Green Coffee Price
The ICO Composite Indicator Price (I-CIP) averaged 175.73 US cents/lb in December, an 8.8% increase from November 2023. The I-CIP posted a median value of 177.64 US cents/lb, having fluctuated between 163.92 and 186.04 US cents/lb. The December 2023 I-CIP is above the December 2022 I-CIP by 11.8%, with the 12-month rolling average at 165.23 US cents/lb. The I-CIP grew steadily in December 2023, reaching a nine-month high. The rise in tensions in the Red Sea has prompted some shipping lines to re-route their coffee-carrying vessels. Thus, for South-East Asian and East African coffee en route to Europe, unintended consequences include a rise in freight costs as some shipping companies have introduced surcharges to account for the now-extended transit times.

The Colombian Milds and Other Milds increased by 7.6% and 6.9%, to 210.68 and 210.76 US cents/lb, respectively, in December 2023. The Brazilian Naturals presented a growth of 9.4%, reaching an average of 185.23 US cents/lb. However, the Robustas grew the most by 10.5% to 135.47 US cents/lb, the highest level since May 1995, when they were valued at 140.90 US cents/lb. ICE’s New York market was a strong driver of the positive growth, having increased by 9.6% to 186.67 US cents/lb, whilst the London Futures market expanded by 12.2%, to 123.91 US cents/lb, also the highest level since May 1995.

Arbitrage, as measured between the London and New York Futures markets, widened by 5.0% to 62.77 US cents/lb in December 2023.

Intra-day volatility of the I-CIP expanded to 10.2% between November and December 2023. The Colombian Milds’ and Other Milds’ volatility also increased to 10.8% and 10.9%, respectively. Meanwhile, the Brazilian Naturals’ volatility rose by 2.9 percentage points to 12.6% from November to December 2023. The Robustas presented the smallest volatility increase, with a 0.9 percentage point gain, averaging 9.2% for the month of December. The London Futures market’s volatility increased by 2.7 percentage points to 9.1%. Lastly, the New York futures market’s volatility moved in tandem to that of London, expanding by 2.4 percentage points and reaching 10.5%.

The New York certified stocks continued on their downward trajectory, retracting by 15.0% to 0.28 million 60-kg bags, one of the lowest figures ever recorded. Certified stocks of Robusta coffee reached 0.57 million 60-kg bags, a 68.4% increase since November 2023.

Exports by Coffee Groups — Green Beans
Global green bean exports in November 2023 totalled 9.79 million bags, as compared with 9.1 million bags in the same month of the previous year, up 7.6%. As a result, the cumulative total for coffee year 2023/24 to November is 18.39 million bags, as compared with 17.7 million bags over the same period a year ago, up 3.9%.

Shipments of the Other Milds increased by 17.9% in November 2023 to 1.31 million bags from 1.11 million bags in the same period last year. Peru was the main driver of the double-digit growth of this group of coffee, with the origin’s exports of the Other Milds increasing by 60.1% to 0.57 million bags in November 2023 from 0.35 million bags in November 2022, following a 28.9% increase in October 2023. The resurgence of Peru’s exports of the Other Milds is due to the return to normality of local production conditions in coffee year 2023/24 as compared with those seen in coffee year 2022/23. Irregular weather patterns negatively affected the local supply of coffee beans in 2022/23, especially in the first three months of the coffee year, when 1.15 million bags were exported. This was the lowest first three months of exports since the 0.93 million bags shipped in coffee year 2014/15, representing a 26.7% fall in the average volume of exports in coffee years 2015/16–2021/22, which was 1.57 million bags. As a result, the cumulative volume of total exports of the Other Milds also increased, jumping by 9.2% in the first two months of coffee year 2023/24 to 2.74 million bags, versus 2.51 million bags over the same period in 2022/23.

Green bean exports of the Brazilian Naturals increased in November 2023, rising by 1.6% to 3.63 million bags. For the first two months of coffee year 2023/24, green bean exports of the Brazilian Naturals amounted to 7.35 million bags, up 4.0% from 7.07 million bags over the same period a year ago. The relatively shallow positive growth rate reflects the 2.6% increase in exports of the Brazilian Naturals from Brazil, the biggest producer and exporter of this group of coffee, which rose to 3.2 million bags in November 2023 from 3.12 million bags November 2022.

Exports of the Colombian Milds increased by 34.0% to 1.15 million bags in November 2023 from 0.85 million bags in November 2022, driven primarily by Colombia, the main origin of this group of coffee, whose exports of green beans were up 35.6% in November 2023. As a result, exports of the Colombian Milds for the first two months of coffee year 2023/24 are up 18.7% at 2.1 million bags, as compared with 1.77 million bags in the first two months of coffee year 2022/23.

Green bean exports of the Robustas amounted to 3.7 million bags in November 2023, as compared with 3.56 million bags in November 2022, up 4.0%. In volume terms, these constitute the biggest November exports on record, surpassing the level set in November 2022. However, the rise was not sufficient to offset the 10.9% decrease observed in October 2023, when the 2.49 million bags exported represented the lowest quantity for the month since the 1.91 million bags in October 2011. As a result, the cumulative total for the first two months of coffee year 2023/24 is down 2.5%, at 6.2 million bags, as compared with 6.36 million bags in the first two months of coffee year 2022/23. The main driver of November’s Robustas increase was Brazil, shipping 0.86 million bags, a jump of 850.2%.

Exports by Regions — All Forms of Coffee
In November 2023, South America’s exports of all forms of coffee increased by 24.7% to 6.07 million bags. The source of the strong positive growth is mainly Brazil, which saw its exports increase by 21.1% to 4.34 million bags from 3.58 million bags in November 2022. More specifically, it was the Robustas from the origin, which in November increased by 850.2% to 0.86 million bags from 0.09 million bags, which drove the region’s positive growth. The November 2023 exports are Brazil’s highest on record for Robusta coffee, beating the 698,856 bags exported in August 2023. Brazil is one of the largest producers and exporters of the Robustas, having accounted for an 8.1% share of the group’s total exports in coffee year 2021/22, i.e. 3.94 million bags. That said, in July–October 2023, Brazil’s share of the Robustas more than doubled, increasing to 22.3%, with the country exporting 3.09 million bags in just four months. This surge was in response to the reduced volume of Robustas coming out of Vietnam, whose Robusta exports fell by 27.5% in July–October 2023 to 4.92 million bags from 6.78 million bags over the same period a year ago. The continued rampant expansion of Brazil’s Robusta exports despite Vietnam’s recovery in November 2023 suggests that its strong foray into this market may continue.

Robusta exports fell by 27.5% in July–October 2023 to 4.92 million bags from 6.78 million bags over the same period a year ago. The continued rampant expansion of Brazil’s Robusta exports despite Vietnam’s recovery in November 2023 suggests that its strong foray into this market may continue.

Exports of all forms of coffee from Africa decreased by 13.5% to 1.01 million bags in November 2023 from 1.16 million bags in November 2022. For the first two months of coffee year 2023/24, exports totalled 2.06 million bags as compared with 2.24 million bags in coffee year 2022/23, down 8.1%. This is the third consecutive month of negative growth for the region and it affected most origins, including all the major producers whose combined exports decreased by 11.4% to 0.93 million bags from 1.05 million bags in November 2022. It is speculated that the surge in Brazil’s Robusta exports is crowding out traditional exporters of the group from the market, thus broadly affecting Africa as a whole, which is a largely Robusta-producing region. Uganda, the largest producer and exporter of Robusta coffee in Africa, was also affected by a delayed harvest season which negatively impacted the supply availability.

In November 2023, exports of all forms of coffee from Mexico & Central America were up 15.7% to 0.41 million bags, as compared with 0.35 million in November 2022. As a result, total exports are up 11.0% for October 2023 to November 2023 at 0.9 million bags, as compared with 0.81 million bags for the same period a year ago. Guatemala, Honduras and Mexico are the three main origins behind the region’s double-digit growth in November, with their respective exports up 114.0%, 29.7% and 11.8%. These robust growth rates do not, however, herald the beginning of a record-breaking year for the three origins or for the region, but rather are indications that export volumes are returning to the levels of the recent past, following a sharp fall in coffee year 2022/23. Accordingly, the average October–November export volume for coffee years 2017/18–2021/22 was 0.7 million bags for the three countries as compared with 0.6 million bags in coffee year 2022/23, a 14.6% fall. This has now increased to 0.68 million bags in coffee year 2023/24.

Exports of all forms of coffee from Asia & Oceania decreased by 18.0% to 3.12 million bags in November 2023. November’s downturn was mainly due to Indonesia, with exports down 45.2% to 0.49 million bags from 0.89 million bags in November 2022. These are the lowest November exports since the 0.2 million bags shipped in 2018. The decrease can be attributed to a reduced harvest in coffee year 2023/24, which is estimated to have fallen by 16.6% to 10.0 million bags from 11.98 million bags in coffee year 2022/23 on the back of excessive rains that damaged cherries in April–May 2023. Vietnam’s exports fell by 7.7% in November, a vast improvement from the steep declines of 23.6%, 45.0% and 44.7% seen in August, September and October 2023. This may indicate that its supply issues have now started to resolve after very low in-origin stock levels were reported in Q4 of coffee year 2022/23, when the start of the harvest still remained three to four months away.

Exports of Coffee by Forms
Total exports of soluble coffee decreased by 25.4% in November 2023 to 0.77 million bags from 1.03 million bags in November 2022. In the first two months of coffee year 2023/24, a total of 1.75 million bags of soluble coffee were exported, representing a decrease of 3.0% from the 1.8 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 November 2023, down from 9.2% in the same period a year ago. Brazil is the largest exporter of soluble coffee, having shipped 0.24 million bags in November 2023.

Exports of roasted beans were down 15.5% in November 2023 to 54,379 bags, as compared with 64,324 bags in November 2022. The cumulative total for coffee year 2023/24 to November 2023 was 0.1 million bags, as compared with 0.13 million bags in same period a year ago.

Production and Consumption
World coffee production increased by 0.1% to 168.2 million bags in coffee year 2022/23. The stagnant growth rate belies the tremendous changes at the regional level, with the coffee world neatly split between the expanding Americas and the shrinking rest of the world.

Asia & Oceania and Africa’s 4.7% and 7.2% decreases in production to 49.84 million bags and 17.9 million bags, respectively, can be attributed to adverse weather conditions negatively affecting key producers in the regions, particularly Vietnam, Côte d’Ivoire and Uganda. The magnitude of the fall in outputs of the two regions was entirely mitigated by the Americas, especially by South America’s 4.8% increase, which in turn was driven mainly by the biennial production-affected 8.4% increase in Brazil. The combined output of the Americas was 100.5 million bags.

The Americas versus the rest of the world split was also reflected in the production split between the Arabicas and Robustas, with the former’s output increasing by 1.8% to 94.0 million bags as compared with the 2.0% decrease of the latter to 74.2 million bags.

Looking ahead, the output for coffee year 2023/24 is expected to increase by 5.8% to 178.0 million bags, with the Arabicas’ output rising to 102.2 million bags and the Robustas’ increasing to 75.8 million bags.

The biennial production effect will play a large role in the outlook, especially for Brazil and the Arabicas, as the impact of the July 2021 frost continues to be resolved. Coffee year 2023/24 is anticipated to be an exceptional off-biennial year, feeling more like a good on-biennial following an average on-biennial year. Adverse weather conditions, first noted in 2022 and continuing into 2023, will have a negative impact on the outlook for coffee year 2023/24. The anticipated El Niño phenomenon is set to dampen the outlook in Asia, especially for origins like Indonesia. Meanwhile, Vietnam is expected to benefit from the drier/hotter weather as irrigation mitigates the reduced precipitation.

World coffee consumption is continuing to resolve through the issues brought about by the COVID-19 pandemic, with the consumption trend following an established patten in response to an external shock. The expectation for coffee year 2022/23 was for a smaller positive growth rate; however, world coffee consumption actually recorded a decrease of 2.0% to 173.1 million bags.

Consumption in coffee year 2022/23 did not faithfully follow the established pattern due to the impact of the high cost of living, falling disposable incomes and a long stocks drawdown. Despite coffee being relatively inelastic, the challenging global economic environment would have had a negative impact on its consumption. The world inflation rate was at its highest in 2021 at 9.4%, while the benchmark interest rate averaged 4.9% at the end of September 2023 in the European Union, UK and USA, the highest level since an average of 5.8% in 2000. At the same time, there was a large drawdown of stocks, where combined stocks reported by the European Coffee Federation and those held at the Intercontinental Exchange’s warehouses in the USA fell by 4.8 million bags from 14.5 million to 9.8 million. This drawdown would have reduced the need for purchases on the international market, seemingly reflected as lower and anomalous global consumption rates for coffee year 2022/23.

The world coffee consumption outlook for coffee year 2023/24 is broadly framed by the assumption that the global economy will continue to grow at above 3.0%, and that the industry will respond to the large drawdown of stocks, which will be positively reflected in apparent consumption. As a result, world coffee consumption is expected to grow by 2.2% to 177.0 million bags, with non-producing countries making the biggest contribution to the overall increase. Coffee consumption in this group of countries should expand by 2.1%.

As a result, the world coffee market is expected to run a surplus of 1.0 million bags in coffee year 2023/24.

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). For the full CRO or for more information, visit the ICO website: icocoffee.org.

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The ICO Composite Indicator Price (I-CIP) averaged 161.53 US cents/lb in November, a 6.3% increase from October 2023. The I-CIP posted a median value of 161.63 US cents/lb, having fluctuated between 153.32 and 169.99 US cents/lb. The November 2023 I-CIP is above the November 2022 I-CIP by 3.1%, with the 12-month rolling average at 163.69 US cents/lb, having ranged in between 151.94 in October 2023 and 178.57 US cents/lb in April 2022. The I-CIP has remained stable around the 160 US cents/lb mark, with daily price variation declining on average for the October 2022 to November 2023 range, only 0.04%.

The Colombian Milds and Other Milds increased by 5.3% and 7.2%, to 195.85 and 197.18 US cents/lb, respectively, in November 2023. The Brazilian Naturals presented the strongest growth of 8.8%, reaching an average of 169.25 US cents/lb. However, the Robustas also grew by 3.2% to 122.63 US cents/lb. The International Coffee Exchanges’s (ICE) New York market was a strong driver of the positive growth, growing by 9.2% to 170.25 US cents/lb whilst the London Futures market expanded by 4.8%, to 110.45 US cents/lb.

The Colombian Milds–Other Milds differential contracted from 2.02 to 1.33 US cents/lb. The Colombian Milds–Brazilian Naturals differential shrank 12.6% % to 26.60 US cents/lb, whilst the Colombian Milds–Robustas differential also expanded 9.1% from October to November 2023, averaging 73.22 US cents/lb. Meanwhile, the Other Milds–Brazilian Naturals differential contracted 1.8%, reaching 27.93 US cents/lb. However, the Other Milds–Robustas and the Brazilian Naturals–Robustas differentials expanded 14.5% and 27.1%, averaging 74.55 and 46.62 US cents/lb, respectively, in November 2023.

