.7%. The downturn was spread across all coffee groups except for the Robustas, which recorded a marginal gain of 1.1%. As a result, the cumulative total exports of green beans for coffee year 2022/23 are down 1.1% as compared with 2.4% increase for the first two months of the current coffee year. The cumulative total for 2022/23 to December is 27.26 million bags as compared with 27.67 million bags over the same a year ago, down 1.5%.

Shipments of the Other Milds decreased by 24.8% in December 2022 to 1.24 million bags from 1.65 million bags in the same period last year. This is the third consecutive month of negative growth for green bean exports of the Other Milds since the start of the new coffee year. As a result, the cumulative volume of exports fell by 17.8% in the first three months of coffee year 2022/23 to 3.54 million bags from 4.3 million bags over the same period in coffee year 2021/22. The latest downturn is primarily driven by Honduras and Peru, down 33.7% and 41.4%, respectively in December 2022 as compared with December 2021.

Green bean exports of the Brazilian Naturals also declined in December 2022, falling by 10.3% to 3.24 million bags, following a 15.2% increase in November 2022. For the first three months of coffee year 2022/23, green bean exports of the Brazilian Naturals amounted to 10.32 million bags, up 5.8% from 9.76 million bags over the same period a year ago. Not surprisingly, the shifting fortunes of the Brazilian Naturals reflected the changes in Brazil’s green bean exports, the biggest producer and exporter of the group, which also fell in December 2022 (down 14%) as compared with November 2022 (up 15.5%).

Green bean exports of the Colombian Milds decreased by 7.5% to 1.08 million bags in December 2022 from 1.18 million bags in December 2021, driven primarily by Colombia, the main origin of this group of coffee, whose exports of green beans were down 11.8% in December 2022. As a result of the sharp downturn, exports of the Colombian Milds from October to December 2022 were down by 12.7%, at 2.85 million bags, as compared with 3.27 million bags in the first three months of coffee year 2021/22.

Green bean exports of Robustas amounted to 4.25 million bags in December 2022, as compared with 4.21 million bags in December 2021, up 1.1%, continuing to build on the 2.6% increase in November 2022. The two consecutive months of positive growth meant that shipments in the first three months of coffee year 2022/23 were up 2.0% to 10.55 million bags from 10.34 million bags in the same period in coffee year 2021/22.

Exports by Regions – All Forms of Coffee
In December 2022, South America’s exports of all forms of coffee decreased by 17.3% to 4.64 million bags. The two major origins of the region, Brazil and Colombia, saw their respective shipments of coffee fall by 15.2% and 11.0% in December 2022, falling to 3.21 million bags and 1.05 million bags, respectively, from 3.79 million bags and 1.18 million bags in December 2021. Ecuador and Peru, however, saw their volume of exports fall by nearly half, plunging by 45.2% and 41.5%, respectively. For Colombia, the sharp downturns continue to be linked to local production conditions. Persistent bad weather linked to the La Niña phenomenon caused Colombia’s December 2022 coffee output to drop by 29%, the country’s fourth consecutive month of negative growth, with a consequent impact on exports.

In Peru, weather-driven elongation of the current harvesting period and intermittent rains hampering the drying process, both of which negatively affect the quality of dried beans, have been affecting the supply of coffee beans since the beginning of the 2022/23 season. However, since the beginning of the last month of 2022, social unrest in the country may have added to supply problems, leading to December 2022 having the lowest volume of exports since 2015, when only 310,000 bags were shipped from Peru. As for Ecuador, the sharp fall in December 2022 can be attributed to the previous anomalous growth in December 2021, when the export volume of all forms of coffee increased by 164.4%. The 57,599 bags of coffee exported in December 2022 is in line with the current trend and previous volumes for the month, averaging 57,508 bags in 2016–2020.

Exports of all forms of coffee from Asia and Oceania increased by 4.2% to 4.59 million bags in December 2022 and were up 2.0% to 6.57 million bags in the first three months of coffee year 2022/23. The region’s increase is explained by Vietnam (up 16.4%), the largest producer and exporter of coffee from Asia and Oceania, which shipped 3.38 million bags in December 2022. However, the region’s relatively small increase was due to the 39.0% decrease in exports of the region’s third-largest exporter, India, which shipped only 0.42 million bags as compared with 0.68 million bags in December 2021. It was also the fifth consecutive month of negative growth for the origin’s exports. The downturn is to be expected, however, as coffee year 2021/22 was a record-breaking year for India, with the origin shipping 7.24 million bags as compared with 5.95 million bags in coffee year 2020/21.

Exports of all forms of coffee from Africa decreased by 9.0% to 0.97 million bags in December 2022 from 1.13 million bags in December 2021. For the first three months of the current coffee year, exports totalled 3.17 million bags as compared with 3.22 million bags in coffee year 2021/22, down 1.4%. Uganda is the main driver behind the fall in the region’s exports, with shipments of coffee from the region’s largest producer and exporter falling by 21.9% to 0.42 million bags as compared with 0.54 million bags in December 2021.

