Category: News

In the latest update from the International Coffee Organization (ICO), the March 2024 Coffee Market Report unveils a significant upward trend in coffee prices, marking the sixth consecutive month of ascent. Here’s a detailed breakdown of the key highlights:

ICO Composite Indicator Price (I-CIP)
The ICO Composite Indicator Price (I-CIP) averaged 186.36 US cents/lb in March, representing a notable 2.4% increase from February 2024. This surge brought the I-CIP to an 18-month high, reflecting a robust market sentiment.

Robustas Lead the Charge
Remarkably, robusta coffee prices surged to their highest level since October 1994, with an average of 169.43 US cents/lb. This surge underscores the growing demand for robusta beans, reflecting shifts in consumer preferences and market dynamics.

Regional Variations
While Colombian Milds witnessed a modest 0.4% increase, Other Milds remained stable in March 2024. However, the differentials between Colombian Milds, Other Milds, and Brazilian Naturals have fluctuated, signaling complex dynamics within the coffee market.

Arbitrage and Volatility
Arbitrage, measured between the London and New York Futures markets, experienced a notable retraction of 16.0% to 36.06 US cents/lb in March 2024. Additionally, intra-day volatility of the I-CIP increased marginally by 0.3 percentage points to 7.1%, reflecting the market’s responsiveness to changing conditions.

Global Green Bean Exports
February 2024 witnessed a significant uptick in global green bean exports, totaling 10.43 million bags, marking a 9.5% increase compared to the same period last year. Notably, Brazilian Naturals saw a remarkable 36.6% increase, while Colombian Milds and Other Milds also experienced growth.

Regional Export Trends
South America emerged as a key player in global coffee exports, with a notable 41.7% increase in shipments, primarily driven by Brazil. In contrast, exports from Asia & Oceania declined by 17.0%, largely influenced by decreased exports from Vietnam.

Shifts in Export Dynamics
While Robusta exports saw a slight decline, particularly from Vietnam and Indonesia, Colombian Milds and Brazilian Naturals experienced growth in February 2024. This highlights the evolving export dynamics and the varying performance of different coffee varieties.

Implications for Soluble Coffee Exports
Total exports of soluble coffee experienced a decline of 18.2% in February 2024, reflecting shifting consumption patterns and market demand. However, Brazil maintained its position as the largest exporter of soluble coffee, accounting for a significant portion of global exports.

Certified Stocks and Market Stability
Certified stocks on the New York and London futures markets fluctuated, with notable changes observed over recent months. These stocks play a crucial role in maintaining market stability and ensuring the smooth functioning of futures trading.

Supply-Demand Balance
Despite fluctuations in production and consumption, the coffee market maintains a delicate balance, with supply and demand dynamics influencing price movements. Understanding these dynamics is essential for stakeholders across the coffee value chain.

The March 2024 Coffee Market Report provides valuable insights into the evolving landscape of the global coffee industry, offering stakeholders key information to navigate market trends and make informed decisions. As coffee prices continue to rise, attention turns to factors such as climate variability, supply chain resilience, and consumer preferences, shaping the future trajectory of the coffee market. Stay tuned for further updates as the industry adapts to emerging challenges and opportunities.

The Coffee and Climate Initiative announced the participation of the leading Austrian company “Julius Meinl” in the coffee sector in the Coffee and Climate Initiative officially. It emphasized that this new collaboration represents an important step in the ongoing efforts of the initiative to address the challenges faced by small coffee farming families due to climate change. The initiative stated that “Julius Meinl’s” joining as a key player in the private sector adds significant value to our alliance. It is worth mentioning that “Julius Meinl” was founded in 1862 and is one of the oldest coffee roasters in the world and a well-known brand in the world of coffee in Vienna. Quality dedication has been a family hallmark for five generations. The company recognizes the necessity to address climate change in the coffee sector. Therefore, Julius Meinl’s commitment aligns with the initiative’s goal for this year: implementing effective climate change responses, enhancing resilience, and ultimately improving the livelihoods of small coffee farming families. The initiative added: “Our shared vision includes spreading Viennese coffee culture globally while pricing for a more sustainable and fair future, from farmers to consumers. This includes implementing programs to reduce greenhouse gas emissions, circular economy initiatives, and engaging in dedicated activities with farmers and local communities in the origin regions. The Generations program in Colombia and Uganda, aimed at promoting best practices and ensuring sustainable livelihoods, is a testament to this commitment. The ultimate goal is to empower farmers to pass on their knowledge and coffee farming practices ethically to future generations. Given the significant threat posed by climate change, close collaboration is deemed necessary to enhance climate-responsive coffee livelihoods and promote healthy coffee landscapes. It is expected that “Julius Meinl,” as part of the Coffee and Climate Initiative, will play a crucial role in this joint effort.