Arbitrage, as measured between the London and New York Futures markets, widened by 18.4% to 59.81 US cents/lb in November 2023. Intra-day volatility of the I-CIP was raised to 8.0% between October and November 2023. The Colombian Milds’ and Other Milds’ volatility also increased to 8.7% and 8.8%. Meanwhile, the Brazilian Naturals’ volatility rose by 1.1 percentage points to 9.7% from October to November 2023. The Robustas presented the smallest volatility increase, with a 0.8 percentage point gain, averaging 8.3% for the month of November. The London Futures market’s volatility decreased by 2.4 percentage points to 9.1%. Lastly, the New York futures market’s volatility moved in tandem to that of London, expanding by 2.4 percentage points and reaching 10.5%.

The New York and London certified stocks continued on their downward trajectory, where London retracted by 49.2% to 0.34 million 60-kg bags, the lowest figure recorded since March 2014. Certified stocks of Arabica coffee reached 0.32 million 60-kg bags, a 24.5% decrease.

Exports by Coffee Groups – Green Beans
Global exports of green beans in October 2023 totalled 8.57 million bags, compared with 8.61 million bags in the same month of the previous year, down 0.4%. The downturn was driven by the Robustas, the only one of the four groups to start coffee year 2023/24 with negative growth.

The Brazilian Naturals made a strong start to the new coffee year, with exports increasing by 10.0% to 4.02 million bags from 3.66 million bags in October 2022. This is the second-highest volume exported in the month of October on record, just behind the 3.9 million bags shipped in 2020. Brazil was the main driver of this strong start, with the origin’s total green bean exports up 23.0% to 4.08 million bags in October 2023, which is also the country’s second-highest volume of exports in the month of October to be documented.

Exports of the Colombian Milds increased by 0.2% to 1.031 million bags in October 2023 from 1.03 million bags in October 2022. The near-stagnant start to the new coffee year was due to the conflation of the continued downturn in Colombia, the largest producer and export of the Colombian Milds, and the strong start made by Kenya and Tanzania, the two other origins that make up this coffee group.

Shipments of the Other Milds decreased by 1.8% in October 2023 to 1.59 million bags from 1.62 million bags in the same period last year. The main negative contributions came from Brazil (down 66.2% and 78,719 bags) and Papua New Guinea (down 34.3% and 53,737 bags), while Honduras provided the largest positive contribution (up 28.9% and 138,993 bags).

Of the four coffee groups, the Robustas have recorded the highest contraction in the new coffee year to date, with exports falling by 8.0% to 2.88 million bags from 3.14 million bags. Vietnam, the largest Robusta producer in the world, was the driver of the sharp downturn, with exports of Robusta green beans down 45.2% to 0.69 million bags in October 2023 from 1.26 million bags in October 2022.

Exports by Regions – All Forms of Coffee
In October 2023, South America’s exports of all forms of coffee increased by 16.4% to 5.95 million bags. Brazil was the main driving force of the double-digit growth of the region, having shipped 4.37 million bags in October 2023, a jump of 21.7%. Peru provided added support, with its exports increasing by 28.9% to 0.62 million bags from 0.48 million bags in October 2022.

Exports of all forms of coffee from Asia & Oceania totalled 2.05 million bags in October 2023, decreasing by 26.7%. Vietnam, the world’s second-largest producer and exporter of coffee, was the main driver of the region’s sharp downturn, with total exports down 44.7% to 0.75 million bags in October 2023 from 1.36 million bags in October 2022. This was the lowest volume of exports since the 0.7 million bags shipped in October 2008. A shortage of exportable materials within Vietnam, due to the lower-than-expected harvest in coffee year 2022/23, a delay in supply from the current coffee year’s harvest and a very strong export performance in the first nine months of the previous coffee year, explain the sharp downturn.

Exports of all forms of coffee from Africa decreased by 1.0% to 1.07 million bags in October 2023 from 1.08 million bags in October 2022. Ethiopia (–13.5%), Rwanda (–34.8%) and Cameroon (–57.4%) were the three main origins making a negative contribution to the region’s exports, in absolute terms, while Burundi (200.0%), Côte d’Ivoire (40.9%), Kenya (31.4%) and Uganda (2.8%) were the main origins making positive contributions. According to the Uganda Coffee Development Authority, the promising export performance in October 2023 was due to adequate supply from a good crop harvest in the South-Western region and the prevailing good prices on the global scene which prompted exporters to release their stocks. In Ethiopia, contract disputes arising out of a mismatch between local purchasing prices and the global market prices, first reported in the middle of coffee year 2022/23, continue to negatively impact export volume in the new coffee year.

In October 2023, exports of all forms of coffee from Mexico & Central America were up 0.4% to 0.459 million bags as compared with 0.457 million in October 2022. The performances of individual origins belied the less-than-dynamic growth of the region, with very strong negative and positive growth rates registered in October: Costa Rica (212.7%), El Salvador (69.6%), Guatemala (18.0%) and Nicaragua (15.6%) on the expansion side against the decreasing Dominican Republic (–80.1%), Honduras (–39.2%) and Mexico (–11.1%).

Exports of Coffee by Forms
Total exports of soluble coffee increased by 16.9% in October 2023 to 0.91 million bags from 0.78 million bags in October 2022. Soluble coffee’s share in the total exports of all forms of coffee for the year to date was 10.6% in October 2023, up from 9.0% for the same period a year ago. Brazil is the largest exporter of soluble coffee, having shipped 0.28 million bags in October 2023. Exports of roasted beans were down 20.4% in October 2023 to 49,185 bags, as compared with 61,781 bags in October 2022.

Production and Consumption
World coffee production increased by 0.1% to 168.2 million bags in coffee year 2022/23. The stagnant growth rate belies the tremendous changes at the regional level, with the coffee world neatly split between the expanding Americas and the shrinking rest of the world.

Asia & Oceania and Africa’s 4.7% and 7.2% decreases in production to 49.84 million bags and 17.9 million bags, respectively, can be attributed to adverse weather conditions negatively affecting key producers in the regions, particularly Vietnam, Côte d’Ivoire and Uganda. The magnitude of the fall in outputs of the two regions was entirely mitigated by the Americas, especially by South America’s 4.8% increase, which in turn was driven mainly by the biennial production-affected 8.4% increase in Brazil.

The combined output of the Americas was 100.5 million bags. The Americas versus the rest of the world split was also reflected in the production split between the Arabicas and Robustas, with the former’s output increasing by 1.8% to 94.0 million bags as compared with the 2.0% decrease of the latter to 74.2 million bags.

Looking ahead, the output for coffee year 2023/24 is expected to increase by 5.8% to 178.0 million bags, with the Arabicas’ output rising to 102.2 million bags and the Robustas’ increasing to 75.8 million bags.

The biennial production effect will play a large role in the outlook, especially for Brazil and the Arabicas, as the impact of the July 2021 frost continues to be resolved. Coffee year 2023/24 is anticipated to be an exceptional off-biennial year, feeling more like a good on-biennial following an average on-biennial year. Adverse weather conditions, first noted in 2022 and continuing into 2023, will have a negative impact on the outlook for coffee year 2023/24. The anticipated El Niño phenomenon is set to dampen the outlook in Asia, especially for origins like Indonesia. Meanwhile, Vietnam is expected to benefit from the drier/hotter weather as irrigation mitigates the reduced precipitation.

World coffee consumption is continuing to resolve through the issues brought about by the Covid-19 pandemic, with the consumption trend following an established patten in response to an external shock. The expectation for coffee year 2022/23 was for a smaller positive growth rate; however, world coffee consumption actually recorded a decrease of 2.0% to 173.1 million bags.

Consumption in coffee year 2022/23 did not faithfully follow the established pattern due to the impact of the high cost of living, falling disposable incomes and a long stocks drawdown. Despite coffee being relatively inelastic, the challenging global economic environment would have had a negative impact on its consumption. The world inflation rate was at its highest in 2021 at 9.4%, while the benchmark interest rate averaged 4.9% at the end of September 2023 in the European Union, UK and USA, the highest level since an average of 5.8% in 2000. At the same time, there was a large drawdown of stocks, where combined stocks reported by the European Coffee Federation and those held at the Intercontinental Exchange’s warehouses in the USA fell by 4.8 million bags from 14.5 million to 9.8 million. This drawdown would have reduced the need for purchases on the international market, seemingly reflected as lower and anomalous global consumption rates for coffee year 2022/23.

The world coffee consumption outlook for coffee year 2023/24 is broadly framed by the assumption that the global economy will continue to grow at above 3.0%, and that the industry will respond to the large drawdown of stocks, which will be positively reflected in apparent consumption. As a result, world coffee consumption is expected to grow by 2.2% to 177.0 million bags, with non-producing countries making the biggest contribution to the overall increase. Coffee consumption in this group of countries should expand by 2.1%.

Balance. As a result, the world coffee market is expected to run a surplus of 1.0 million bags in coffee year 2023/24.

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). To download the full report or for more information, visit: icocoffee.org.

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The sale was first announced in May 2023, with Finlays selecting Browns Investments PLC as the approved buyer based on its strong legacy of guiding its tea estates to continued growth, but also its focus on doing so sustainably while supporting its workforce and local communities.

James Finlay Kenya is a grower, manufacturer and supplier of Kenyan tea. It covers a total self-contained area of 10,300 hectares, including 5,200 hectares of tea fields over nine tea estates. The sale includes all parts of James Finlay Kenya Ltd except the Saosa tea extraction facility which will remain under Finlays’ ownership and will become known as ‘Finlays Extracts, Kenya’.

Headquartered in Colombo, Browns has a proud heritage in operating plantation businesses, owning Maturata Plantations, Hapugastenne Plantations PLC, and Udapussellawa Plantations PLC. It is one of the largest tea producing companies in Sri Lanka consisting of 49 individual estates that stretch across an area of over 30,000 hectares and employs over 10,000 individuals.

As part of the sale agreement, Browns and Finlays have mutually agreed to acknowledge the long-standing support of the local community by offering 15% of shares in James Finlay Kenya for public sale through the Kipsigis Highlands Multipurpose Cooperative Society.

James Finlay Kenya, which will become known as ‘Browns Plantations Kenya’ in due course, is Brown’s first investment in the Kenyan tea industry which it sees as an exciting opportunity for growth. In December 2021, Browns acquired Finlays’ Sri Lankan tea estates business, which has gone from strength to strength, demonstrating Browns’ successful commitment to sustainable growth.

Finlays has a long history in Kenya and is continuing to invest in the country through its continued ownership of the Saosa tea extracts facility, and its Kenyan tea sourcing and packing operation James Finlay Mombasa. Saosa manufacturers a range of tea extracts and aromas, adding significant value to the Kenyan economy.

Kamantha Amarasekera, CEO of Browns Investments PLC said: “We’re delighted to welcome all members of the James Finlay Kenya community into the Browns family. It’s an amazing business, powered by an incredible community, and superb growth potential which will not just benefit the community, but the Kenyan economy at large.”

James Woodrow, group managing director of Finlays said: “James Finlay Kenya has played an enormous role in Finlays’ success story over the years. In Browns Investments, the JFK community has a conscientious new investor with a bright and exciting vision. We will always have a very close relationship with ‘Browns Plantations Kenya’, and we continue to invest in Kenya through both Saosa, our tea extraction facility, and through James Finlay Mombasa. While this is the end of an era, we’re delighted that 15% of shares in James Finlay Kenya will be owned by members of the local community.”

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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. 

The post Uganda devises a roadmap to transform its coffee industry  appeared first on Tea & Coffee Trade Journal.

Green Coffee Price
The ICO Composite Indicator Price (I-CIP) averaged 151.94 US cents/lb in October, a 0.8% decline from September 2023. The I-CIP posted a median value of 151.58 US cents/lb, having fluctuated between 145.99 and 160.09 US cents/lb.

The Colombian Milds and Other Milds increased by 0.5% and 0.2%, to 185.97 and 183.95 US cents/lb, respectively, in October 2023. The Brazilian Naturals presented the strongest growth of 0.9%, reaching an average of 155.52 US cents/lb. However, Robustas retracted 4.1% to 118.83 US cents/lb. ICE’s New York market grew by 1.5% whilst the London Futures market shrank by 3.4%, to 155.91 and 105.40 US cents/lb, respectively.

The Colombian Milds-Other Milds differential grew 38.5% to 2.02 US cents/lb. The Colombian Milds-Brazilian Naturals differential shrank 1.1% to 30.45 US cents/lb, whilst the Colombian Milds-Robustas differential also expanded 9.9% from September to October 2023, averaging 67.14 US cents/lb. Meanwhile, the Other Milds-Brazilian Naturals differential contracted 3.1%, reaching 28.43 US cents/lb. However, the Other Milds-Robustas and the Brazilian Naturals-Robustas differentials expanded 9.2% and 21.1%, averaging 65.12 and 36.69 US cents/lb, respectively, in October 2023.

Arbitrage, as measured between the London and New York Futures markets, widened by 13.7% to 50.51 US cents/lb in October 2023.

Intra-day volatility of the I-CIP remained stable at 6.3% between September and October 2023. The Colombian Milds’ and Other Milds’ volatility also increased to 6.8% and 7.6%. Meanwhile, the Brazilian Naturals’ volatility rose by 0.5 percentage points to 8.6% from September to October 2023. The Robustas presented the smallest volatility increase, with a 0.1 percentage point gain, averaging 7.5% for the month of October. The London Futures market’s volatility decreased by 0.6 percentage points to 6.7%. Lastly, the New York futures market’s volatility moved in the opposite direction to that of London, expanding by 0.4 percentage points and reaching 8.1%.

The New York and London certified stocks moved in the same downward direction, where London retracted by 7.9% to 0.67 million 60-kg bags, whilst certified stocks of Arabica coffee reached 0.44 million 60-kg bags, a 10.7% decrease and the lowest figure since October 2022.

Exports by Coffee Groups – Green Beans
Global green bean exports in September 2023 totalled 7.8 million bags, as compared with 8.83 million bags in the same month of the previous year, down 11.6%. For coffee year 2022/23, exports of green beans were down 5.5% to 110.81 million bags from 117.28 million bags in coffee year 2021/22. The global macro-economic environment was not conducive to consumer confidence in coffee year 2022/23, with global inflation and interest rates in many of the key advanced economies high and rising, increasing the cost of living and thus reducing disposable income levels for a very large section of the world.

These conditions seemingly support a downturn in the consumption of coffee and consequently in global exports of green beans. Nevertheless, the global economy was not only projected to expand in calendar year 2023, but the outlook was also raised between April–October 2023 by the International Monetary Fund (IMF), which suggests otherwise. The drop in global exports of green beans in coffee year 2022/23 may therefore lie more with logistics/the supply chain than the economy and actual consumption of coffee. Average green bean exports amounted to 118.13 million bags in coffee years 2018/19–2021/22, as compared with an average 109.59 million bags for coffee years 2014/15–2017/18, a jump of 8.54 million bags. This suggests a build-up of stocks in non-producing countries which have been heavily drawn down in the past 12 months.