This is now the 12th consecutive month of decline for Uganda, with its cumulative total exports from January to December 2022 having amounted to 5.63 million bags, as compared with 6.77 million bags over the same period a year ago (January–December 2021), equating to a 20.25% or 1.14 million bag decrease. Drought in most of the coffee growing regions, leading to a lower and shorter main harvest season in central and eastern parts of Uganda and hence lower output, is continuing to hamper Ugandan coffee exports. As noted previously, Africa’s export performance is not entirely hindered by Uganda, with Côte d’Ivoire (up 69.4% to 0.19 million bags), Kenya (up 33.2% to 0.12 million bags) and Tanzania (up 18.6% to 0.34 million bags), giving the region tremendous uplifts in the first three months of coffee year 2022/23.

In December 2022, exports of all forms of coffee from Mexico and Central America were down 15.2% to 0.69 million bags, as compared with 0.81 million in December 2021. For the first three months of the current coffee year, exports were also down 15.2%, totalling 1.55 million bags as compared with 1.83 million bags in October–December 2021/22. The region’s latest decline, the third consecutive month since the start of coffee year 2022/23, is mainly a reflection of Honduras, the largest exporter and producer of the region, with a 33.7% decrease (99,918 bags) in exports in December 2022. Two reasons explain the latest fall for Honduras: (i) continuing struggles with leaf-rust, or roya, affecting the origin’s harvests for coffee year 2022/23; and (ii) a technical downturn reflecting a 46.3% increase in December 2021. Costa Rica, Guatemala and Nicaragua were the region’s other major origins making negative contributions to Mexico and Central America’s exports in December 2022, decreasing by 23.3% (31,848 bags), 20.7% (87,100 bags) and 35.1% (103,290 bags), respectively.

Exports of Coffee by Forms
Total exports of soluble coffee decreased by 15.9% in December 2022 to 0.98 million bags from 1.17 million bags in December 2021. In the first three months of coffee year 2022/23, a total of 2.8 million bags of soluble coffee were exported, representing a decrease of 13.6% from the 3.25 million bags exported in the same period during the previous coffee year. Soluble coffee’s share in the total exports of all forms of coffee was 9.0% (measured on a moving 12-month average) in December 2022, down from 9.1% in December 2021.

Brazil is the largest exporter of soluble coffee, shipping 0.34 million bags in December 2022, followed by India with 0.22. Exports of roasted beans were up 4.7% in December 2022 to 75,852 bags, as compared with 72,446 bags in December 2021. The cumulative total for coffee year 2022/23 to December 2022 was 208,975 bags, as compared with 221,554 bags in the same period a year ago, down 5.7%.

Production and Consumption
The latest provisional estimate for total production in coffee year 2021/22 remains unchanged at 167.2 million bags, a 2.1% decrease as compared to 170.83 million bags in the previous coffee year. World coffee consumption is projected to grow by 3.3% to 170.3 million 60-kg bags in 2021/22 as compared to 164.9 million for coffee year 2020/21. In 2021/22, consumption is estimated to exceed production by 3.1 million bags. The ICO will be publishing shortly new consolidated revised values for production and consumption for 2021/22.

For more information or the full report, visit the ICO’s new website: icocoffee.org.

The post Coffee prices stabilised in January, with a slight decrease appeared first on Tea & Coffee Trade Journal.

Average prices for all group indicators decreased in July 2022. The Brazilian Naturals fell the most, dropping 6.8% from June to July 2022, sinking to an average 214.8 US cents/lb for the month. The Colombian Milds and Other Milds, decreased by 5.1% and 6.5% respectively, month-on-month in July.

The former averaged 286.07 US cents/lb in July 2022, whilst the latter averaged 255.91 US cents/lb. The downturns are in part due to the average second and third positions of the New York futures market, which fell by 8.1% in July 2022 over June 2022. The average of the second and third positions of the ICE Futures Europe for the Robustas decreased by 5.2%. This is reflected in the relatively lower rate of fall of the Robustas group indicator in July 2022, dropping down to an average 100.44 US cents/lb from 103.81 US Cents/lb in June, a 3.2% month-on-month decline.

All the Arabicas lost ground against the Robustas in July 2022. The Brazilian Naturals suffered the biggest loss, with the differential falling by 9.7% month-on-month to 114.36 US Cents/lb from 126.59 US Cents/lb. The Colombian Milds fared the best against the Robustas, despite the differential narrowing by 6.1% to 185.63 US Cents/lb in July 2022 from 197.76 US Cents/lb in June 2022. Against the other Arabicas, on-the-other-hand, the Colombian Milds made second and third consecutive months of gain, increasing the differential to the Other Milds and Brazilian Naturals by 8.2% and 0.1%, to 30.16 US Cents/lb and 71.27/lb, respectively.

