Welcome to our weekly round-up on the happenings in coffee from around the globe.
Coffee Prices Continue to Surge
Arabica prices continued to climb, with the March (KCH23) contract settling at a 5.5% gain for the week overnight in New York. Prices peaked at 3-month high of 184 USC/lb on Wednesday, New York time, before selling triggered a fall to close at 176 USC/lbs. The market recovered slightly to close at just under 178 USC/lb on Thursday night in New York. Robusta prices climbed 11% across the course of the week to close at 2,049 USD/kg, Thursday night in London.
Strength in the Brazilian Real is continuing to support higher prices as producers are less inclined to sell coffee for export as prices remain strong internally in Brazil. Smaller global supplies are also prompting a bullish run in the market, with the ICO reporting that October-December global exports fell 2.8% year-on-year and Brazil’s Cecafe reporting that 2022 exports from the country were the lowest in 4 years at 35.6 million bags.
Robusta prices continued to find support on tightening global supplies. Reports from Vietnam showed a 31% year-on-year drop in exports for the month of January and ICE inventories also continued to shrink to the lowest volumes since 2016.
La Niña Continues to Ease
The latest forecast from Australia’s Bureau of Meteorology (BOM) notes that La Niña continues in the tropical Pacific, but oceanic sea surface temperatures (SST) indicators have weakened since their peak during the spring of 2022.
While ocean temperatures have eased from La Niña thresholds, the atmosphere has yet to respond, and remains La Niña-like.
FNC to Elect New Manager
Colombia’s National Coffee Committee met this week to define the organisation’s ongoing profile and determine the process for electing a new manager to head the organisation.
A number of candidates have been shortlisted to fill the position with Maria Claudia Lacouture, former minister of commerce and incumbent president of the US-Colombia chamber of commerce, Felipe Robayo, former commercial director of FNC, and Luis Enrique Dussan, governor of El Huila notable among them.
The meeting takes place against the backdrop of an ongoing investigation by the Colombian government’s Comptroller General Office into the loss of $120,000,000 USD by the organisation in futures trading.
Income From Coffee Plantations Grows
A recent study by the Federation of Industries of the State of São Paulo titled “Coffee Agribusiness - Production, Transformation and Opportunities”, has found that in the period between 2018 and 2021, Brazilian coffee plantations yielded on average R$21,700 (USD $4,220) per hectare, which represented a growth of 38% compared to the average performance of the period between 2008 and 2011, when productivity in value per hectare was R$16,800 (USD $3,270).
IMF Projects Global Inflation to Fall in 2023
In the latest report from the IMF (International Monetary Fund), global growth is projected to fall in 2023 and 2024 amid subpar economic growth. Projections show growth is likely to fall from an estimated 3.4 percent in 2022 to 2.9 percent in 2023, then rise to 3.1 percent in 2024.
The forecast for 2023 is 0.2 percentage point higher than predicted in the October 2022 World Economic Outlook (WEO) but below the historical average since 2000 of 3.8 percent.
Projections for real GDP Growth in Latin America show figures lagging the rest of the world. Brazil’s GDP is expected to increase 1.2% in 2023 and 1.5% in 2024. Colombia is expected to see a GDP growth of 1.1% in 2023 followed by a growth of 2.1% the following year.
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