Shipments of the Other Milds decreased by 13.1% in September 2023 to 1.57 million bags from 1.8 million bags in the same period last year. For coffee year 2022/23, exports of the Other Milds were down 12.1% to 22.11 million bags from 25.16 million bags in coffee year 2021/22. Green bean exports of the Brazilian Naturals decreased in September 2023, falling by 13.4% to 2.69 million bags. For coffee year 2022/23, exports of the Brazilian Naturals were down 8.5% to 34.17 million bags from 37.33 million bags in coffee year 2021/22. Exports of the Colombian Milds increased by 6.7% to 0.87 million bags in September 2023 from 0.82 million bags in September 2022. For coffee year 2022/23, exports of the Colombian Milds were down 11.2% to 10.77 million bags from 12.14 million bags in coffee year 2021/22. For coffee year 2022/23, total green bean exports of the Arabicas were down 10.1% to 67.05 million bags from 74.63 million bags in coffee year 2021/22.

Overall, for the Arabicas, exports were seemingly negatively affected by the drawdown of stocks in consuming countries, with buyers staying away from the markets in coffee year 2022/23. Furthermore, substitution towards the more competitively priced Robustas, induced by the increased cost of living and reduced disposable income, would have also added to the downturn (see Green Coffee Price).

Exports of the Colombian Milds fell below the 11.0 million bags mark for the first time since coffee year 2012/13. These exports were primarily driven by Colombia, the main origin of this group of coffee, and weather-related disruption affected supply throughout most of coffee year 2022/23. Indeed, Colombia’s green bean exports contracted for the first 11 months of coffee year 2022/23, with only September 2023 showing an expansion. Figures for the year show that, overall, the country’s exports declined 13.1% to 9.42 million bags, the first time they have dropped below 10.0 million bags since coffee year 2013/14.

Green bean exports of the Robustas amounted to 2.67 million bags in September 2023, as compared with 3.09 million bags in September 2022, down 13.8%. For coffee year 2022/23, exports of the Robustas were up 2.6% to 43.76 million bags from 42.66 million bags in coffee year 2021/22. Of the four groups of coffee, the Robustas were the only group to experience positive growth in coffee year 2022/23, benefitting from macro-economic-induced substitution away from less competitively priced Arabicas.

The September 2023 exports represent the lowest September volume for the Robustas since the 2.58 million bags shipped in 2012 and were a result of the 43.4% decrease in exports from Vietnam, the world’s largest producer and exporter of the group, which only shipped 0.81 million bags – the lowest September exports since 2008 (0.79 million bags). Vietnam has been struggling with supply since the start of Q4 of coffee year 2022/23, when very low in-origin stock levels were reported at a time when the start of the harvest still remained three to four months away. The low September 2023 export levels appear to be a continuation of the industry’s deepening struggle with supply issues.

Exports by Regions – All Forms of Coffee
In September 2023, South America’s exports of all forms of coffee decreased by 3.4% to 4.74 million bags. For coffee year 2022/23, the region’s exports were down 11.0% to 50.59 million bags from 56.83 million bags in coffee year 2021/22. The region’s two largest producers and exporters, Brazil and Colombia, saw their total exports fall by 7.9% and 12.8%, respectively. South America’s fortunes are closely tied to the fortunes of the Arabicas and many of the same factors that explain the latter’s double-digit fall also explain the former’s. After all, from coffee year 2018/19 to 2022/23, 93.2% of the total green bean exports from South America were Arabicas, on average. The drawdown of stocks in consuming countries and substitution towards the Robustas are the two main factors. Two specific and additional factors are that (i) Brazil’s export performance was poor due to its relatively limited supply following two consecutive years of below-par harvests; and (ii) Colombia struggled with weather-impacted supply conditions that negatively affected the origin’s export volume.

Exports of all forms of coffee from Africa decreased by 1.9% to 1.21 million bags in September 2023 from 1.23 million bags in September 2022. For coffee year 2022/23, the region’s exports were down 1.4% to 13.53 million bags from 13.73 million bags in coffee year 2021/22. The relatively strong global demand for Robustas was the fundamental source of Africa’s positive export growth rate in coffee year 2022/23. Moreover, particularly during Q4 of coffee year 2022/23, the reduced volume of exports from the Asia and Oceania region, and more pointedly from Vietnam, strengthened Africa’s own export performance. Uganda, the largest producer and exporter of Robusta coffee in Africa, took the opportunity to fill the gap in the market left by Vietnam and the Asia and Oceania region as a whole.

In September 2023, exports of all forms of coffee from Mexico and Central America were down 9.2% to 0.74 million bags as compared with 0.81 million bags in September 2022. For coffee year 2022/23, the region’s exports were down 3.1% to 15.3 million bags from 15.78 million bags in coffee year 2021/22. The downturn was primarily driven by Guatemala and Mexico, which suffered 11.5% and 16.5% decreases, respectively. However, the mitigating factor that limited the region’s fall in exports to a low single-digit decrease was Honduras’ 13.5% increase.

Exports of all forms of coffee from Asia and Oceania decreased by 35.7% to 1.91 million bags in September 2023 as compared with 2.98 million bags in September 2022. For coffee year 2022/23, the region’s exports were down 0.9% to 43.56 million bags from 43.95 million bags in coffee year 2021/22. Asia and Oceania’s fortunes are closely tied to the fortunes of the Robustas and many of the same factors that explain the latter’s single-digit increase also explain the former’s. From coffee year 2018/19 to 2022/23, 89.1% of the total green bean exports from Asia & Oceania were Robustas, on average. In coffee year 2022/23, Vietnam’s exports were up 0.4% to 28.29 million bags from 28.19 million bags in coffee year 2021/22.

Exports of Coffee by Forms
Total exports of soluble coffee decreased by 27.3% in September 2023 to 0.75 million bags from 1.03 million bags in September 2022. For coffee year 2022/23, soluble coffee exports were down 5.7% to 11.47 million bags from 12.16 million bags in coffee year 2021/22.

Soluble coffee’s share in the total exports of all forms of coffee for the year to date was 8.7% in September 2023, down from 10.4% for the same period a year ago. For coffee year 2022/23, soluble coffee’s share of the total exports was 9.3%, the same as in coffee year 2021/22. Brazil is the largest exporter of soluble coffee, having shipped 0.27 million bags in September 2023 and 3.77 million bags in coffee year 2022/23.

Exports of roasted beans were down 26.7% in September 2023 to 55,203 bags, as compared with 75,355 bags in September 2022. For coffee year 2022/23, roasted coffee exports were down 16.0% to 0.71 million bags from 0.84 million bags in coffee year 2021/22.

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). To download the full CRO or for more information, visit the ICO website: icocoffee.org.

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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.

The post Arabicas drop slightly while Robustas remain firmly above 120.00 US cents/lb appeared first on Tea & Coffee Trade Journal.

The ICO Composite Indicator Price (I-CIP) averaged 154.53 US cents/lb in August, posting a median value of 152.10 US cents/lb and fluctuating between 148.79 and 163.62 US cents/lb.

The Colombian Milds-Other Milds decreased by 1.6% and 3.5%, to 187.55 and 186.73 US cents/lb, respectively, in August 2023. Accentuated by a greater falling rate, the Other Milds fell back below the Colombian Milds. The Brazilian Naturals-Robustas both contracted by 3.0% and 2.3%, reaching an average of 154.66 and 124.62 US cents/lb, respectively. ICE’s New York market fell by 1.9%, whilst the London Futures market shrank by 2.0 % to 156.56 and 111.34 US cents/lb, respectively.

The Colombian Milds-Other Milds differential pivoted from –2.91 to 0.82 US cents/lb, returning to the positive after an inverted differential in July 2023. On the one hand, the Colombian Milds-Brazilian Naturals differential grew 5.8% to 32.89 US cents/lb, whilst the Colombian Milds-Robustas differential contracted 0.1% from July to August 2023, averaging 62.93 US cents/lb. Meanwhile, the Other Milds-Brazilian Naturals, Other Milds-Robustas and Brazilian Naturals-Robustas differentials contracted by 5.7, 5.8 and 5.9%, reaching 32.07, 62.11 and 30.04 US cents/lb, respectively.

In August 2023, the Colombian Milds-Other Milds Arabica differential had been narrowing considerably and, after thirty-four business days of negative differentials, this trend was reversed on 10th August. The Colombian Milds-Other Milds Arabica differential closed August on a one-month high, though it has not reached such positive lows in four and a half years. In late July and August 2023, the Arabicas-Robusta price movements recoupled, moving once again in tandem. Since April 2023, the price movements of the Arabicas and Robusta were decoupled under price substitution-related pressure, where demand for higher-end qualities has waned in favour of more competitively-priced coffees. However, the recoupling appears to indicate that the price differentials are now sufficiently narrow, and relative price-driven changes in demand (Arabica versus Robusta) may have come to an end.

Arbitrage, as measured between the London and New York Futures markets, narrowed by 1.6% to 45.23 US cents/lb in August 2023. 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 7.0%, a 0.8 percentage point decrease between July and August 2023. The Other Milds presented the strongest volatility decrease, with a 3.7 percentage point drop, averaging 7.3% for the month of August. The Colombian Milds’ and Brazilian Naturals’ volatility also contracted to 7.5% and 8.8%. Meanwhile, the Robustas’ volatility dropped by 2.3 percentage points to 8.7% from July to August 2023, whilst the London futures market’s volatility increased by 0.2 to 9.4%. However, the New York futures market’s volatility moved in the opposite direction from London, retracting by 0.5 percentage points and reaching 8.6% for New York.

The New York and London certified stocks decreased in tandem by 3.0% and 34.6%, respectively, closing in at 0.57 million 60-kg bags, whilst certified stocks of Robusta coffee reached 0.58 million 60-kg bags, the lowest in over 20 years.

Downward pressure on prices could be attributed to the lack of aggressive buying of green coffee through the world. Indeed, for the current and previous coffee years (2021/22 and 2022/23), a combined underproduction of 14.4 million 60-kg bags is estimated. At present, there is an apparent decoupling between consumption and exports. There is little evidence of the former falling, while the latter for the current coffee year is down 5.7%. A plausible explanation could be the drawing down of stocks. During the Covid-19 pandemic, buyers, roasters and traders would have built up large stocks of coffee that must now be utilised before they perish. This may help to explain why exports are falling, coffee year on coffee year, thus applying negative pressure on the I-CIP. The broad drawdown of stocks is perhaps, further illustrated by the historic lows of the ICE stocks.

Exports by Coffee Groups – Green Beans
Global green bean exports in July 2023 totalled 9.31 million bags, as compared with 9.3 million bags in the same month of the previous year, up 0.1%. As a result, the cumulative total for 2022/23 to July is 93.56 million bags versus 99.2 million bags over the same period a year ago, down 5.7%.

Shipments of the Other Milds decreased by 13.7% in July 2023 to 2.20 million bags from 2.55 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 10 months of coffee year 2022/23 to 18.64 million bags versus 21.22 million bags over the same period in 2021/22.

Green bean exports of the Brazilian Naturals increased in July 2023, rising by 2.8% to 2.6 million bags. For the first 10 months of coffee year 2022/23, green bean exports of the Brazilian Naturals amounted to 28.4 million bags, down 9.7% from 31.45 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 July 2023 (10.8%) to 2.7 million bags from 2.43 million bags in July 2022.

Exports of the Colombian Milds decreased by 8.1% to 0.93 million bags in July 2023 from 1.01 million bags in July 2022, driven primarily by Colombia, the main origin of this group of coffee, whose exports of green beans were down 16.0% in July 2023. This is the thirteenth consecutive month of negative growth for the Colombian Milds and, as a result, the exports of this group of coffee for October 2022 to July 2023 were down 12.9%, at 9.11 million bags from 10.46 million bags in the first 10 months of coffee year 2021/22.

Green bean exports of the Robustas amounted to 3.59 million bags in July 2023, as compared with 3.22 million bags in July 2022, up 11.6%. This is the fourth consecutive month of positive growth for the Robustas and, as a result, the exports of this group of coffee for October 2022 to July 2023 were up 3.8%, at 37.45 million bags, as compared with 36.08 million bags in the first 10 months of coffee year 2021/22.

Exports by Regions – All Forms of Coffee
In July 2023, South America’s exports of all forms of coffee decreased by 2.2% to 4.16 million bags, mainly driven by Colombia and Peru, which saw their exports fall by 17.1% and 37.5%, respectively. For Colombia, the latest downturn is the thirteenth consecutive month of negative growth, the second longest since the 22-month long streak observed between July 2008 and March 2010. As a result, Colombia’s exports for the first 10 months of coffee year 2022/23 are down to 8.79 million bags, the lowest level over the same 10-month period since coffee year 2012/13, when 7.24 million bags of coffee were shipped from the origin. Issues with local production, caused by meteorological factors, were the reason behind the downturn in exports for much of the current coffee year.

However, since June 2023, price substitution appears to be the main driver of the downturn in exports, with demand switching between the Arabicas, away from the Colombian Milds, of which Colombia is the largest producer, to the Other Milds. In Peru, the weather also played a part in the sharp decrease in exports. The Peruvian National Institute of Statistics and Informatics (INEI) reported that increased rainfall was behind the 1.9% decrease in production in June 2023, which may have filtered through to exports as a reduced availability of supply. However, the magnitude of the decrease in July 2023 is a more reflection of the 64.7% increase in July 2022 – the largest volume of July exports in the last 10 years (0.4 million bags versus an average 0.34 million bags (2013-2022)).

Exports of all forms of coffee from Africa decreased by 1.1% to 1.37 million bags in July 2023 from 1.39 million bags in July 2022. For the first 10 months of the current coffee year, exports totalled 10.84 million bags as compared with 11.27 million bags in coffee year 2021/22, down 3.8%. Once again, however, 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 (Tanzania and Uganda), with a combined 23.6% increase in July 2023, while two others experienced sharp negative growth rates (Côte d’Ivoire and Ethiopia), with a combined 26.7% 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. Uganda’s exports increased by 12.0% in July, which were driven by a good crop harvest in South-Western region, and exporters releasing their stocks.

In July 2023, exports of all forms of coffee from Mexico and Central America were up 9.4% to 1.66 million bags as compared with 1.51 million in July 2022. As a result, total exports are down 1.8% for October 2022-July 2023 at 13.46 million bags, as compared with 13.71 million bags in the same period a year ago. Honduras was the main driver of the positive growth in July 2023.

Exports of all forms of coffee from Asia and Oceania decreased by 6.2% to 3.01 million bags in July 2023 and but were up 2.7% to 38.57 million bags in the first 10 months of coffee year 2022/23. July’s downturn was due to the top four origins of the region, India (-3.5%), Indonesia (-9.7%), Papua New Guinea (-25.9%) and Vietnam (5.1%).

Exports of Coffee by Forms
Total exports of soluble coffee decreased by 16.6% in July 2023 to 0.84 million bags from 1.0 million bags in July 2022. In the first 10 months of coffee year 2022/23, a total of 9.58 million bags of soluble coffee were exported, representing a decrease of 5.7% from the 10.16 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 9.2% in July 2023, which matched the year-ago period. Brazil is the largest exporter of soluble coffee, shipping 0.31 million bags in July 2023.

Exports of roasted beans were down 12.7% in July 2023 to 57,299 bags, as compared with 65,601 bags in July 2022. The cumulative total for coffee year 2022/23 to June 2023 was 0.6 million bags, as compared with 0.67 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). For the full report, visit: icocoffee.org.