The arbitrage between the New York and London Futures markets shrunk by 10.1%, falling to 121.24 US Cents/lb in July 2022 from 134.90 US cents/lb in June 2022.

Intra-day volatility of the I-CIP decreased 1.1 percentage point between June and July 2022, reaching 10.1%. Robustas and the London futures market presented the lowest volatility amongst all group indicators, at 6.3% and 6.4% in July 2022. The Brazilian Naturals volatility was the highest amongst the groups, averaging 12.3%, a 1.2 percentage point drop from the previous month. The variation in volatility of the Colombian Milds and Other Milds for June to July 2022 is -0.6 to 9.6% and -0.2 to 10.8%, respectively. The volatility of the New York futures market gained by 0.2 percentage points, averaging 13.5% for the month of July 2022.

The New York certified stocks decreased 11.2% from the previous month, closing in at 1.03 million bags whilst certified stocks of Robusta coffee reached 1.76 million bags, representing an increase of 2.9%.

Global exports of green beans in June 2022 totalled 10.03 million bags, compared with 9.95 million bags in the same month of the previous year, up 0.8%. Three out of the four groups also increased their exports in June 2022, with only the Other Milds recording a fall, dropping by 13.5%. Despite the double-digit increase in June, for the first nine months of coffee year 2021-22 exports of green beans totalled 89.09 million bags, up only 0.1% as compared with 89.04 million bags for the same period in coffee year 2020-21.

The Brazilian Naturals have continued their recovery, first seen in May 2022, in June, up 12.0% at 3.19 million bags as compared with 2.84 million bags in June 2021. The recovery is driven by Brazil, the biggest producer and exporter of the Brazilian Naturals, as the container and shipping issues it faced earlier in the current coffee year continue to be resolved. In May and June 2022, exports of green beans in Brazil increased by 6.2% and 2.3%, respectively, following 10 consecutive months of negative growths. Nevertheless, exports of the Brazilian Naturals remain 6.8% down for the first nine months of coffee year 2021-22 at 29.08 million bags from 31.22 million bags in the same period a year ago, down 8.9%.

Exports of the Colombian Milds increased by 8.9% to 0.98 million bags in June 2022 versus 0.9 million bags in June 2021, driven primarily by Colombia, whose exports of green beans were up 5.4% in June 2022. Despite the jump, exports of the Colombian Milds from October 2021 to June 2022 remain down by 2.3% at 9.5 million bags as compared with 9.71 million bags in the first nine months of coffee year 2020-21. The sharp increase in the growth of the Colombian Milds is technical, reflecting the 21.0% drop in exports in June 2021, which in turn was due largely to the spill-over of the social unrest occurring throughout Colombia in May, which hampered the normal flow of exports.

Shipments of the Other Milds decreased by 13.5% in June to 2.343 million bags from 2.7 million bags in the same period last year. For the first nine months of coffee year 2021-22, exports of the Other Milds were 17.79 million bags as compared with 17.33 million bags in October 2020 to June 2021, a 2.7% increase. Exports of Robustas totalled 3.52 million bags in June 2022, as compared with 3.5 million bags in June 2021, up 0.5%. Exports of green beans for the first nine months of the current and previous coffee years for Robustas were 32.72 million bags and 30.77 million bags, respectively, up 6.3%.

In October 2021 to June 2022, South America’s exports of all forms of coffee decreased by 8.5% to 42.26 million bags. During this period, shipments from Brazil declined by 14.2% to 29.5 million bags from 34.4 million bags in October 2020 to June 2021. Continuing issues with availability of containers and shipping capacity, albeit with reported improvements in recent months, and a smaller crop harvested during its Arabica ‘off-season’, are the main reasons for the sharp fall. The volume of exports from Colombia is down 1.6% for the first nine months of coffee year 2021-22 at 9.24 million bags, versus 9.4 million bags for the same period last year. The fall in exports is linked to persistent unfavourable weather conditions reducing the available coffee supply in the country.

Exports of all forms of coffee from Asia and Oceania increased by 9.4% to 3.61 million bags in June 2022, and by 17.3% to 34.38 million bags in the first nine months of coffee year 2021-22. During these same periods, Vietnam’s exports increased by 12.9% to 2.36 million bags, and 20.0% to 22.77 million bags, respectively. India’s shipments were down 1.3% to 0.63 million bags in June 2022, but up 31.0% to 5.54 million bags in the first nine months of coffee year 2021-22. Exports from Indonesia increased by 15.8% to 0.52 million bags in June 2022 but were down 2.0% to 5.01 million bags in October 2021 to June 2022.