Current c&c Members and Partners:

• Delta Cafés
• Franck
• J. M. Smucker
• Joh. Johannson Kaffe
• Julius Meinl
• Lavazza Group
• Löfbergs
• Neumann Kaffee Gruppe
• Paulig Coffee
• Tchibo
• Tim Hortons
• Walter Matter
• Sida as public partner
• Hanns R. Neumann Stiftung as implementing partner

The Specialty Coffee Association (SCA) has announced the winners of the 2024 Sustainability Awards, recognizing outstanding contributions to sustainability within the coffee industry.

In an official statement, the association mentioned that “Root Capital,” a non-profit organization, and “Sancoffee,” a for-profit company, have been honored for their exemplary efforts in promoting sustainability.

The 2024 Sustainability Awards celebrate both for-profit and non-profit entities that showcase innovation, collaboration, and positive impact across the entire coffee value chain.

The winners have demonstrated a commitment to addressing challenges such as climate change and gender inequality, while also fostering collaboration across diverse geographies, cultures, and roles within the coffee sector.

After a thorough review by a committee comprised of SCA staff and previous winners of the Sustainability Award, the winners were selected from among the nominees announced last March.

The winners will be formally honored at the Specialty Coffee Expo in Chicago from April 12 to 14 and at the World of Coffee event in Copenhagen from June 27 to 29.

Brazil’s Cooxupe, the country’s No. 1 coffee exporter and the world’s largest coffee growers co-op, reported on Wednesday a large fall in 2023 shipments due to low prices and logistics bottlenecks.

Cooxupe said in its annual report that it had shipped 4.5 million 60-kg bags of arabica coffee in 2023 versus 6.8 million bags in 2022.

Total revenues fell to 6.4 billion reais ($1.28 billion) from 10.1 billion reais in 2022. It said that associated farmers decided to hold on to their coffee and not sell much during several months of last year when arabica coffee prices fell to around 700 reais ($140.22) per bag.

Some foreign clients also asked the co-op to postpone shipments due to high freight costs and tight container availability, co-op president Carlos Augusto Rodrigues de Melo told reporters in an earnings call.

The situation changed this year as arabica coffee prices recovered and rose to around 1,000 reais, Melo said, leading farmers to be much more active in sales. The co-op estimates that farmers sold around 1 million bags in the last 60 days, as they also seek to finance coming fieldwork costs as harvest approaches.

Melo said Cooxupe, which currently only works with arabica coffee, would not rule out starting operations with robusta coffee as production of that type of coffee rises at a fast pace in Brazil.

“The spike in robusta prices is helping to improve arabica prices, something that never happened before,” he said. ($1 = 4.9921 reais)

On Wednesday, Arabica coffee (KCK24) saw a notable increase, closing up +2.60 (+1.38%), while May ICE Robusta coffee (RMK24) also experienced a rise, closing up +94 (+2.71%).

The upward momentum in coffee prices was evident as Arabica reached a 2-1/2 week high, and Robusta hit an all-time high in nearest futures. This surge in Robusta prices followed a concerning announcement from the Vietnam Coffee Association, which stated on Tuesday that Vietnam’s coffee exports for 2023/24 could decline by -20% year-on-year to 1.336 MMT due to dry weather adversely affecting coffee yields and production. The robust performance of Robusta prices on Wednesday provided additional support to Arabica coffee.

Vietnam, being the largest producer of Robusta coffee beans globally, faces tight supplies, contributing significantly to the bullish sentiment in prices. Recent data from Vietnam’s General Statistics Office indicated a significant decrease in February coffee exports, down by -32.8% month-on-month and -20.1% year-on-year to 160,584 MT. However, total exports for January and February combined rose by +16.2% year-on-year to 398,000 MT. Additionally, Vietnam’s agriculture department projected a further decline in coffee production for the 2023/24 crop year, foreseeing a drop of -20% to 1.472 MMT, marking the smallest crop in four years due to drought conditions. Marex Group Plc also forecasted a global Robusta coffee deficit of -2.7 million bags for the 2024/25 period, driven by reduced output in Vietnam.

Conversely, above-average rainfall in Brazil has alleviated concerns of dryness, which could have negatively impacted coffee production. Brazil’s Minas Gerais region received significant rainfall, reaching 106% of the historical average, easing concerns over coffee crop conditions. Brazil’s robust coffee exports in January surged by +45% year-on-year to 3.7 million bags, contributing to global market dynamics.

Looking ahead, the International Coffee Organization (ICO) reported an increase in global coffee exports, indicating a positive trend in market demand. However, factors such as the El Nino weather event, which may bring drought to Vietnam’s coffee-growing regions, and projections of a surplus in coffee production present both bullish and bearish outlooks for the market.

In summary, the recent surge in Arabica and Robusta coffee prices reflects a complex interplay of supply concerns, weather patterns, and market dynamics, shaping the trajectory of the coffee market in the near term.