The post Robusta prices hit near record highs in August appeared first on Tea & Coffee Trade Journal.

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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Despite strengthening of the BRL, where conventionally Brazilian Naturals might see an uptick in price, they contracted 11.4% in the month of June, hinting that the current and upcoming favourable weather in the region outweighs the USD/BRL variation. The Robustas, on the other hand, have been supported by a strong London market, where the arbitrage has declined to a two-and-a-half-year low, as the rate of growth outpaces that of the Arabicas. 

Average prices for all group indicators decreased in June 2023, with the Robustas being an exception, gaining 7.8% and averaging 132.13 US cents/lb. The Colombian Milds and Other Milds decreased by 6.6% and 5.8%, to 211.85 and 207.39 US cents/lb, respectively, in June 2023. The Brazilian Naturals contracted by 5.5%, reaching an average of 176.48 US cents/lb. ICE’s New York market fell by 4.7%, whilst the London Futures market grew by 5.9% to 174.54 and 119.23 US cents/lb, respectively. 

The Colombian Milds-Other Milds differential contracted by 34.5% to 4.46 US cents/lb. The Colombian Milds-Brazilian Naturals and Colombian Milds-Robustas differentials both contracted 11.9 % and 23.6% from May to June 2023, averaging 35.36 and 79.72 US cents/lb in the latter month, respectively. The Other Milds-Brazilian Naturals differential presented a more moderate loss of 7.3%, averaging 30.90 US cents/lb. However, the Other Milds-Robustas and Brazilian Naturals-Robustas both contracted by 22.9% to 75.26 US cents/lb and by 31.0% to 44.36 US cents/lb, respectively. 

In June 2023, the Colombian Milds-Other Milds Arabica differential has been narrowing considerably where, in the latter third of June, the differential averaged -2.57 US cents/lb. The Colombian Milds declined at rate of 13.4% in June, whilst the Other Milds contracted at the rate of 9.6% for the same month. The faster rate of decline of the Colombian Milds compared to the Other Milds had a knock-on effect for the last seven business days of the month. The Colombian Milds-Other Milds differential turned negative, making the Other Milds more expensive than the Colombian Milds. This trend feeds into a wider phenomenon, where the Arabica and Robusta prices have been decoupled, with the Robustas benefitting from a price-driven demand substitution for cheaper coffee versus the higher-quality and priced Arabicas. However, it is important to note that only Colombia, Kenya and Tanzania produce Colombian Milds, thereby making any shifts on the demand side more noticeable due to the smaller share of the total Arabica production. Thus, due to strong demand for Robustas in the month of June, they lost a marginal 1.8%, albeit exhibiting the highest monthly average since February 1995. 

The current Arabica-Robusta differentials are at their lowest point since October 2020, where demand for higher end qualities has waned in favour of more competitively priced coffees. Groups of coffee with varying qualities are seeing their differentials tighten throughout the board. This convergence marks a three-and-a-half-year low for the Colombian Milds-Brazilian Naturals, Colombian Milds-Robustas, Other Milds-Brazilian Naturals and Other Milds-Robustas differentials. The tightening of the spread between different growths can be attributed to the global increase in interest rates, actioned by the European Central Bank, the Bank of England and the US Treasury. 

This has the direct effect of making money more expensive to borrow, thereby limiting extensive leverage to coffee supply chain stakeholders as interest rate repayment fees eat disproportionately into operations profits. In turn, this limits how big purchasing budgets can be, with buyers focusing on more competitive origins and shying away from the more expensive growths. The trend of consumers and manufacturers shifting towards cheaper Robustas, due to the high cost of living, and the greater availability of coffee due to the ongoing harvest of the world’s largest Arabica producer (Brazil), may together explain the Arabica differentials being at a three-and-a-half-year low, in addition to a continuous rise in the price of Robustas. 

Arbitrage, as measured between the London and New York Futures markets, contracted by 22.6% to 50.31 US cents/lb in June 2023 as the Robusta growth rate outstripped the New York Market. This marks the lowest point since November 2020, where arbitrage sat at 52.66 US cents/lb. Intra-day volatility of the I-CIP followed a consistent downtrend, reaching 8.1%, a 0.5 percentage point decrease between May and June 2023. The Other Milds and Robustas presented the strongest volatility increases, with a 0.8 percentage point expansion, averaging 11.1% and 8.2% for the month of June. Whilst the Colombian Milds’ and Brazilian Naturals’ volatility contracted to 8.2% and 9.5%, the Robustas’ volatility expanded by 0.8 percentage points to 8.2% from May to June 2023. However, the London and New York futures markets’ volatility moved in the opposite direction from one another, retracting by 0.8 percentage points and reaching 9.6% for New York, whilst the Robusta contraction averaged 8.2% in June 2023, a 0.7 percentage point increase. 

The New York and London certified stocks decreased in tandem by 8.5% and 9.7%, respectively, closing in at 0.60 million 60-kg bags, whilst certified stocks of Robusta coffee reached 1.25 million 60-kg bags.  

Exports by Coffee Groups – Green Beans 

Global green bean exports in May 2023 totalled 9.56 million bags, as compared with 9.61 million bags in the same month of the previous year, down 0.6%. The downturn was driven by the Colombian Milds and the Brazilian Naturals. This is the sixth consecutive month of negative growth for total exports of green beans since the start of coffee year 2022/23. As a result, the cumulative total for 2022/23 to May is 74.59 million bags, down 5.6% from the year-ago period to 79.01 million bags. 

Shipments of the Other Milds increased by 8.7% in May 2023 to 2.57 million bags from 2.36 million bags in the same period last year. This is the second month of positive growth for green bean exports of the Other Milds since March 2022, when it increased by 1.9%. Despite the rebound, the cumulative volume of exports continued to fall, decreasing by 10.5% in the first eight months of coffee year 2022/23 to 13.77 million bags versus 15.38 million bags over the same period in 2021/22. 

Green bean exports of the Brazilian Naturals fell in May 2023, falling by 14.8% to 2.43 million bags. For the first eight months of coffee year 2022/23, green bean exports of the Brazilian Naturals amounted to 23.4 million bags, down 9.8% from 25.93 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 green bean exports, the biggest producer and exporter of the Brazilian Naturals, which also fell in May 2023 (-16.2%) to 2.12 million bags from 2.53 million bags in May 2022. 

Exports of the Colombian Milds decreased by 7.2% to 0.91 million bags in May 2023 from 0.98 million bags in May 2022, driven primarily by Colombia, the main origin of this group of coffee, whose exports of green beans were down 10.3% in May 2023. This is the eleventh consecutive month of negative growth for the Colombian Milds and, as a result, the exports of this group of coffee for October 2022 to May 2023 were down 14.1%, at 7.28 million bags, as compared with 8.48 million bags in the first eight months of coffee year 2021/22. 

Green bean exports of the Robustas amounted to 3.65 million bags in May 2023, as compared with 3.42 million bags in May 2022, up 6.8%. In the first eight months of coffee year 2022/23, 30.13 million bags of Robustas were exported as compared with 29.22 million bags in the same period in 2021/22. 

Exports by Regions – All Forms of Coffee 

In May 2023, South America’s exports of all forms of coffee decreased by 11.5% to 3.47 million bags, driven by the three main origins of the region, Brazil, Colombia and Peru, which saw their combined exports fall by 12.29%. The two major origins of the region, Brazil and Colombia, saw their respective shipments of coffee decrease by 12.2% and 10.6% in May 2023, falling to 2.46 million and 0.85 million bags. In both countries, the availability of supply is the reason behind the decreases in their respective exports. Heavy rain led to a 21% fall in production in May 2023 in Colombia, while Brazil’s supply is relatively tight due to the two consecutive years of below-par harvests, especially in the current 2022/23 season which has been hampered by both frost and droughts. 

Peru is continuing to see its exports fall at a significantly faster rate, plunging by 24.9% in May 2023. Again, erratic weather played a part in Peru’s downturn, in addition to continuing social unrest which began in December 2022. However, the main reason behind the exceptional rate of decrease in May 2023 is mechanical. The May 2022 growth rate was up 54.7% at 137,948 bags, while the average volume of exports for May in 2014–2021 was 97,969 bags and 103,649 in May 2023, a 5.7% increase when compared against the average. 

Exports of all forms of coffee from Africa decreased by 7.2% to 1.14 million bags in May 2023 from 1.23 million bags in May 2022. For the first eight months of the current coffee year, exports totalled 8.1 million bags as compared with 8.6 million bags in coffee year 2021/22, down 5.8%. Côte d’Ivoire and Ethiopia are the main drivers behind the fall in the region’s exports, with their combined shipments decreasing by 19.4% to 0.45 million bags as compared with 0.56 million bags in May 2022. In Ethiopia, contract disputes arising out of a mismatch between the local purchasing prices and global market prices have been affecting the volume of exports since the early months of 2023, with exporters withholding the coffee until the disputes are resolved. 

In May 2023, exports of all forms of coffee from Mexico and Central America were up 12.4% to 2.14 million bags as compared with 1.91 million in May 2022. This latest month of positive growth is the third in the first eight months of the current coffee year. As a result, the rate of decrease of the cumulative total has decelerated sharply, up to 2.1% in the first eight months of the current coffee year, totalling 10.03 million bags, as compared with 5.4% rate of fall for the first seven months. Honduras was the main driver of the positive growth in May 2023, up 58.0%, to 0.83 million bags from 0.52 million bags in May 2022, the biggest rate of growth for the month of May since its 80.4% increase in 2000. This large jump in exports was mainly due to two factors. The first was mechanical, reflecting the 37.3% year-on-year (YOY) decrease in exports in May 2022, while the second was logistical, where deliveries scheduled for April 2023 were delayed to May. In the first eight months of the current coffee year, Honduras has exported 3.58 million bags, as compared with 3.33 million bags in 2021/22, up 7.5%. 

Exports of all forms of coffee from Asia and Oceania increased by 13.1% to 3.94 million bags in May 2023 and rose 3.2% to 31.73 million bags in the first eight months of coffee year 2022/23. Indonesia is the main source of the strong positive growth rate of the region, with exports increasing by 171.7% in May 2023, which in turn is a reflection of the 52.8% YOY fall in May 2022. Indonesia’s average exports for May amount to 0.54 million bags (2017–2021), though these fell to 0.23 million bags in May 2022 before leaping back up to 0.62 million bags in May 2023, the fourth highest volume for the month on record. Measured against the average (2017–2021), the May 2023 exports are up 14.9%, more in line with the year-to-date growth rate of 8.1% (October–May 2022/2023 vs 2021/22). 

Exports of Coffee by Forms 

Total exports of soluble coffee increased by 24.6% in May 2023 to 1.07 million bags from 0.86 million bags in May 2022. In the first eight months of coffee year 2022/23, a total of 7.93 million bags of soluble coffee were exported, representing a decrease of 0.4% from the 7.96 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 9.6% (measured on a moving 12-month average) in May 2023, up from 9.0% in May 2022. Brazil is the largest exporter of soluble coffee, shipping 0.32 million bags in May 2023. 

Exports of roasted beans were down 4.8% in May 2023 to 72,925 bags, as compared with 68,003 bags in May 2022. The cumulative total for coffee year 2022/23 to May 2023 was 0.48 million bags, versus 0.52 million bags in the year-ago period. 

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 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. 

For the ICO’s full Coffee Report and Outlook (CRO), visit: icocoffee.org. 

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The Coffee Clubs project is carried out together with a partner in the regions of Mbeya and Mbozi in Tanzania. Martha Kimboi coordinates the now seven coffee clubs:

“We were expecting 50 young people per school – currently there are almost 700 who take part in the coffee clubs in total. I am incredibly proud to be able to train and promote what may be the next generation of coffee farmers!” Martha Kimboi, project manager, Tanzania Coffee Clubs, commented.

Making coffee cultivation more sustainable

In Tanzania’s coffee-growing regions, it is common for children to take over their parents’ coffee farms – often due to a lack of other work alternatives. The farms are run for generations and the knowledge is passed on from generation to generation without further developing the cultivation techniques. At the same time, unsustainable coffee cultivation is not lucrative for farmers in the long run.

This is where the Coffee Club project comes in and focuses on sustainable coffee cultivation in order to secure coffee cultivation in the regions in the future. For example, the young farmers learn what natural fertilisers are available, how to best protect water and soil, and which sales channels are suitable for sustainable coffee.

The coffee yield from the school clubs has grown steadily since the beginning of the project. Now Tchibo has been able to purchase the coffee from the coffee clubs and produce the special rarity “Kahawa Skuli” for the first time. The sale of coffee means an additional source of income for the young farmers, for example for new school books.

“The young people are incredibly proud to be part of the project. They’d love to start right away and plant as many trees as they can, as they now see how they’re making a profit by harvesting their own coffee,” said Martha Kimboi.

The rarity “Kahawa Skuli” tastes like blackberry and dark chocolate and will be available at a price of €9.99 per 500 g whole bean.

For more informaiton, visit: tchibo.com.

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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 Colombian Milds and Other Milds increased by 8.9% and 11.1%, to 238.39 and 229.73 US cents/lb, respectively, in February 2023. However, the Brazilian Naturals and the Robustas gained 14.8% and 8.3%, reaching an average of 195.18 and 103.93 US cents/lb. The London Futures market grew 9.8% whilst ICE’s New York market shrank by 13.2%. The Colombian Milds-Other Milds and Colombian Milds-Brazilian Naturals differentials are leading the way, shrinking 28.8% and 11.6% to 8.66 and 43.21 US cents/lb, respectively. The Other Milds-Brazilian Naturals differential also lost 5.9%, averaging 34.55 US cents/lb for the month of February 2023.

Conversely, the Colombian Milds-Robustas and Other Milds-Robustas differentials grew by 9.4% and 13.6%, closing the month at 134.46 and 125.80 US cents/lb. The Brazilian Naturals-Robustas differential presented the strongest growth of 23.2% from January 2023 to February 2023, reaching 91.25 US cents/lb.

The arbitrage, as measured between the New York and London Futures market expanded 17.2%, closing in at 86.67 US cents/lb in February 2023, from 73.97 US cents/lb in January 2023.

Intra-day volatility of the I-CIP increased 0.1 percentage point between January 2023 and February 2023, reaching 8.7%. Robustas and the London Futures market were the least volatile amongst all group indicators, at 6.2% and 7.8%, respectively, in February 2023. The Brazilian Naturals’ volatility was the highest amongst the group indicators, averaging 12.1%, a 0.3 percentage point increase from the previous month. Whilst the volatility of the Colombian Milds stayed constant at 9.2%, the Other Milds, contracted 0.1 percentage point to 8.8%. The variation of the New York Futures market’s volatility increased by 0.3 percentage point, averaging 12.6% for the month of February 2023.

The New York certified stocks decreased by 5.1% from the previous month, closing in at 0.86 million 60-kg bags, whilst certified stocks of Robusta coffee reached 1.19 million 60-kg bags, representing an increase of 13.8%.

Exports by Coffee Groups – Green Beans
Global green bean exports in January 2023 totalled 8.69 million bags, as compared with 10.23 million bags in the same month of the previous year, down 15.0%. 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 5.4%, as compared with 1.8% decrease for the first three months of the current coffee year. The cumulative total for 2022/23 to January is 35.86 million bags as compared with 37.9 million bags over the same period a year ago.