Exports of all forms of coffee from Africa decreased by 2.4% to 1.36 million bags in June 2022 from 1.39 million bags in June 2021. For the first nine months of the current coffee year, exports totalled 10.01 million bags as compared with 10.22 million bags in coffee year 2020-21. Uganda’s exports have continued to fall, decreasing by 14.6% in June 2022 and 5.4% in October 2021 to June 2022 as compared with the same period a year ago. Lower production stemming from droughts in some parts of the country’s coffee-growing regions also continues to explain the fall in Uganda’s coffee exports. Exports from Tanzania were down 2.3% in the first nine months of coffee year 2021-22 at 0.83 million bags as compared with 0.85 million bags for the same period last year. Over the same period, exports from Ethiopia increased 14.5% to 2.75 million bags from 2.4 million bags.

In June 2022, exports of all forms of coffee from Mexico and Central America were down 16.9% to 1.81 million bags as compared with 2.18 million in June 2021. For the first nine months of the current coffee year, exports are down 3.7%, totalling 12.12 million bags as compared with 12.58 million bags in October 2020 to June 2021. The region’s sharp downturn in June was due to the 33.5% fall in exports from Honduras, the largest exporter of the region, which shipped 0.52 million bags in June 2022 as compared with 0.78 million bags in June 2021.

For the first nine months of coffee year 2021-22, Honduras exported 3.85 million bags, down 15.5% from 4.56 million bags in the same period in coffee year 2020-21. Less rainfall during the bean-filling period across several growing regions, a high incidence of rust disease because of hurricanes Eta and Iota in 2020, and stumping following an earlier outbreak of rust disease in 2012 led renewal that reached peak production between the 2018-2020 harvests; hence the country’s coffee supply continues to negatively affect exports from Honduras.

Total exports of soluble coffee increased by 7.6% in June 2022 to 1.01 million bags versus 0.94 million bags in June 2021. In the first nine months of coffee year 2021-22, a total of 9.05 million bags of soluble coffee were exported, representing an increase of 4.3% from the 8.68 million bags exported in the same period during the previous coffee year. The share of soluble coffee within the total exports of all forms of coffee was 10.0% (measured on a moving 12-month average) in June 2022, the same as in June 2021. Brazil is the largest exporter of soluble coffee, shipping 2.96 million bags in the first nine months of coffee year 2021-22, followed by India with 1.6 million bags. Indonesia takes third place with 1.25 million bags exported over the same period.

Exports of roasted beans decreased by 11.2% in June 2022 to 72,472 bags, down from 81,610 bags in June 2021.

The latest provisional outlook for total production in coffee year 2021-22 remains unchanged at 167.2 million bags, a 2.1% decrease as compared to 170.83 million bags of the previous coffee year.

World coffee consumption is still projected to grow by 3.3%, to 170.3 million 60-kg bags in 2021-22 as compared to 164.9 million for coffee year 2020-21. In 2021-22, consumption is expected to exceed production by 3.1 million bags.

For the full report, visit: ico.org.

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Market for roasted coffee 2021: increase in food retail sales, pandemic-related decline out-of-home

The positive development in 2021 is primarily the result of increased sales of roasted coffee in the food retail sector. Working from home and lockdown caused the consumption of roasted coffee at home, with friends, family and acquaintances, to increase by 2.1% (plus 7,900 tons).

“We are a coffee nation. Coffee is crisis-proof and remains Germans’ favourite drink. In 2021, even more coffee was consumed than in previous years. The places of consumption have shifted further due to the pandemic,” says Holger Preibisch, CEO of the German Coffee Association.

In the second year of the pandemic, the decline in the out-of-home coffee market continued, but at a lower level than in 2020. The out-of-home segment lost 5.7% (minus 5,800 tons of roasted coffee) compared to the previous year. The greatest losses record (hotel) restaurants (minus 25%), cafes (minus 15%) and kiosks (minus 14%). Profits were shown by i.a. coffee shops (plus 25%), fast-food outlets/restaurants (plus 61 %) and bakeries (plus 3%).*

In total, the coffee market in 2021 (excluding the soluble coffee segment) showed an increase of 0.4% (plus 2,100 tons of roasted coffee), since the losses out-of-home were more than compensated by the growth of the coffee consumption at home.

Roasted coffee consumption at home: “whole bean” biggest growth driver

In 2021 growth drivers for coffee preparation at home were whole beans. They’re primarily used for preparation with fully automatic coffee machines or portafilter machines. The segment grew by 11.1% and achieved a market share of 41%. This brings “whole beans” closer to R&G coffee. This remained Germans’ favourite – with a market share of 47%.

