General Market News
During this weekend the coffee community gathered in Chicago for the Specialty Coffee Expo held by the Specialty Coffee Association. Our US team also took part in the tradeshow, which was a great opportunity to meet new and old friends, taste amazing coffee together, and explore the latest innovations shaping the industry.
The 2024 World Brewers Cup and World Cup Tasters Championship were also held during the event. Big congratulations to Martin Wölfl, representing Austria, for clinching first place in the Brewers Cup, and to Aurore Ceretta, who represented Germany in the Cup Tasters Championship and secured second place. Hats off for their outstanding achievements!
While all this happened in Chicago - the futures market recorded a week of new highs for Robusta and strong gains for Arabica. International Arabica prices in New York closed the week at 224.65 c/lb (KCK24) last Friday, while London reached new all-time highs, hitting 3,956 USD/MT and closing the week at 3,900 USD/MT (RMK24).
With Proexo's team at Specialty Coffee Expo in Chicago
Indonesia
In February, general elections were held in Indonesia. The country's General Elections Commission (KPU) officially declared Prabowo Subianto as the winner with 50.8% of the votes. He is scheduled to be inaugurated as president on October 20th.
On a festive note, Indonesia, home to one of the largest Muslim populations worldwide, celebrated the end of Ramadan last week with the three-day festival known as Eid al-Fitr, which translates to "the feast of breaking the fast." During the holiday, families and friends come together to celebrate with food, drink, and prayer.
Weatherwise things have been varied. While Sumatra has seen dry and sunny days, southern areas have encountered heavy rains and strong winds due to a tropical storm. Sulawesi is experiencing cooler temperatures of around 23°C, with forecasts indicating some rainfall.
The Arabica harvest in Sumatra is experiencing a delay. Typically, cherry collection is in its final stage by this time, but currently, good quantities of cherry are still being collected. In Sulawesi, Bali, and Java, the main Arabica harvest is expected to commence in the next couple of weeks, with the Robusta harvest following shortly after. In the meantime, farmers are preparing for the upcoming crop.
Demand for Arabica has been a bit soft and local prices seem to remain steady. In contrast, Robusta is flowing consistently, and farmers are keen to sell due to the high prices. As for local demand—since internal consumption has increased significantly, Indonesia continues to import coffee from Brazil to meet the demand within the domestic market.
No significant updates from the port of Lampung; logistics are operating without disruptions.
India
India also participated in the celebrations of Eid al-Fitr along with Indonesia. Muslims across the country celebrated the holiday by offering prayers at mosques.
Karnataka continues to have dry and sunny days while Kerala has high temperatures but also some rainfall.
India's Arabica and Robusta harvesting seasons concluded in January and March, respectively. In recent weeks, farmers have been holding onto their coffee and only a few are releasing some coffee to the market. Local prices have reached an all-time high. Particularly for Robusta, demand in India has been exceptionally strong, as other origins are not offering it. Despite the high prices, differentials are on an upward trend and continue to rise.
Given the slow movement of coffee, shipments are delayed as exporters struggle to get the necessary quantities to meet their obligations. There are no significant updates from the ports of New Mangalore or Cochin.
Vietnam
Vietnam's president, Vo Van Thuong, resigned at the end of March, marking the shortest term in office, having served only one year. Preceding him, Nguyen Xuan Phuc resigned last year after a two-year tenure. Both leaders were tainted by allegations of corruption during their time in office.
Weather-wise, temperatures continue to be high. The Central Highlands have experienced prolonged heat as it enters the peak of its dry season. The absence of rainfall, drought, and water scarcity in 2024 not only disrupt people's daily routines but also impact coffee plantations, as farmers struggle to irrigate their farms. In Đắk Hà district, water supplies are dwindling, and some coffee fields are filled with yellowing leaves.
Due to the ongoing dry conditions, the future harvest yields may suffer. Moreover, Vietnam's Coffee Association forecasts a potential 20% decrease in 2023/24 exports.
The local market is tight, with farmers and traders showing reluctance to sell. While some coffee is moving, it's insufficient to meet short-term demand. The heatwave in Vietnam is further influencing prices, particularly for Robusta, which have surged. Soluble coffee companies are transitioning to importing Brazil Conilons due to escalating local prices.
Besides the ongoing challenges posed by the Red Sea crisis, there are no significant updates from the port.
Papua New Guinea
Today, Papua New Guinea was hit by a powerful earthquake with a magnitude of 6.5. Authorities stated that the epicenter was located 110 kilometers southeast of Kimbe, in the provincial capital of West New Britain, and happened around 7am local time. Fortunately, there have been no immediate reports of damage or injuries.
Both the Eastern and Central Highlands have experienced heavy rainfall. This has caused some logistical issues as there have been landslides and some roads have become too muddy, making transit more challenging.
Farmers are preparing for the harvest, which is about to start. Quality and volume expectations are good, so parchment will soon start to flow. We are looking forward to receiving the first samples of the new crop soon!