Shipments of the Other Milds decreased by 17.7% in January 2023 to 1.59 million bags from 1.93 million bags in the same period last year. This is the fourth consecutive month of negative growth for green bean exports of the Other Milds since the start of the current coffee year. As a result, the cumulative volume of exports fell by 18.1% in the first four months of coffee year 2022/23 to 5.11 million bags from 6.24 million bags over the same period in coffee year 2021/22. The region’s latest decline was due to a confluence of downturns in El Salvador (-63.4%), Guatemala (-40.5%) and Nicaragua (-23.2%) against upturns in Honduras (+2.8%) and Mexico (+106.7%), with the negative growth rates of the former group of origins overwhelming the gains of the latter.

Green bean exports of the Brazilian Naturals fell in January 2023, falling by 17.2% to 2.78 million bags. For the first four months of coffee year 2022/23, green bean exports of the Brazilian Naturals amounted to 13.1 million bags, down 0.1% from 13.11 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 Brazilian Naturals, which also fell in January 2023 (down 18.1%) to 2.52 million bags from 3.08 million bags in January 2022.

Exports of the Colombian Milds decreased by 20.9% to 0.87 million bags in January 2023 from 1.1 million bags in January 2022, driven primarily by Colombia, the main origin of this group of coffee, whose exports of green beans were down 19.4% in January 2023. As a result of the sharp downturn, exports of the Colombian Milds from October 2022 to January 2023 were down by 15.9%, at 3.68 million bags, as compared with 4.37 million bags in the first four months of coffee year 2021/22.

Green bean exports of the Robustas amounted to 3.45 million bags in January 2023, as compared with 3.84 million bags in January 2022, down 10.1%, bookending the growth rates of the first four months of the current coffee year, which had opened with a 6.8% downturn, followed by two consecutive months of positive growth. As a result, the shipments in the first four months of coffee year 2022/23 were down 1.4% to 13.97 million bags from 14.18 million bags in the same period in coffee year 2021/22.

Exports by Regions – All Forms of Coffee
In January 2023, South America’s exports of all forms of coffee decreased by 19.9% to 3.93 million bags, driven by the three main origins of the region, Brazil, Colombia and Peru, which saw their combined exports fall by 20.9%. The two major origins of the region, Brazil and Colombia, saw their respective shipments of coffee decrease by 16.0% and 18.8% in January 2023, falling to 2.86 million bags and 0.85 million bags, respectively, from 3.4 million bags and 1.05 million bags in January 2022. Peru is continuing to see its exports fall by a significantly greater rate, plunging by 63.9% in January 2023, which follows 41.5% downturns in November and December 2022. For Colombia, the sharp downturns continue to be linked to local production conditions, which have been hampered by persistent bad weather linked to the La Niña phenomenon.

In January 2023, Colombia’s production recorded zero growth, following four consecutive months of negative growth, leading the total coffee output for the twelve months to January 2023 to decrease by 10% to 11.08 million bags from 12.36 million bags in the same period a year ago. In Peru, the negative impact of the weather on the origin’s exports has already been addressed in recent issues of the CMR, with social unrest in the country being an additional causal component introduced in the January 2023 issue. However, the size of the plunge in export volume in January 2023 is technical and reflects the anomalous export volume observed in January 2022, in which 435,961 bags of coffee were shipped, the largest export volume for the month of January on record and 53% greater than the second-largest. The average export volume over the past six years, 2016–2021, is 195,565 bags; measured against this, the January 2023 exports are down 19.5%, which is more in line with the region and Brazil and Colombia’s performances.

Exports of all forms of coffee from Asia and Oceania decreased by 17.2% to 3.45 million bags in January 2023 and were down 3.3% to 14.42 million bags in the first four months of coffee year 2022/23. The region’s top three origins are the main drivers for the latest downturn, with the exports of Vietnam down 12.7% to 2.45 million bags from 2.8 million bags in January 2022. Likewise, India and Indonesia’s exports declined by 39.7% to 0.34 million bags from 0.56 million bags and 18.8% to 0.58 million bags from 0.72 million bags in January 2022, respectively.

The New Year and Lunar New Year holidays coincided in January 2023, a rare event, leading to a shortfall of business days, thus explaining the decrease in exports from Indonesia and Vietnam.

Exports of all forms of coffee from Africa increased by 19.5% to 1.11 million bags in January 2023 from 0.93 million bags in January 2022. For the first four months of the current coffee year, exports totalled 4.22 million bags as compared with 4.15 million bags in coffee year 2021/22, up 1.4%. Uganda is the main driver behind the jump in the region’s exports, with coffee shipments from the region’s largest producer and exporter increasing by 22.9% to 0.49 million bags, as compared with 0.4 million bags in January 2022. Significantly, it ended 12 consecutive months of decreasing exports, which had led the origin’s cumulative total exports over the past year (January–December 2022) to fall to 5.63 million bags as compared with 6.77 million bags between January and December 2021, down 16.9% or 1.14 million bags.

Drought in most of the coffee growing regions has led to a lower and shorter main harvest season in central and eastern parts of Uganda and hence lower output; however, exports are up in January 2023 because of a stocks drawdown on the back of rising prices for Robustas which in turn were responding to the reduced global supply, especially from Indonesia and Vietnam. Côte d’Ivoire and Tanzania are two other origins of note for January 2023, with their exports up 105.8% and 17.8%, respectively.

In January 2023, exports of all forms of coffee from Mexico and Central America were down 5.0% to 1.21 million bags as compared with 1.27 million in January 2022. For the first four months of the current coffee year, exports are also down 11.4%, totalling 2.75 million bags as compared with 3.1 million bags in October–January 2021/22. As mentioned previously, the region’s latest decline, the fourth in a row since the start of coffee year 2022/23, was due to a confluence of downturns in El Salvador (-58.3%), Guatemala (-40.9%) and Nicaragua (-22.5%) against upturns in Honduras (+2.8%) and Mexico (+61.4%), with the negative growth of the former group overwhelming the gains of the latter. The 2.8% increase for Honduras is the first uptick since January 2022, and reflects the fact that the origin finds itself deep in its harvesting season with a build-up of sufficient supply to meet its contractual obligations.

Exports of Coffee by Forms
Total exports of soluble coffee decreased by 3.0% in January 2023 to 0.95 million bags from 0.98 million bags in January 2022. In the first four months of coffee year 2022/23, a total of 3.75 million bags of soluble coffee were exported, representing a decrease of 11.2% from the 4.22 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 January 2023, as in January 2022. Brazil is the largest exporter of soluble coffee and shipped 0.34 million bags in January 2023.

Exports of roasted beans were down 9.2% in January 2023 to 61,683 bags, as compared with 67,918 bags in January 2022. The cumulative total for coffee year 2022/23 to January 2023 was 278,977 bags, as compared with 289,578 bags in the same period a year ago.

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 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.

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The ICO Composite Indicator Price (I-CIP) gained 0.3% from November to December 2022, averaging 157.19 US cents/lb for the latter, whilst posting a median value of 157.73 US cents/lb. In December 2022, the I-CIP fluctuated between 151.95 and 162.31 US cents/lb.

Average prices for all group indicators remained stable, with a slight increase in December 2022. The Colombian Milds, Brazilian Naturals and Robustas increased by 0.4%, 1.5% and 1.3%, respectively, month on month in December 2022. The group indicators respectively averaged 224.12, 169.00 and 93.76 US cents/lb in December. The Other Milds fell by 1.7% to 210.24 US cents/lb. Stability in the market is in part due to the average of the 2nd and 3rd positions of the ICE New York and London futures market remaining stable.

The Colombian Milds-Other Milds differential sprung back up 48.2% to 13.88 US cents/lb. The Colombian Milds-Brazilian Naturals and Other Milds-Brazilian Naturals both declined by 2.8% and 12.8% to 55.12 and 41.24 US cents/lb in December 2022, respectively. The Colombian Milds Robustas differential remained stable, losing only 0.2 percentage points and reaching 130.36 US cents/lb for the last month of 2022. Falling 3.9% over the course of the month was the Other Milds-Robustas differential, retracting 3.9%, to 116.48 US cents/lb. The Brazilian Naturals-Robustas differential gained 1.8% from November to December 2022, reaching 75.24 US cents/lb. The arbitrage between the New York and London Futures gained 0.2%, closing in at 82.26 US cents/lb in December 2022, up from 82.13 US cents/lb in November 2022.

Intra-day volatility of the I-CIP decreased 0.2 percentage points between November and December 2022, reaching 9.1%. Robustas and the London futures market were the least volatile amongst all group indicators, at 5.3% and 4.8%, respectively, in December 2022. The Brazilian Naturals’ volatility was the highest amongst the group indicators, averaging 12.1%, a 0.2 percentage point increase from the previous month. The variation in volatility of the Colombian Milds and Other Milds for November to December 2022 is 0.6 to 11.6% and 0.1 to 9.7%, respectively. The New York futures market remained the most volatile, averaging 12.5% for the month of December 2022.

The New York certified stocks increased by 46.6% from the previous month, closing in at 0.87 million 60-kg bags, whilst certified stocks of Robusta coffee reached 1.08 million 60-kg bags, representing a decrease of 25.5%.

Exports by Coffee Groups – Green Beans
Global green bean exports in November 2022 totalled 9.21 million bags, as compared with 8.31 million bags in the same month of the previous year, up 10.8%. The positive growth was driven by the Brazilian Naturals and Robustas, which saw their exports increase by double digits, while the Colombian and Other Milds suffered from double-digit decreases. As a result, the cumulative total exports of green beans for coffee year 2022/23 bounced back into black, up 3.5% as compared with the 3.5% decrease for the first month of the current coffee year. The cumulative total for 2022/23 to November is 17.63 million bags as compared with 17.03 million bags over the same period a year ago.

Green bean exports of the Brazilian Naturals bounced back sharply in November 2022, rocketing up by 34.5% to 3.67 million bags, following a lackluster 0.5% increase in October 2022 as compared with the same periods in the previous coffee year. For the first two months of coffee year 2022/23, green bean exports of the Brazilian Naturals amounted to 7.11 million bags, up 15.6% from 6.15 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 Brazilian Naturals, which also bounced back in November 2022 (up 32%) as compared with October 2022 (up 1.9%).

Green bean exports of Robustas amounted to 3.58 million bags in November 2022, as compared with 3.17 million bags in November 2021, up 12.9%, a sharp turnaround from the 5.5% decrease in October 2022. This meant that the shipments in the first two months of coffee year 2022/23 were up 4% to 6.38 million bags versus 6.13 million bags in the same period in coffee year 2021/22

Shipments of the Other Milds decreased by 15.1% in November 2022 to 1.1 million bags from 1.29 million bags in the same period last year. This is the second consecutive month of negative growth for green bean exports of the Other Milds since the start of the new coffee year, having already fallen by 7.1% in October 2022. As a result, the cumulative volume of exports fell by 11% in the first two months of coffee year 2022/23 to 2.36 million bags from 2.65 million bags over the same period in coffee year 2021/22.

Exports of the Colombian Milds decreased by 22.8% to 0.86 million bags in November 2022 from 1.12 million bags in November 2021, driven primarily by Colombia, the main origin of this coffee group, whose green bean exports were down 26.7% in November 2022. As a result of the sharp downturn, exports of the Colombian Milds from October to November 2022 were down by 15.2%, at 1.78 million bags, as compared with 2.1 million bags in the first two months of coffee year 2021/22.

Exports by Regions – All Forms of Coffee
In November 2022, South America’s exports of all forms of coffee increased by 4.7% to 4.96 million bags. There were wide variations in the performances of November 2022 exports among the major origins of the region, with Brazil (up 25.4%) being the best performing, and Peru (down 41.5%) and Colombia (down 24.2%) the worst performing. Improved shipping conditions have been reported as the reason behind the strong increase in Brazil’s exports, but for Peru and Colombia the sharp downturns are linked to local production conditions. Persistent bad weather linked to the La Niña phenomenon has caused Colombia’s November 2022 coffee output to drop by 6%, the country’s third consecutive month of negative growth, with a consequent impact on exports. In Peru, irregular weather patterns have led to prolonged and intermittent rains, which impacted the regular development of cherries and flowers, leading to coffee trees having both cherries and flowers concurrently and thus spreading out the harvesting period. Moreover, intermittent rains also hampered the drying process, having a negative impact on the quality of dried beans. These all affected the supply of coffee beans and contributed to November 2022 having the lowest volume of exports since 2007, when only 244,325 bags were shipped from Peru.

Exports of all forms of coffee from Asia and Oceania increased by 19% to 3.78 million bags in November 2022 and were up 3.6% to 6.57 million bags in the first two months of coffee year 2022/23. The region’s sharp increase is explained by Vietnam (up 19.8%) and Indonesia (up 48.7%), the largest and the second-largest producers and exporters of coffee from Asia and Oceania, shipping 2.2 million bags and 0.89 million bags, respectively. However, the region’s third-largest exporter, India, saw its exports decrease in November 2022, down 0.8% to 0.58 million bags from 0.59 million bags in November 2021.

Exports of all forms of coffee from Africa increased by 6.8% to 1.09 million bags in November 2022 from 1.02 million bags in November 2021. For the first two months of the current coffee year, exports totalled 2.16 million bags as compared with 2.15 million bags in coffee year 2021/22. In November 2022, Uganda’s exports fell for the 11th consecutive month, decreasing by 14.8% to 0.45 million bags from 0.52 million bags in November 2022. Uganda’s cumulative total exports over the past 11 months (January–November 2022) amount to 5.21 million bags as compared with 6.23 million bags over the same period a year ago (January–November 2021), down 16.4% or 1.02 million bags. 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. Despite Uganda’s large negative push downwards on Africa’s coffee exports in November 2022, positive pulls upwards by Côte d’Ivoire (up 111.1%) and Ethiopia (up 29.2%), the region’s third- and second-largest producers and exporters, supported by Kenya (up 16.6%) and Rwanda (up 63.6%), were sufficiently robust to ensure that the region’s exports grew in November 2022, despite the downturn in Uganda’s exports.

In November 2022, exports of all forms of coffee from Mexico and Central America were down 7.1% to 0.41 million bags as compared with 0.45 million in November 2021. For the first two months of the current coffee year, exports are down 13.3%, totalling 0.89 million bags as compared with 1.02 million bags in October–November 2021/22. The region’s decline in November was due to Honduras, down 50%, which is struggling with leaf-rust, or roya, which has hit the industry’s harvests.

Exports of Coffee by Forms
Total exports of soluble coffee decreased by 3.2% in November 2022 to 0.97 million bags from 1.0 million bags in November 2021. In the first two months of coffee year 2022/23, a total of 1.81 million bags of soluble coffee were exported, representing a decrease of 12.9% from the 2.07 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 November 2022, down from 9.1% in November 2021. Brazil is the largest exporter of soluble coffee, shipping 0.27 million bags in November 2022, followed by India with 0.19 million bags and Indonesia with 0.15 million bags exported over the same period.

Exports of roasted beans were down 7.5% in November 2022 to 68,865 bags, as compared with 74,411 bags in November 2021. The cumulative total for coffee year 2022/23 to November 2022 was 130,953 bags, as compared with 149,108 bags in same period a year ago.