“Today, every third household in Germany has a fully automatic coffee machine. Distribution grew by around 20% from 2019 to 2021.** Lockdown and working from home led to increased coffee consumption and the purchase of new coffee machines,” says Preibisch. “The pandemic is therefore a motivator for fresh and uncomplicated enjoyment with the push of a button.“

The coffee preparation with pads and capsules was also popular in 2021, despite occasional reductions. The consumption of coffee capsules remained stable. Their market share lasted unchanged at 5.3%. With a market share of 6.8%, coffee pods were still in demand. However, their sales fell by 6.1% compared to 2020.

Sales of soluble coffee in food retail: strong increase of single portions

Soluble coffee in its different forms for preparation at home were again very popular in 2021. Sales in food retail increased in all areas compared to 2020. Especially the single portion sticks with milk and/or sugar, also known as „X in 1“***, recorded significant gains of 15.4%. Soluble mixed drinks, e. g. “cappuccino type”, rose by 1.6%. Pure soluble coffee achieved a plus of 0.7%.

“We are looking positively into the future for 2022,” says Preibisch. “The level of consumption out-of-home was at the pre-corona level in the third quarter. This shows that the consumer is just waiting to drink coffee in the catering sector again. With the recent political easing measures, we therefore expect fulminant coffee consumption out-of-home in 2022.”

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Collaborating closely with the company’s coffee business, Zone EMENA and the UK market – where the new range is now on sale – experts at the Nestlé’s coffee research and development center in Orbe, Switzerland and Marysville, USA developed innovative approaches to roasting for this range, plus recipes and packaging – all within an eight-month timescale from idea to launch.

The experts worked tirelessly to perfect different roasting profiles for the Arabica and Robusta beans used in the two new blends, experimenting with roasting levels and roasting times. ‘The Light Roast’ has a smoother, more delicate taste, with notes of caramelised honey and toasted biscuit, while ‘The Dark Roast’ is bold and intense, with notes of dark chocolate and roasted nut.

The coffee beans are grown and produced in a sustainable way that benefits coffee farmers and the environment, and are packaged in aluminium tins that are 100% recyclable and plastic free – to support Nestlé’s 2025 packaging commitment.

Damien Tissot, head of Nestlé Product Technology Center Beverage in Orbe, said: “Nescafé Gold Blend Roastery Collection delivers amazing new taste profiles, due to an innovative roasting process that allows us to emphasize the natural taste of the different beans and use them in our blends, fitting the current trend towards specialty coffee. The plastic-free packaging is another proof of our commitment to delivering sustainable innovation for all Nestlé coffee brands.”

Don Howat, global category leader for Nescafé, said: “This is a great concept based on really strong consumer insight. The range was developed in record time and we’re excited to be launching in the UK, then quickly rolling out to other markets. Fantastic teamwork!”

Two additional soluble coffee innovations have also just launched in the UK. Nescafé Azera Craft Coffee, the UK’s first craft coffee in instant format, and Nescafé Azera My Way Latte, the market’s first instant latte that can be prepared using a choice of milk or plant-based milk alternatives.

Discover how Nestlé is ‘Raising the Bar in Coffee‘ across its entire portfolio, in this recent feature written by chief technology officer, Stefan Palzer. And find out how Nestlé is pioneering new lower-carbon coffee plant varieties for distribution to farmers.

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In 2017, Finlays acquired Aspen Beverage Group for its decades of dynamic leadership in cold brew extraction, positioning Finlays as a leader in the cold brew coffee market. Combining Aspen’s legacy capabilities and Finlays’ spirit of continuous innovation, Finlays is now also able to offer cold brew soluble coffee to the industry, with an unparalleled portfolio to assist brands in developing their ideal cold brew coffee product solution.

“The ability to offer cold brew soluble coffee in addition to our 100% pure cold brew extracts to our valued customers from our San Antonio facility, has further expanded our presence as a trusted and innovative partner. We are excited to support our customers locally, nationally and internationally through our increased portfolio and capabilities,” said Dan Weingart, vice president of retail sales and innovation.

Through experienced product knowledge, strong global partnerships, and nimble, customised and innovative coffee solutions, Finlays Americas will continue to support a thriving local and national coffee community, offering brand owners an unparalleled coffee portfolio to help strengthen their product offerings.

Finlays, part of Swire Group, is an independent B2B supplier of tea, coffee and botanical solutions to beverage brand owners worldwide. Founded in 1750, Finlays now has locations worldwide including manufacturing and sales offices located throughout North and South America. Today, with deep roots across the globe and unparalleled experience and expertise, no-one is better placed to unleash the potential of natural beverages by helping brand owners to bring the best from bush to cup.

For more information, visit: www.finlays.net.