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.

For the full report, visit: ico.org.

The post Coffee prices end 2022 on a stable note appeared first on Tea & Coffee Trade Journal.

Average prices for all group indicators decreased in November 2022. The Colombian Milds and Other Milds, decreased by 14.8% and 10.9%, respectively, month on month in November. The former averaged 223.22 US cents/lb in November 2022, whilst the latter averaged 213.85 US cents/lb. The Brazilian Naturals fell by 13.4% to 166.54 US cents/lb. The Robustas fell below the 100 US cents/lb mark, averaging 92.59 US cents/lb for the month of November, a 10.1% decline from the previous month. The downturns are in part due to the average 2nd and 3rd positions of the ICE New York futures market, which lost 14.0% in November 2022 over October 2022. The average of the 2nd and 3rd positions of the ICE Futures Europe for the Robustas also shrank by 10.3%. The Colombian Milds-Other Milds differential suffered a month-on-month loss of 57.2%, closing in at 9.37 US cents/lb for November 2022.

The Colombian Milds-Brazilian Naturals and Colombian Milds-Robustas differentials declined by 18.7% and 17.8% to 56.68 and 130.63 US cents/lb in November 2022, respectively. Falling the least was the Other Milds Brazilian Naturals differential, declining by only 1.0%, to 47.31 US cents/lb. The Other Milds Robustas differential lost 11.5% from October to November 2022 reaching 121.26 US cents/lb. The Brazilian Naturals-Robusta differential retracted 17.2% to 73.95 US cents/lb for the aforementioned period.

The arbitrage between the New York and London Futures markets shrunk by 17.5%, falling to 82.13 US Cents/lb in November 2022 from 99.56 US cents/lb in October 2022 precipitated by the faster rate of price decline of Arabica compared with Robusta.

Intra-day volatility of the I-CIP increased 2.2 percentage points between October and November 2022, reaching 9.3%. Robustas and the London futures market were the least volatile amongst all group indicators, at 7.2% and 7.1%, respectively, in November 2022. The Brazilian Naturals’ volatility was the highest amongst the group indicators, averaging 11.9%, a 2.3 percentage point increase from the previous month. The variation in volatility of the Colombian Milds and Other Milds for October to November 2022 is 3.6 to 11.0% and 2.0 to 9.6%, respectively. The New York futures market remained the most volatile, posting an increase of 2.7 percentage points, averaging 12.5% for the month of November 2022.

The New York certified stocks increased by 45.3% from the previous month, closing in at 0.59 million bags, whilst certified stocks of Robusta coffee reached 1.45 million bags, representing a decrease of 4.6%.

Exports by Coffee Groups – Green Beans
Global exports of green beans in October 2022 totalled 8.5 million bags, compared with 8.72 million bags in the same month of the previous year, down 2.5%. The downturn was spread across most of the coffee groups, with the Brazilian Naturals alone starting the new coffee year on a positive footing with an uptick of 0.5%, the third consecutive months of positive growth, exporting 3.44 million bags of green beans.

The positive start to the new coffee year made by the Brazilian Naturals was driven by Brazil, the biggest producer and exporter of the Brazilian Naturals, with a 1.9% increase in the exports of green beans, outweighing the downturns of the other major origins of the Brazilian Naturals group – Ethiopia (-10.9%), Uganda (-6.0%) and Vietnam (-19.5%).

Exports of the Colombian Milds decreased by 4.1% to 0.94 million bags in October 2022 from 0.98 million bags in October 2021, driven by the contractions in Colombia and Tanzania whose exports of green beans were down 6.0% and 2.3%, respectively. Within this coffee group, Kenya alone started the new coffee year on a bright note, exporting an additional 46.2% of green beans in October 2022 as compared with October 2021. The decline in October 2022 is the fourth in a row for Colombia, and another month in which production is at fault for the decreasing exports – in October 2022 Colombia’s coffee output fell by 12%. The Colombian Coffee Growers Federation (FNC) attributed the decline in production to excess rains due to the La Niña event, which translated into excess water, less sunlight, and fewer blooms in coffee plantations.

Shipments of the Other Milds decreased by 4.3% in October 2022 to 1.3 million bags from 1.36 million bags in the same period last year. Guatemala (-28.0%), Honduras (-49.2%) and Peru (-8.4%) were behind this fall. In Honduras, the coffee industry continues to struggle with leaf rust, which is affecting production, while Guatemala’s output is being hampered due to climatic reasons and the availability of labour, all of which are having a knock-on effect on the countries’ exports.

Of the four coffee groups, the Robustas have recorded the worst performance in the new coffee year 2022/23, with exports falling by 4.8% to 2.82 million bags from 2.96 million bags. Except for India and Indonesia, all major origins within the Robustas group saw their exports of green beans fall in October 2022 – Uganda (-6.0%) and Vietnam (-19.5%). Uganda is still facing drought in most of its coffee-growing regions, which has led and is continuing to lead to lower outputs and, subsequently, lower exports.

Exports by Regions – All Forms of Coffee
In October 2022, South America’s exports of all forms of coffee decreased marginally by 0.2% to 4.99 million bags. The marginality of the growth rate was largely the result of increases in the exports of Brazil (1.1%) and Ecuador (48.3%), edged by the decreases in exports of Colombia (-2.3%) and Peru (-9.4%).

Exports of all forms of coffee from Asia and Oceania totalled 3.17 million bags in October 2022, 10,000 bags greater than in October 2021. The region’s miniscule growth rate, however, belies the strong growth rates amongst the major origins; India and Indonesia made gains of 15.1% to 0.54 million bags and 34.5% to 1.12 million bags, respectively, while Vietnam suffered a 19.5% fall to 1.37 million bags.

Exports of all forms of coffee from Africa decreased by 2.4% to 1.1 million bags in October 2022 from 1.13 million bags in October 2021. Ethiopia and Uganda were the two main origins behind the region’s downturn in exports in October 2022, with the respective growth rates of shipped coffee at -10.9% and -6.0%. The fact that Africa’s decrease of exports was softer than as suggested by the growth rates of the region’s top two biggest exporters is down to the counterweights of Burundi (316.7%), Côte d’Ivoire (83.2%) and Kenya (46.3%). However, the greater-than-normal growth rates of the three origins do not reflect fundamental changes to the respective domestic coffee industries but are technical anomalies due to large negative growth rates in October 2021. Burundi’s exports of all forms of coffee were down 66.5% and Côte d’Ivoire and Kenya by 79.1% and 54.1%, respectively.

In October 2022, exports of all forms of coffee from Mexico and Central America were down 14.6% to 0.49 million bags as compared with 0.57 million in October 2021. Of the 12 origins in the region only the Dominican Republic (10.5%), Mexico (1.1%) Nicaragua (24.6%) and Trinidad & Tobago (259.2%) saw exports increase in October 2022. Honduras exports fell by 49.2% in October 2022, with the volume of all forms of coffee shipped decreasing to 40,842 bags as compared with 80,328 bags. The origin continues to suffer from the impact of leaf-rust which affected the output of coffee year 2021/22 and is now having an adverse effect in the supply available for export. Of the region’s major origins (million bags and over), Costa Rica suffered the steepest fall, with its exports falling by 68.9% in October 2022 to 9,216 bags, as compared with 13,052 bags in the same period a year ago. The volume shipped in October 2022 is the lowest since September 1976, when 7,093 bags were exported. Costa Rica’s coffee institute, ICAFE, cites lower-than-expected production in coffee year 2021/22 as the reason for the drop in exports.

Exports of Coffee by Forms
Total exports of soluble coffee increased by 10.9% in October 2022 to 1.19 million bags from 1.07 million bags in October 2021. The share of soluble coffee in the total exports of all forms of coffee was 9.5% (measured on a moving 12-month average) in October 2022 as compared with 8.9% in October 2021. Brazil is the largest exporter of soluble coffee, and the country shipped 291,345 bags in October 2022, down 6.2% from 310,731 bags in October 2021. The second and third placed origins, India and Indonesia, however started the new coffee year at a gallop, with their soluble coffee exports up 25.0% and 33.7%, at 180,000 bags and 397,805 bags, respectively, in October 2022.

Exports of roasted beans decreased by 18.0% in October 2022 to 61,226 bags from 74,697 bags in October 2021.

Production and Consumption
The latest provisional outlook for total production in coffee year 2022/23 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 2022/23 as compared to 164.9 million for coffee year 2020/21. In 2022/23, consumption is expected to exceed production by 3.1 million bags.

For the full report, visit: ico.org.

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The I-CIP lost 10.6% from September to October 2022, averaging 178.54 US cents/lb for the latter, whilst posting a median value of 177.22 US cents/lb. In October 2022, the I-CIP fluctuated in between 159.30 and 194.92 US cents/lb.

Average prices for all groups indicators decreased in October 2022. The Colombian Milds and Other Milds, decreased by 10.9% and 10.2%, respectively, month-on-month in October. The former averaged 261.95 US cents/lb in October 2022, whilst the latter averaged 240.08 US cents/lb. The Brazilian Naturals declined the most within all four groups, falling 12.4% to 192.27 US cents/lb. The Robustas averaged 103.01 US cents/lb for the month of October, a 7.5% decline from the previous month. The downturns are in part due to the average second and third positions of the ICE New York futures market, which lost 12.1% in October 2022 versus September 2022. The average of the second and third positions of the ICE Futures Europe for the Robustas also shrank by 8.3%.

The Colombian Milds-Other Milds and the Brazilian Naturals-Robusta differential both took the hardest hit from September to October 2022, retracting 17.8% and 17.5%. The differential for the aforementioned period shrank from 26.60 to 21.87 US cents/lb and 108.23 to 89.25 US cents/lb. The Colombian Milds-Brazilian Naturals differential declined by 6.5% to 69.68 US cents/lb in October 2022. The Colombian Milds-Robustas differential shrank by 13.0% to 158.94 US cents/lb. The strongest differential amongst all groups is the Other Milds-Brazilian Naturals differential, declining only 0.2%, to 47.82 US cents/lb. Lastly, the Other Milds-Robustas differential lost 12.2% from September to October 2022.

The average monthly differential stood at 137.07 US cents/lb, down from 156.13 in September 2022. The arbitrage between the New York and London Futures markets shrank by 15.4%, falling to 99.56 US Cents/lb in October 2022 from 117.74 US cents/lb in September 2022 as the price decline was more marked for Arabica than Robusta, marking a reversal of the previous trend.

Intra-day volatility of the I-CIP decreased 1.2 percentage points between September and October 2022, reaching a low of 7.1%. Robustas and the London futures market presented the lowest volatility amongst all group indicators, at 5.8% and 5.7%, respectively, in October 2022. The Brazilian Naturals volatility was the highest amongst the group indicators, averaging 9.6%, a 1.3 percentage point decrease from the previous month. The variation in volatility of the Colombian Milds and Other Milds for September to October 2022 is -0.6 to 7.4% and -1.0 to 7.6%, respectively. The New York Futures market remained the most volatile, albeit posting a decrease of 1.4 percentage points, averaging 9.8% for the month of October 2022.

The New York certified stocks decreased 9.3% from the previous month, closing in at 0.41 million bags, whilst certified stocks of Robusta coffee reached 1.52 million bags, representing a decrease of 4.3%.

Export by Coffee Groups
Global exports of green beans were down 1.1% in coffee year 2021/22, totalling 116.07 million bags from 117.32 million bags in coffee year 2020/21. This marks the third largest annual exports in volume on record, with the biggest ever exports having been seen in coffee year 2018/19 when 121.32 million bags of green beans were shipped. Fundamentally, the decrease in green bean exports reflects reduced world coffee production, which is estimated to be down 2.1% to 167.17 million bags for coffee year 2021/22, as compared with an estimated 170.83 million bags in coffee year 2020/21.

The performances of the four groupings were varied in coffee year 2021/22, with the Brazilian Naturals and Colombian Milds down and the Other Milds and Robustas up. The exports of the Brazilian Naturals were down by 4.3% to 37.83 million bags in coffee year 2021/22 from 39.54 million bags in coffee year 2020/21. The downturn was driven by Brazil, the biggest producer and exporter of the Brazilian Naturals, with its total green bean exports decreasing by 12.5% in coffee year 2021/22. An estimated smaller crop harvested during its Arabica ‘off season’ and issues with containers and shipping reported earlier in the coffee year are, in turn, the main reasons behind Brazil’s poor performance.

Exports of the Colombian Milds decreased by 7.1% in coffee year 2021/22, falling to 12.14 million bags from 2022 from 13.07 million bags in the previous coffee year. This is the lowest volume of exports since 2015, when total shipments of green beans totalled 12.78 million bags. The main origin contributing to the overall drop for the group can be traced to Colombia, the biggest producer and exporter of the Colombian Milds, with the country’s exports falling to 10.84 million bags, the lowest level since 2014. The fall in Colombia’s exports is linked to unfavourable weather conditions, reducing the available coffee supply in the country, with the total output estimated to be down 13% in coffee year 2021/22 to 11.68 million bags.

Shipments of the Other Milds increased by 1.3% in coffee year 2021/22, rising to 23.9 million bags from 23.59 million bags in the previous coffee year. The small uptick in the exports of the Other Milds was mainly the result of a confluence of struggles between Honduras and Guatemala, the first and third largest exporters of the Other Milds, and Peru and Nicaragua, the second and fourth largest exporters of the Other Milds which both recorded a stellar performance.

In Honduras, the coffee industry has been struggling with leaf-rust that hit the industry’s harvests, while Guatemala has been dealing with impact of a lower production, due primarily to climatic reasons and availability of labour, which lowered the exports by 7.6% and 20.0%, respectively, to 3.41 million bags and 4.7 million bags. For Nicaragua, coffee year 2021/22 has been a record year, as it shipped 2.87 million bags of green beans, the highest level on record, while for Peru total exports of green beans were 4.58 million bags, the second highest on record, just behind the 4.69 million bags shipped in coffee year 2011/12.

Exports of the Robustas totalled 42.2 million bags in coffee year 2021/22, up 2.6% as compared with 41.12 million bags in coffee year 2020/21. Vietnam and India were the two main positive highlights for coffee year 2021/22 for the Robustas, with the respective exports of green beans increasing by 15.1% and 26.1% to 26.78 million bags and 5.01 million bags. Burundi and Uganda were the two main negative highlights, with their respective exports of green beans decreasing by 62.1% and 10.0% to 134,000 bags and 5.85 million bags.

Export by Regions
In October 2021 to September 2022, South America’s exports of all forms of coffee decreased by 7.1% to 55.31 million bags. Brazil is the reason for the drop in exports, with shipments from the country declining by 11.4% to 38.12 million bags. This is the first time since 2017 that Brazil’s annual exports of all forms of coffee have fallen below the 40 million bags mark. As explained earlier in this report, a smaller crop harvested during its Arabica “off-season” and problems with containers and shipping explain the large drop in exports in Brazil.

Exports of all forms of coffee from Asia and Oceania increased by 12.8% to 43.86 million bags in coffee year 2021/22. Vietnam’s exports increased by 14.8% to 28.19 million bags from 24.56 million bags in coffee year 2020/21, which made the region’s biggest producer and exporter also the single largest absolute contributor to Asia & Oceania’s strong gains in exports in coffee year 2021/22. India’s exports of all forms of coffee jumped 21.7% in coffee year 2021/22, rising to 7.24 million bags from 5.95 million bags in coffee year 2020/21. Indonesia, the third largest producer and exporter of the region, saw its exports of all forms of coffee increase marginally to 6.92 million bags in coffee year 2021/22 from 6.82 million bags in the previous coffee year.

Exports of all forms of coffee from Africa decreased by 5.1% to 13.73 million bags in coffee year 2021/22 from 14.48 million bags in the previous coffee year. As explained earlier within this Report, Burundi and Uganda were the two main contributors to the region’s downturn. Uganda’s decrease in exports is explained by the impact of drought in most of the coffee growing regions, which led to a shorter main harvest season in central and eastern parts of Uganda, and hence lower output and exports. Ethiopia, the second largest producer and exporter of the region, saw its exports of all forms of coffee increase marginally to 4.02 million bags in coffee year 2021/22 from 3.98 million bags in the previous coffee year.

In October 2021 to September 2022, exports of all forms of coffee from Mexico and Central America were down 3.3% to 16.09 million bags as compared with 16.63 million in coffee year 2020/21. Honduras was the single largest contributor to the region’s downturn, with the country’s exports of all forms of coffee down 20.0%, a loss of 1.17 million bags versus the volume shipped in coffee year 2020/21. Costa Rica and Guatemala were the next two biggest contributors, with their absolute decreases recorded at 50,576 bags and 280,445 bags, respectively.

Export by Forms of Coffee
Total exports of soluble coffee increased by 6.1% in coffee year 2021/22 to 12.1 million bags from 11.4 million bags in coffee year 2020/21. The share of soluble coffee of the total exports of all forms of coffee was 9.4% for the year, the highest on record. Brazil was the largest exporter of soluble coffee, shipping 3.89 million bags, followed by India with 2.22 million bags, with Indonesia in third place at 1.66 million bags exported in coffee year 2021/22.

Exports of roasted beans increased by 5.0% in coffee year 2021/22 to 0.82 million bags.

Production and Consumption
The estimated 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 in the previous coffee year.

World coffee consumption was 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 was expected to exceed production by 3.1 million bags.

For the full report, visit: ico.org.

The post Coffee prices slip but prices exceed 2021 calendar year average appeared first on Tea & Coffee Trade Journal.

Green Coffee Price
The ICO Composite Indicator Price (I-CIP) lost 0.2% from August to September 2022, averaging 199.63 US cents/lb for the latter, whilst posting a median value of 198.43 US cents/lb. In September 2022, the I-CIP fluctuated in between 193.28 and 206.37 US cents/lb.

Average prices for all groups indicators decreased in September 2022, except for the Robustas, which had an uptick of 1.6% from August to September 2022. The Robustas averaged 111.36 US cents/lb for the month of September. The Colombian Milds and Other Milds, decreased by 0.5% and 0.3% respectively, month-on-month in September. The former averaged 294.09 US cents/lb in September 2022, whilst the latter averaged 267.49 US cents/lb. The upturns are in part due to the average 2nd and 3rd positions of the ICE New York futures market, which lost 0.1% in September 2022 over August 2022. The average of the 2nd and 3rd positions of the ICE (International Coffee Exchange) Futures Europe for the Robustas grew by 1.8%.

The Brazilian Naturals-Robusta differential took the hardest hit from August to September 2022, retracting 3.6% from 112.26 to 108.23 US cents/lb as growth of the Robustas outpaced the Brazilian Naturals. The Colombian Milds-Other Milds differential sustained a 2.3% loss for the aforementioned period, whilst the Colombian Milds-Robustas differential shrank by 1.8%. The Colombian Milds-Brazilian Naturals differential grew by 1% to 74.50 US cents/lb in September 2022. The strongest growth among all the differentials was observed for the Other Milds-Brazilian Naturals differential, gaining 3.0%, ranging 46.52 to 47.90 US cents/lb for their respective monthly averages. Lastly, the Other Milds-Robustas differential lost 1.7% from August to September 2022. The average of the monthly differential stood at 156.13 US cents/lb, down from 158.78 in August 2022.

The arbitrage between the New York and London Futures markets shrunk by 1.7%, falling to 117.74 US Cents/lb in September 2022 from 119.79 US cents/lb in August 2022.

Intra-day volatility of the I-CIP decreased 2.0 percentage points between August and September 2022, reaching a low of 8.3%. Robustas and the London futures market presented the lowest volatility amongst all group indicators, at 7.3% and 7.0% in September 2022. The Brazilian Naturals volatility, was the highest amongst the group indicators, averaging 10.9%, a 2.4 percentage point decrease from the previous month. The variation in volatility of the Colombian Milds and Other Milds for August to September 2022 is -2.0 to 8.0% and -2.8 to 8.6%, respectively. The New York futures market remained the most volatile, albeit posting a decrease of 3.4 percentage points, averaging 11.2% for the month of September 2022.

The New York certified stocks decreased 37.2% from the previous month, closing in at 0.45 million bags, whilst certified stocks of Robusta coffee reached 1.59 million bags, representing a decrease of 0.8%.

Export by Coffee Groups
Global exports of green beans in August 2022 totalled 8.83 million bags, compared with 9.17 million bags in the same month of the previous year, down 3.7%. The downturn was spread across all groups of coffee, with the exception of the Brazilian Naturals, which saw a 7.1% increase in August 2022 as compared with the same month a year ago. The second consecutive month of negative growth has pushed the cumulative total exports of green beans for the first 11 months of coffee year 2021/22 further into red, down 1.0% as compared to 0.7% decrease for the first 10 months of the current coffee year. The cumulative total for 2021/22 to August is 107.05 million bags as compared with 108.13 million bags over the same period a year ago.

Exports of the Colombian Milds decreased by 23.0% to 0.86 million bags in August 2022 from 1.12 million bags in August 2021, driven primarily by Colombia, the main origin of this group of coffee, whose exports of green beans were down 25.6% in August 2022. As a result of the relatively sharp downturn, exports of the Colombian Milds in October 2021–August 2022 were down by 5.7% at 11.32 million bags, as compared with 12.0 million bags in the first 11 months of coffee year 2020/21. Colombia exported 0.79 million bags of green beans in August 2022, the lowest August exports since 0.54 million bags were shipped in 2012.

The Brazilian Naturals bounced back in August with a 7.1% increase, following a 4.6% fall in July 2022, exporting 2.85 million bags as compared with 2.66 million bags in August 2021. The upturn was driven by Brazil, the biggest producer and exporter of the Brazilian Naturals, with its total green bean exports increasing by 4.6% in August 2022 to 2.44 million bags. However, the cumulative total exports of the Brazilian Naturals for coffee year 2021/22 to August 2022 is down 5.8% at 34.52 million bags, as compared with 36.66 million bags.

Shipments of the Other Milds decreased by 3.7% in August 2022 to 1.94 million bags from 2.01 million bags in the same period last year. This is the fifth consecutive months of fall. As a result, the cumulative volume of exports continued to increase but at a declining rate, falling to 1.3% in the first 11 months of coffee year 2021/22 (22.09 million bags vs 21.08 million bags) from 2.7% in the first 10 months of the same coffee year. Guatemala and Honduras were the two main origins responsible for the latest fall in exports of the Other Milds, with their exports of green beans plunging by 27.7% and 41.3%, respectively.

In Honduras, the coffee industry is struggling with leaf-rust, or roya, which has hit the industry’s harvests, with the country’s coffee association lowering the exports outlook for coffee year 2021/22, twice already, from 5.823 million bags to 4.61 million bags. Guatemala is also dealing with impact of a lower production, due mainly to climatic reasons and availability of labour, that is having a knock-on effect on the country’s exports.

Exports of the Robustas totalled 3.17 million bags in August 2022, as compared with 3.38 million bags in August 2021, down 6.0%. Exports of green beans for the first 11 months of the current and previous coffee years for the Robustas were 42.57 million bags and 41.22 million bags, respectively, up 3.8%. Ethiopia and India are the two main origins behind the latest downturn, suffering from 16.0% and 13.1% decreases, respectively, in August 2022, with their total green bean exports at 0.43 million bags and 0.37 million bags, respectively. India, especially, has had a good year so far, with the total exports of green beans for the first 11 months of coffee year 2021/22 increasing by 31.1% to 4.62 million bags as compared to 3.53 million bags, an increase of 1.1 million bags. As a result, the production/export ratio is falling sharply, down from 1.48 in coffee year 2020/21 to 1.12 in coffee year 2021/22. The ratio is a good indication of supply availability. Therefore, it is possible that the sharp fall in India’s August 2022 exports is a reflection of the supply availability towards the end of a stellar year.

Total exports of soluble coffee increased by 13.2% in August 2022 to 0.98 million bags from 0.87 million bags in August 2021. In the first 11 months of coffee year 2021/22, a total of 11.06 million bags of soluble coffee were exported, representing an increase of 6.3% from the 10.4 million bags exported in the same period during the previous coffee year. The share of soluble coffee of the total exports of all forms of coffee was 9.3% (measured on a moving 12- month average) in August 2022. Brazil is the largest exporter of soluble coffee, shipping 3.58 million bags in the first 11 months of coffee year 2021/22, followed by India with 2.0 million bags, with Indonesia in third place at 1.53 million bags exported over the same period.

Exports of roasted beans increased by 59.9% in August 2022 to 89,548 bags from 55,995 bags in August 2021. The cumulative total for coffee year 2021/22 to August 2022 was 0.75 million bags, as compared with 0.72 million bags in same period a year ago.

Regional Outlook
In October 2021 to August 2022, South America’s exports of all forms of coffee decreased by 23.3% to 50.46 million bags. Brazil and Colombia are the reasons for this large drop in exports. During this period, shipments from Brazil declined by 27.2% to 34.74 million bags from 47.4 million bags in October-August 2020/21. The volume of exports from Colombia is down 18.7% in the first 11 months of coffee year 2021/22 at 11.17 million bags, from 13.74 million bags in the same period a year ago. A smaller crop harvested during its Arabica ‘off-season’, along with problems with containers and shipping, mainly noted during the middle of the current coffee year, explains the large drop in exports of all forms of coffee in Brazil, while the fall in the exports of Colombia is linked to persistent unfavourable weather conditions reducing the available supply of coffee in the country. Nevertheless, Peru is enjoying a good year, with exports of all forms of coffee expanding by 6.1% in the first 11 months of coffee year 2021/22 to 4.05 million bags from 3.82 million bags in the same period a year ago.

Exports of all forms of coffee from Asia & Oceania increased by 2.7% to 3.25 million bags in August 2022 but were down 1.5% to 40.86 million bags in the first 11 months of coffee year 2021/22. Indonesia was the origin behind the uptick for August, with its exports growing by 20.1% to 0.65 million bags from 0.54 million bags in August 2021. However, the country is also the main reason behind the negative cumulative growth of the region for the season so far: exports of all forms of coffee are down 17.8% to 6.24 million bags in the first 11 months of coffee year 2021/22 as compared with 7.59 million bags in the same period a year ago. Vietnam, the region’s biggest producer and export, made a margin gain in August, with the origin’s exports increasing by 0.1% to 1.89 million bags, bringing the year’s total (October 2021 to August 2022) to 26.6 million bags, up 1.8% year-on-year. India’s shipments were down 6.0% in August 2022 to 0.57 million bags, however the total for the first 11 months remains up at 8.5%, 6.64 million bags versus 6.12 million bags in the first 11 months of coffee year 2021/22.

Exports of all forms of coffee from Africa decreased by 11.9% to 1.24 million bags in August 2022 from 1.4 million bags in August 2021. For the first 11 months of the current coffee year, exports totalled 12.48 million bags as compared with 15.44 million bags in coffee year 2020/21. Uganda is the main source of the downturn for the region in August, with its exports falling by 28.5% to 0.5 million bags as compared to 0.7 million bags in August 2021. The cumulative total for coffee year 2021/22 to August 2022 is also down, decreasing by 23.0% to 5.35 million bags from 6.94 million bags in the same period a year ago. The decrease in exports was mainly due to the impact of drought in most of the coffee growing regions, which led to a lower and shorter main harvest season in central and eastern parts of Uganda, and hence lower output.

In August 2022, exports of all forms of coffee from Mexico & Central America were down 7.4% to 1.19 million bags as compared with 1.29 million in August 2021. For the first 11 months of the current coffee year, exports are down 13.0%, totalling 15.07 million bags as compared with 17.34 million bags in October–August 2020/21. The region’s sharp downturn in August was due Guatemala and Honduras, down 27.8% and 41.3%, respectively. For the first 11 months of coffee year 2021/22, the total exports are 3.16 million bags and 4.53 million bags, for the two origins, respectively, down 15.6% and 24.0%. The reason for the poor performance of the two origins has already been explained in the “Exports by Coffee Groups” section above.

Production and Consumption
The 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 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 expected to exceed production by 3.1 million bags.

For the full report, visit: ico.org.

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Tea and coffee have been competing for throat-share in the West for many decades and consumption patterns continue to shift. Markets are becoming more global, new generations opt for wider choices, diversification has become key to growth and social and economic sustainability are today an intrinsic part of the list of goals. There is a desire for specialty teas to move towards a more unified platform, but the path to do so is a challenging one.

In the late 1980s, tea was the leading caffeinated hot brew in the United Kingdom, the Netherlands and Russia, whilst coffee was the king of the morning in North America and the rest of Europe. The multinational brands were dominating with mostly blended black teas in tea bags, and the premium segment comprised the spring leaves harvested from a few world-famous origin areas, located mainly in India and Sri Lanka. When China came back to the market in 1982, with Deng Xiao Ping restoring private ownership and encouraging foreign trade, the market was shaken up with a wealth of new cups arriving in the West, all unknown and unheard of. These countless varieties of specialty teas, coming in different colours and many different shapes and grades generated a keen need for learning more about them to assess these cups and to understand their high prices.

Importing, trading, retailing & brewing premium cups

In the wake of China’s opening access to its ‘ten thousand teas’, the big issues were how to provide product knowledge for the suppliers/retailers on one side and for the consumers on the other side, how to ensure accurate information and how to manage authenticity concerning origin, process, botanical cultivar, and harvesting period etc.

Green teas were the first to puzzle the Western palates, followed by white teas, oolong and puer teas. All these cups were new and exciting with striking leaves to brew them. After generations of tea buyers, tasters and blenders having been trained in-house by the traditional tea majors and family companies the new specialty teas brought along a fully new challenge.

The big question of how and where to find complete and accurate product knowledge became a key issue in the late 1990s, with many operators doing their own sourcing travels to origin to learn about the product on the spot. Several highly renowned companies were founded during this period by passionate tea explorers and tea travellers, such as the French companies Mariage Frères, Palais des Thés, Jardins de Gaïa, and Cha Yuan; the Canadian company Camellia Sinensis; the British Fine Tea Merchants and Postcard Tea; and the Americans Seven Cups and Rishi Tea, to name a few. These well-known and fully acknowledged tea pioneers have paved the way for many more new operators, attracted by the novelty of this fascinating, exotic and high added value niche market.