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In June 2020, the ICO composite indicator averaged 99.05 US cents/lb, 5.2% lower than in May. This is the first time since October 2019 that the ICO composite indicator has fallen below 100 cents/lb and the third consecutive month of decrease. The daily price of the ICO composite indicator spent more than half of the month below 100 US cents/lb, ranging between a low of 96.79 US cents/lb on 25 June and 101.27 US cents/lb on 8 June. Despite strong exports in the first half of the coffee year, the ongoing bearish outlook for demand, as global economic growth was further revised downwards in June by the International Monetary Fund, and expectations for a large harvest in Brazil put downward pressure on prices in June.

All Arabica group indicators trended downwards in June 2020, but prices for Robusta averaged 64.62 US cents/lb, 0.1% higher than in May 2020. Prices for Brazilian Naturals fell by 9% to 92.56 US cents/lb, as harvesting of Brazil’s on-year Arabica crop is well underway with minimal impact so far from covid-19. Additionally, shipments from the second largest exporter of Brazilian Naturals, Ethiopia, have remained strong in the last five months, signalling ample supply. Colombian Milds fell by 5% to 147.16 US cents/lb, and Other Milds by 5.6% to 141.52 US cents/lb. As a result, the differential between Colombian Milds and Other Milds increased by 10.2% to 5.64 US cents/lb.

The New York Arabica futures market fell by 7.5% to an average of 99.50 US cents/lb in June 2020 while the London Robusta futures market rose by 0.2% to 54.77 US cents/lb. As a result, the spread between Arabica and Robusta coffees, as measured on the New York and London futures markets, fell to 44.73 US cents/lb, which is 15.4% lower than in May. Certified Arabica stocks decreased by 5.6% month-on-month to 1.9 million bags in May 2020, which is the fifth consecutive month of decline. Certified Robusta stocks decreased for the fourth consecutive month, reaching 2.02 million bags in June, 7.3% lower than in May. The volatility of the ICO composite indicator decreased by 1.6 percentage points to 6.1% over the past month. The volatility of all group indicators fell in June 2020. Other Milds decreased by 2.8 percentage points to 5.8%, Colombian Milds by 2 percentage points to 5.6% and Brazilian Naturals by 1.6 percentage points to 8.7%. The Robusta group indicator volatility was 6.6%, a decrease of 0.2 percentage points from May 2020.

Global shipments in May 2020 fell by 14.6% to 10.49 million bags, as exports from all coffee groups decreased. However, this volume is the third highest on record for the month of May and follows unusually high shipments last year. Exports of Arabica decreased by 19.7% to 6.43 million bags. Shipments of Colombian Milds fell by 13.4% to 999,000 bags. This is due largely to a decline of 13.1% to 894,000 bags for exports from Colombia. Compared with May 2019, shipments of Other Milds decreased by 14.4% to 2.61 million as volumes fell for the five largest exporters of this type of coffee, notably Honduras where exports declined by 20.9% to 730,000 bags. Exports of Brazilian Naturals decreased by 25.7% to 2.82 million bags. Brazil’s green Arabica shipments fell by 27.3% to 2.2 million bags, reflecting the biennial downturn of its 2019/20 crop. However, Ethiopia’s exports rose by 7.8% to 381,000 bags.

Exports in the first eight months of coffee year 2019/20 reached 83.8 million bags, down by 4.7% from the 87.96 million bags registered in the same period in 2018/19. In October 2019 to May 2020, exports of Colombian Milds fell by 7.9% to 9.33 million bags, Other Milds by 7.4% to 16.58 million bags, and Brazilian Naturals by 9.6% to 26.23 million bags. In contrast, shipments of Robusta increased by 2.5% to 31.67 million bags in the first eight months of coffee year 2019/20.

Imports by ICO importing Members and the United States, which on average account for around 75% of global imports, increased by 5.1% to 11.76 million bags in March 2020 of which 8.25 million bags originated from exporting countries. In the first six months of coffee year 2019/20, imports by ICO importing Members and the United States decreased by 3.7% to 64.22 million bags. Imports by the EU in October 2019 to March 2020 fell by 2.9% to 41.6 million bags, and those of the United States decreased by 8.2% to 13.75 million bags. Imports by Japan declined by 8.3% to 3.6 million bags, Tunisia by 6.2% to 265,000 bags, and Norway by 0.5% to 363,000 bags. In contrast, imports by the Russian Federation grew by 8% to 2.99 million bags, while those of Switzerland increased by 7.8% to 1.65 million bags.

Brazil was the largest source of coffee imports by the European Union, accounting for 20% of its imports in October 2019 to March 2020. This was followed by Vietnam (13.8%), Colombia (3.9%), Honduras (3.8%) and Uganda (3.2%). Imports from Brazil and Vietnam decreased by 6.7% to 8.32 million bags and by 10.4% to 5.74 million bags, respectively. However, imports from Colombia grew by 0.3% to 1.63 million bags, from Honduras by 20.7% to 1.57 million bags and from Uganda by 7.6% to 1.35 million bags. Around 70% of the EU’s imports are green coffee, particularly for those originating from producing countries, while soluble coffee accounts for around 10% of its imports. In the first half of coffee year 2019-20, Brazil, India, and Vietnam were significant sources of soluble coffee, representing 5.4%, 4.7% and 3.5% of the EU’s total soluble imports, respectively.

Imports from Brazil and Colombia accounted for 53.6% of imports by the United States in the first six months of coffee year 2019/20. Vietnam represented 9.1%, Mexico 4.9% and Peru 4.1% of US imports. Imports from Brazil decreased by 2.7% to 4.21 million bags, from Colombia by 10.3% to 3.15 million bags, and from Vietnam by 18.5% to 1.25 million bags. Shipments from Mexico amounted to 672,000 bags, 21.5% lower than in October 2018 to March 2019, while shipments from Peru fell by 27.3% to 558,000 bags.

The top five largest sources of imports of soluble coffee came from Brazil, Mexico, Colombia, India, and Spain, which accounted for 87.8% of the total. Among the five largest origins for roasted coffee, Canada, Italy, and Switzerland represented 71.8% while Mexico and Colombia represented 10.8% and 7.3%, respectively.

Like the European Union and the United States, Brazil, Vietnam, and Colombia were the main origins for Japan’s imports in the first half of coffee year 2019-20, accounting for 30.7%, 25.1%, and 15.3%, respectively. Ethiopia and Indonesia, representing 7% and 6.2% of Japan’s imports, were the next two largest suppliers. Imports from Brazil fell by 27.2% to 1.1 million bags and from Indonesia by 21.3% to 223,000 bags. However, imports from Vietnam grew by 12.9% to 904,000 bags, from Colombia by 14.4% to 551,000 bags, and from Ethiopia by 6.8% to 252,000 bags. Nearly 90% of Japan’s imports consist of green coffee, while soluble coffee accounts for around 9% of total imports. Brazil, Vietnam, and Colombia accounted for near 75% of total soluble imports. Brazil’s shipments of soluble coffee to Japan rose by 5.4% to 145,000 bags and Colombia by 20.5% to 28,000 bags while Vietnam’s fell by 14.7% to 68,000 bags.

For more information, visit: www.ico.org.

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The new range consists of Medium Roast and Dark Roast coffees, as well as a variety of coffee beverages and a tea latte.

From February 2020 onwards, Nestlé will introduce the new range of Starbucks premium instant coffee globally in markets including the UK, Ireland, Brazil, Chile, Mexico, Australia, New Zealand, Greater China (Mainland China, Hong Kong and Taiwan), Japan, Malaysia, Singapore, Thailand, and South Africa.

The new range of Starbucks premium instant coffee is the latest co-developed by Nestlé and Starbucks under the global coffee alliance, which in the last year has brought a broad range of new offerings to more than 40 markets.

“The continued strong collaboration between Starbucks and Nestlé enabled us to move at speed and to expand the Starbucks brand into the instant coffee segment. We are delighted to keep leveraging our coffee expertise to create new experiences for consumers,” said David Rennie, deputy executive vice president, head of Nestlé Coffee Brands.

“The instant coffee segment is growing fast globally. With the launch of Starbucks premium instant coffee, we have a new range that resonates with Starbucks consumers and will strengthen our leading position.”

John Culver, group president at Starbucks International, channel development and global coffee and tea, said: “We’re very excited to introduce our high-quality Starbucks coffees in a premium soluble format for customers to enjoy.

“The speed in which this innovation came to life is an example of the power of our alliance as we further extend the global reach of Starbucks for our customers and create long-term value for both companies.”

The Medium Roast is a smooth and balanced Latin American coffee with notes of milk chocolate and nuts. The Dark Roast is a fuller-bodied Latin American coffee with a sweet roast flavour and notes of dark chocolate.

The new coffee beverages and tea latte are directly inspired by signature Starbucks beverages, available in Cappuccino, Caffè Latte, Caffè Mocha, Caramel Latte, and Vanilla Latte, as well as tea-based Matcha latte.

All products use ethically sourced C.A.F.E. Practices arabica beans that are served in Starbucks coffeehouses.

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The Nescafé Gold lattes are reportedly the world’s first plant-based soluble coffees mixes and are available exclusively from Tesco until February 2020, after which they will also be available in other retailers across the UK.

This latest coffee innovation from Nestlé will help meet the growing consumer demand for plant-based and non-dairy in the UK.

Neil Stephens, head of the Nescafé business in the UK and Ireland, said: “Our new Nescafé Gold frothy coffees bring the plant-based latte trend out of the coffee shop and into the home. The three delicious flavours, oat, almond and coconut are vegan friendly.

“Nescafé is the world’s favourite coffee, but we do not take our position for granted. We are quick to spot and embrace fast moving coffee trends and tastes in this highly competitive and innovative market. Our new plant based vegan latte mixes are the latest in a long list of innovations to bring new and exciting sensory experiences to our loyal Nescafé consumers.”