Education, teaching and training

To profitably market the new cups, the urgent need for education occurred rapidly and was picked up in various forms according to national market patterns. It was in North America that the first nationwide initiatives were taken to provide accurate knowledge about these new specialty teas to the tea professionals. The Tea Association of the USA founded the Specialty Tea Institute (STI) in 2001, and the Tea & Herbal Association of Canada (THAC) launched the Tea Sommelier Certification Programme in 2006. These educational structures, vetted by the two countries’ domestic tea industry, provide fully endorsed curricula, thus ensuring that the tea professionals will acquire in depth knowledge about specialty teas.

Image: Newby Teas

Peter Goggi, president of the Tea Association of the USA, underlined the importance of the statutory tea associations, which can offer nationwide legitimation and endorsement, which is a significant competitive advantage compared to other self-proclaimed tea schools and tea training educators. STI offers certified education, which leads to graduation, giving tea professionals the status of accreditation by the Tea Association of the USA. THAC’s Tea Sommelier Certification Programme applies similar rules and offers a wide range of educational courses with certifying exams, open to tea professionals and to tea lovers.

In Europe, the tea-sourcing pioneers and specialty tea company founders acquired their tea knowledge on the ground, a learning which is not easy to access by many, hence the need to provide teaching and training to all the other tea professionals at home to prevent mis-and dis-information, and to introduce all the new cups in an attractive and fully competent way. With the national Tea Industry Federations being run by the tea majors, there was no interest to invest in specialty tea education in the early times. Therefore, the private sector followed up and the first tea school in Europe was launched by Palais des Thés in Paris, France in 1999, with the teaching open to all, however without any exams, certification or graduation. Since that time most of the French specialty tea companies have launched their own tea training lectures and tasting sessions and many tea drinkers flock there happily, to learn more about these delicious cups.

With the same objective to introduce tea training and tea education for tea professionals and to open the tea drinkers’ minds to the new and enlarged universe of the ten thousand cups (from China), renowned tea pioneer and tea author, Jane Pettigrew, launched the UK Tea Academy in London (UKTA) in 2016. In Italy, the tea expert, Gabriella Lombardi established the ProTea Academy in Milan in 2016, offering tea education and tea training to tea professionals as well as to tea lovers.

There are company tea courses and private tea schools also in Spain, Denmark, Czech Republic, and Poland, etc., all with the aim to allow the customers to learn more about the many fine cups on the market to foster consumption.

It is important to note that very sophisticated training and education is also sometimes made available by origin country operators, which have established their tea houses in the West, such as Thés de Chine in Paris, and others who come from Taiwan, Japan and Korea, where tea is not only a fragrant cup but intimately linked to ancient cultural traditions.

With the desire to share their own professional experience with tea lovers to foster an in-depth knowledge of these fine cups, many valuable tea books have been authored by well-known tea pioneers since the early years of the new millennium, a further useful tool for spreading tea knowledge in Europe and North America.

Exploring new cups from the Far East

In the early years of the new millennium, black tea producers in Darjeeling, Malawi, Rwanda, and Sri Lanka, etc., became so fascinated with China’s silver needles that they launched their own white teas to display their abilities and skills. White teas were arriving from many new origins at that time, always beautiful, whilst not always brewing to expectation. Responding to a need for ‘good order with basic processing steps properly defined,’ an ISO-tea technical report, ISO/TR 12591 White Tea Definitions, was published in December 2013, after several years of discussions, which defined and enshrined terms and definitions for these beautiful teas. Finally, the white tea-frenzy calmed down as production costs were huge for the untraditional white teas, and today, most of them come from China as before.

Spring harvest from Sikkim Temi Tea

With highly proactive promotion by Japanese major Ito En, matcha was introduced to North America over the last few years, and it has created a true craze for premium green tea powder in the USA and is now gradually gaining ground in Europe too. As some producers in Korea and China were keen to join the matcha-boom, there arose again a need for having some agreed basic rules for the sake of ‘good order’, hence the ISO sub-committee on tea convened a Matcha Tea working group in 2018 and a technical report, which lays down basic rules and requirements, published as ISO/TR 21380:2022 Matcha Tea in April 2022.

There is no end to this yet, since one also finds today puer tea made in Malawi and Laos and elsewhere and Oolong tea from India and Indonesia, therefore two new working groups have been organised by ISO-Tea to continue drafting basic definitions and terms to complete the framework of ISO standards for the new tea categories.

The international level

In 2013, Ramaz Chanturiya, CEO of the Russia Tea & Coffee Federation launched the Tea Masters Cup with the focus on promoting specialty teas with the end consumers through highly educated and knowledgeable tea professionals in the Russian tea market. Highly successful domestically, he then introduced this benchmarking scheme on an international level, embedded in a high-profile event, Tea Masters Cup International (TMCI), in 2015. Up to the Covid disruption, there have been four TMCI competitions in Turkey, Korea, China and Vietnam.

In 2015, the first Teas of the World contest was run by AVPA, a not-for-profit agency, based in Paris, France, with the purpose of promoting terroir food products, such as edible oils, coffee, chocolate and tea. The concept targets the promotion of fine teas, submitted by the producing companies at origin, for a quality assessment carried out by professional tea tasters and tea experts, and awarded with medals for commercial purpose, attracting the media, Western retailers and customers. The fifth contest took place in July 2022 and the number of samples submitted has increased hugely since inception.

Premium sencha cups from different cultivars

In 2018, the European Specialty Tea Association (ESTA), was launched in the UK, with the purpose to create a European-wide platform for the promotion of specialty teas. The plan follows the lines of the Specialty Coffee Association of Europe (SCAE), founded in 1998, and unified within SCA in 2017, with a structure of national chapters and accredited tea Certifiers who train, educate and assess.

Outlook for the post-Covid times

With the unending stress generated by the sanitary crisis, tea is becoming the sought-after soothing, relaxing and restoring cup, attracting many new consumers. However, the premium and specialty teas continue to require educated retailers and tea professionals, hence the need to maintain the ongoing efforts for more training, authentic and qualified storytelling and improved competence for brewing practices.

Despite many attempts, there is not yet any fully agreed definition nor an approved set of criteria required for a tea to belong to the category specialty tea, although origin, cultivar, harvesting period, and manufacturing process are most likely to figure somewhere on the list. The market share of specialty teas varies greatly throughout the Western consumer countries, which impacts the degree of consumer awareness and the growth potential. It may well take some more years of training, educating and promoting before reaching comparable market patterns to build a federating platform on European level with the support of the national federations for tea and herbal infusions.

• Barbara Dufrêne is the former Secretary General of the European Tea Committee and editor of La Nouvelle du Thé. She may be reached at: b-dufrêne@orange.fr.

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Average prices for all groups’ indicators increased in August 2022. Robustas gained the most, expanding 9.2% from July to August 2022, raising to an average of 109.65 US cents/lb for the month. The Colombian Milds and Other Milds, increased by 3.4% and 4.9% respectively, month-on-month in August. The former averaged 295.66 US cents/lb in August 2022, whilst the latter averaged 268.43 US cents/lb. The upturns are in part due to the average second and third positions of the ICE New York futures market, which gained by 3.7% in August 2022 over July 2022. The average of the 2nd and 3rd positions of the ICE Futures Europe for Robustas grew substantially by 10.2%.

The Colombian Milds Other Milds differential took the hardest hit from July to August 2022, retracting 9.7% from 30.16 to 27.23 US cents/lb as growth of the Other Milds outpaced the Colombian Milds. Strong Other Milds growth can also be evaluated in the Other Milds Robustas differential as it gained 13.2%, up from 41.10 to 46.52 US cents/lb. The Colombian Milds Brazilian Naturals continued its upwards trajectory of the past year, as the differential increased by 3.5% from 71.27 to 73.75 US cents/lb from July to August 2022. Despite the Robustas indicator price presenting strong growth, the Colombian Milds Robustas differential gained 0.2%, ranging from 185.63 to 186.01 US cents/lb for the aforementioned period.

Echoing strong growth of the Robustas group indicator, the Other Milds Robustas differential increased by 2.1% reaching 158.78 US cents/lb in August 2022 from 155.46 US cents/lb in the previous month. The Robustas group indicator did however manage to close the differential with the Brazilian Naturals by 1.8%, where it retracted from 114.36 to 112.36 US cents/lb from July to August 2022. The arbitrage between New York and London Futures markets shrunk by 1.2%, falling to 119.79 US Cents/lb in August 2022 from 121.24 US cents/lb in July 2022.

Intra-day volatility of the I-CIP increased 0.2 percentage points between July and August 2022, reaching 10.3%. Robustas and the London futures market presented the lowest volatility amongst all group indicators, at 6.6% and 7.1% in August 2022. The Brazilian Naturals volatility, was the highest amongst the group indicators, averaging 13.3%, a 1.0 percentage point increase from the previous month. The variation in volatility of the Colombian Milds and Other Milds for July to August 2022 is 0.4 to 10.0% and 0.6 to 11.4%, respectively, and there was significant volatility of the New York futures market, posting an increase of 1.1 percentage points, averaging 14.6% for the month of August 2022.

The New York certified stocks decreased 6.5% from the previous month, closing in at 0.72 million bags, the lowest in over 20 years, whilst certified stocks of Robusta coffee reached 1.61 million bags, representing a decrease of 10.9%.

Global exports of green beans in July 2022 totalled 9.04 million bags, compared with 9.91 million bags in the same month of the previous year, down 8.8%. The slump was spread across all four groups of coffee, with the Colombian Milds recording the biggest drop, falling by 12.5% year-on-year. The double-digit decrease in July pushed the cumulative total exports of green beans for coffee year 2021/22 into red, down 0.8% as compared to 0.1% increase for the first nine months of the current coffee year. The cumulative total for 2021/22 to July is 98.08 million bags as compared with 98.97 million bags over the same period a year ago. Exports of the Colombian Milds decreased by 12.5% to 1.02 million bags in July 2022 from 1.17 million bags in July 2021, driven primarily by Colombia, the main origin of this group of coffee, whose exports of green beans were down 15.7% in July 2022. As a result of the relatively sharp downturn, exports of the Colombian Milds in October 2021–July 2022 were down by 3.7% at 10.48 million bags, as compared with 10.88 million bags in the first 10 months of coffee year 2020/21. Colombia exported 0.929 million bags of green beans in July 2022, the lowest since 0.928 million bags were shipped in July 2017.

In the previous two ICO reports, the monthly movements of exports from Colombia, up an average 108.9% in May–June 2022, were explained as being technical, reflecting the dramatic changes of the previous year, down an average 43.3% over May–June 2021. However, for July 2022, the sharp fall in exports is linked to the sharper drop in production, which had fallen by 22% in the same month.

The recovery of the Brazilian Naturals, first seen in May and continuing into June, was broken in July, with exports falling by 6.7% at 2.57 million bags as compared with 2.75 million bags in July 2021. This reversal of fortune was driven by Brazil, the biggest producer and exporter of the Brazilian Naturals, with logistical bottlenecks and harvesting delays impacting July exports. For the first 10 months of coffee year 2021/22, exports of the Brazilian Naturals stood at 31.68 million bags, down 6.8% from 34.0 million bags over the same period a year ago. Shipments of the Other Milds decreased by 9.9% in July to 2.23 million bags from 2.47 million bags in the same period last year. As a result, the cumulative volume of exports continued to increase but at a declining rate, falling to 0.9% in the first 10 months of coffee year 2021/22 (19.99 million bags vs 19.8 million bags) from 2.5% in the first nine months of the same coffee year. Exports of Robustas totalled 3.23 million bags in July 2022, as compared with 3.52 million bags in July 2021, down 8.4%. Exports of green beans for the first 10 months of the current and previous coffee years for Robustas were 35.95 million bags and 34.29 million bags, respectively, up 4.8%.

Total exports of soluble coffee increased by 18.5% in July 2022 to 1.01 million bags from 0.85 million bags in July 2021. In the first 10 months of coffee year 2021/22, a total of 10.04 million bags of soluble coffee were exported, representing an increase of 4.3% from the 9.53 million bags exported in the same period during the previous coffee year. The share of soluble coffee of the total exports of all forms of coffee was 9.2% (measured on a moving 12- month average) in July 2022. Brazil is the largest exporter of soluble coffee, shipping 3.26 million bags in the first 10 months of coffee year 2021/22, followed by India with 2.0 million bags, with Indonesia in third place at 1.48 million bags exported over the same period. Exports of roasted beans increased by 3.4% in July 2022 to 67,101 bags from 64,290 bags in July 2021.

In October 2021 to July 2022, South America’s exports of all forms of coffee decreased by 8.5% to 42.24 million bags. During this period, shipments from Brazil declined by 12.4% to 31.98 million bags from 37.22 million bags in October-July 2020/21. The volume of exports from Colombia is down 13.2% in the first 10 months of coffee year 2021/22 at 10.28 million bags, from 10.59 million bags in the same period a year ago. The fall in the exports is linked to persistent unfavourable weather conditions reducing the available supply of coffee in the country.

Exports of all forms of coffee from Asia & Oceania increased by 4.0% to 3.19 million bags in July 2022, and by 16.0% to 37.6 million bags in the first 10 months of coffee year 2021/22. During these periods, Vietnam’s exports decreased by 1.9% to 1.95 million bags, but were still up 17.9% to 24.71 million bags, respectively. India’s shipments were up 10.8% to 0.53 million bags in July 2022, and up 28.9% to 6.07 million bags in the first 10 months of coffee year 2021/22. Exports from Indonesia increased by 31.6% to 0.58 million bags in July 2022 and were up 0.2% to 5.59 million bags in October–July 2021/22.

Exports of all forms of coffee from Africa decreased by 13.1% to 1.41 million bags in July 2022 from 1.62 million bags in July 2021. For the first 10 months of the current coffee year, exports totalled 11.36 million bags as compared with 11.83 million bags in coffee year 2020/21. Exports from Tanzania were down 66.6% in July and by 4.9% in the first 10 months of coffee year 2021/22, at 11,754 bags and 0.84 million bags, respectively. Over the same periods, exports from Ethiopia decreased by 23.5% to 0.5 million bags, but increased 6.4% to 3.25 million, respectively.

In July 2022, exports of all forms of coffee from Mexico & Central America were down 16.2% to 1.54 million bags as compared with 1.83 million in July 2021. For the first 10 months of the current coffee year, exports are down 5.6%, totalling 13.61 million bags as compared with 14.42 million bags in October–July 2020/21. The region’s sharp downturn in July, just as it was for June 2022, was due to the 41.1% fall in exports from Honduras, the largest exporter of the region, shipping 0.39 million bags in July 2022 as compared with 0.66 million bags in July 2021.

For the first 10 months of coffee year 2021/22, Honduras has exported 4.28 million bags, down 17.9% from 5.22 million bags in the same period in coffee year 2020/21. Less rainfall during the bean-filling period in some growing regions, a high incidence of rust disease as a result of hurricanes Eta and Iota, and stumping following an earlier outbreak of rust disease, which led renewal in 2012 that reached peak production between the 2018/2020 harvests, all affected the country’s supply of coffee and continue to negatively affect exports from Honduras.

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 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 expected to exceed production by 3.1 million bags.

For the full ICO report, visit: ico.org.

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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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