The plant-based lattes are being launched first in the UK and Ireland before being rolled out in several markets across Asia, Europe, Latin America and Oceania.

The new vegan lattes will complement the existing range of 17 Nescafé Gold frothy coffees.

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Trade flows strengthen Brazil’s dominance
The international trade of green coffee saw strong growth in 2018, with 73m bags of green arabica exported (up 5% YOY) as well as 40m bags of green robusta (up 8% YOY). Virtually all of the growth came from Brazil and Vietnam, making the world more dependent on the two largest producers. Current low coffee prices are likely to prevent further growth in Central America and virtually all other countries, except low-cost producers Brazil and Vietnam.

The trade of processed coffee was much more stable in 2018, remaining virtually unchanged YOY. Italy is close to becoming the largest exporter of roasted coffee, almost overtaking Germany. There was also significant growth in soluble exports from Vietnam and Indonesia in 2018, but Brazil remains the top exporter of soluble coffee. Increasing robusta production in Brazil will make its soluble industry even more competitive going forward. Brazil’s top spot will be further solidified if a free trade EU-Mercosur agreement is reached, posing immense opportunities for Brazilian soluble coffee factories.

Consumer trends shaping trade flows
Rabobank’s research identified a number of coffee consumption trends that drive coffee flows, in both quantitative and qualitative terms.

A shift towards out-of-home consumption
Almost everywhere, out-of-home coffee consumption is growing faster than at-home coffee consumption, driven by changes in lifestyle and greater innovation from out-of-home options. As consumers shift purchasing patterns, there is a greater focus on differentiated, premium, and traceable products, and trends set in out-of-home consumption are expected to eventually trickle down to at-home consumption.

Ready-to-drink coffee boosts sales
Ready-to-drink (RTD) coffee consumption is well established in Asia – Japan alone accounts for over half of the global volumes – but it is also becoming increasingly prevalent in North America and in Europe, especially given the rising popularity of cold brew coffee. This is a core growth area within coffee and a high-margin, brand-building area.

The recent partnership between PepsiCo and Lavazza, as well as the introduction of Costa’s RTD coffee, shows us that the lines between soft drinks and RTD coffee will continue to blur.

Continued growth of capsules and pods in developed markets
The key success factor of single-serve portioned coffee is its convenience, specifically its ease of use and speed of preparation. Western Europe (65%) and North America (26%) represent the lion’s share of global volumes, but demand is growing in all regions. Furthermore, their efficiency means that a shift to capsules and pods will likely have a negative impact on coffee volumes.

Premium coffee development in Brazil
At close to 21m 60kg bags of coffee per year, Brazil is the second largest coffee consumer in the world, and demand is still growing. Sales of premium products, such as specialty coffee, fresh coffee beans and coffee capsules are outperforming those of standard products, such as instant coffee and standard ground coffee. Premium coffee sales in Brazil are expected to continue to grow double-digits through 2021 and to attract new investments from global coffee players.

An extremely hot market for coffee shops in China
China’s coffee consumption is still quite low, with annual per capita consumption of only 13 cups, but major international and local coffee chains are racing to gain presence and visibility in the major cities, following the listing of Luckin Coffee in May 2019. Chinese consumers expect high levels of service, and locations are far from cheap, but a growing number of young Chinese are incorporating a cup of coffee into their daily life.

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The $121 million design-build project added 150,000 square feet to the existing building, nearly doubling its original size to a new total of about 325,000 square feet.

Prompted by Starbucks growth and consumer demand, the expansion added six new whole bean roasters, allowing the facility to produce up to 146.8 million pounds of coffee per year at maximum capacity.

“Our biggest design improvement was implementing a unique flexibility layout and process that allows Starbucks to transfer product from any one of the plant’s unroasted coffee storage silos to roasted bean storage all the way through to any one of the plant’s packaging lines,” said Jason Goode, senior project engineer at Stellar, a design, engineering, construction and mechanical services firm who carried out the work.

Stellar also designed and installed provisions for two future packaging lines to accommodate continued growth.

The plant is the first company-owned facility in the world to produce Starbucks soluble products. The coffee roasted at the plant is used in Starbucks VIA Instant, as well as in the coffee base for Frappuccino blended beverages and many of the Starbucks bottled and canned beverages. The plant produces packaged coffee for Starbucks stores and retail locations in the Northeast and Southeast US.

“We were proud to once again partner with Starbucks and take this award-winning facility to the next level,” said Todd Allsup, vice president of sales for Stellar’s Food Group. “This is a state-of-the-art coffee plant unlike any other in the country, and it speaks to the Starbucks commitment to innovation, sustainability and delivering a high-quality product.”

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