The declaration, signed by Melissa Duncan, executive director of Fairtrade International, and Jeroen Douglas, the Director General of ICA, has solidified the organisations’ commitment to work together to advance the principles of democracy, empowerment, economic prosperity and distribution, and the convergence of economic, social, and environmental components of development.

The announcement was made during ICA’s General Assembly held in New Delhi, India this week. Tone Cecilie Faugli, the CEO of Fairtrade Norway, together with Fairtrade Network of Asia & Pacific Producers CEO Erwin Novianto and Fairtrade certified cooperatives are participating in the event.

“We’re excited to launch this partnership with ICA as we embark on this shared opportunity to leverage our strengths and work together to build strong cooperatives that achieve better, fairer, and more dignified labour relations. Successful cooperatives are the lifeblood of Fairtrade and essential for sustainable global trade,” said Melissa Duncan, Fairtrade’s Executive Director.

“This declaration cements our joint efforts towards creating impactful change for cooperatives worldwide,” said Jeroen Douglas, Director General of ICA. “Together, ICA and Fairtrade International will drive forward initiatives that support cooperatives in their sustainable business case though fair pricing. Only a price tag on fair wages, clean water, gender inclusion and the pure air we breathe will transform our economy to the needs of communities.”

Fairtrade International and ICA, both EU Financial Framework Partnership Agencies, have had fruitful collaboration in the past on policy influencing, evidence gathering research, and the sharing of best practices focusing on the management of sustainable supply chains and people-centred business models. Advocacy work on cooperatives’ priorities include the EU Deforestation Regulation and the Corporate Sustainability Due Diligence directive. ICA and Fairtrade are also both members of the EU’s Global Gateway Dialogue Platform.

The partnership agreement will now facilitate closer co-operation between ICA and Fairtrade International on emerging areas of expertise needed, such as cooperative legal frameworks, agroecology, climate change, youth inclusion, gender equality, among others. It will contribute to strengthen both organisations’ work on promoting inclusive and sustainable cooperatives and their communities through wealth creation and redistribution, democracy, empowerment. It will also advance efforts towards an ever-increasing convergence between the economic, social, and environmental components of development.

Under the flagship of the UN International Year of Cooperatives, this partnership is expected to enable more cooperatives and their members to realise sustainable livelihoods, fulfil their potential, and decide on their future, given the growing risks and challenges they face.

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The Colombian Milds and Other Milds decreased by 0.8% and 0.6%, reaching 277.10 and 276.82 US cents/lb, respectively, in October 2024. The Brazilian Naturals also depreciated, decreasing by 0.5% to 255.85 US cents/lb in October 2024. The Robustas contracted 8.3% to 221.93 US cents/lb. The New York and London ICE markets were drivers of the contraction, decreasing by 1.3% and 8.2% and reaching 250.62 and 207.11 US cents/lb, respectively.

On 2 October, a press release was published saying that the European Commission “strengthens support for EU Deforestation Regulation implementation and proposes extra 12 months of phasing-in time, responding to calls by global partners.” The news had a bearish impact on the I-CIP, with a market reaction driving the price to 245.29 US cents/lb by 7 October from 263.96 US cents/lb on 1 October. On 16 October, the Council agreed on its position on the targeted amendment of the EU Deforestation Regulation, postponing its date of application by 12 months. As a result, if agreed by the European Parliament, the obligations stemming from this regulation will be binding from 30 December 2025 for large operators and traders and from 30 June 2026 for micro- and small enterprises. The news of the agreement by the Council appears to have further added to the downward momentum of the I-CIP, which steadily fell throughout the remainder of the month, closing October at 242.25 US cents/lb. The Brazilian Real was an additional downward factor on the I-CIP, which reached a 3.5 year low against the dollar at 5.81 BRL to 1 USD on 31 October.

The Colombian Milds–Other Milds differential shrank from 0.75 to 0.28 US cents/lb between September and October 2024. The Colombian Milds–Brazilian Naturals differential contracted by 3.5% to 21.25 US cents/lb, whilst the Colombian Milds–Robustas differential expanded by 48.3% from September to October 2024, averaging 55.17 US cents/lb. Meanwhile, the Other Milds– Brazilian Naturals and Other Milds–Robustas differentials moved by -1.5% and 50.6% to 20.97 and 54.89 US cents/lb, respectively. The Brazilian Naturals–Robustas differential grew by 123.6%, averaging 33.92 US cents/lb in October 2024.

The arbitrage, as measured between the London and New York futures markets, expanded 54.2% to 43.50 US cents/lb in October 2024, marking its highest point in four months. This trend reversal could signal how the market is reacting to longer term higher Robusta prices, where the downward adjustment of the Robustas seems to be stronger in relation to the Arabicas, reflecting that the Robustas may have been overvalued. Furthermore, in September 2024, the Robustas grew month-on-month at a much faster rate than the Arabicas – 12.8% versus 6.2% – thereby permitting a more aggressive downward adjustment.

The intra-day volatility of the I-CIP expanded by 0.5 percentage points, averaging 11.0% in October 2024. The Colombian Milds’ volatility increased by 0.6 percentage points. The Other Milds’ volatility grew by 0.4 percentage points to 11.4% while the Brazilian Naturals followed the same uptrend, gaining 0.7 percentage points and averaging 12.1% in October 2024. The Robustas’ volatility contracted to 11.2% for the month of October, a 0.1 percentage point decrease. Lastly, New York’s volatility increased by 0.5 percentage points to 12.7% while the London futures market’s volatility also increased by 1.0 percentage points to 13.6%.

Exports by Coffee Groups – Green Beans
Global green bean exports in September 2024 totalled 9.69 million bags, as compared with 7.74 million bags in the same month of the previous year, up 25.2%. For coffee year 2023/24, exports of green beans were up 11.8% to 123.75 million bags from 110.72 million bags in coffee year 2022/23, an absolute increase of 13.02 million bags. This is the biggest annual increase on record, surpassing the previous highest of 9.27 million bags in coffee year 1995/96. The rate and the volume of increase in coffee year 2023/24 are largely a reflection of the base effect of two consecutive years of downturn (of 1.1% and 5.6%), with the world green bean exports falling from 118.66 million bags in coffee year 2020/21 to 110.72 million bags in coffee year 2022/23. As such, the double-digit increase in coffee year 2023/24 represents a recovery, and not necessarily an expansion, of the long-term trend. Contextualizing, world exports of green beans have been increasing at an average of 2.36 million bags every coffee year between coffee years 2010/11 and 2020/21, while there was an increase of only 1.69 million bags annually between coffee years 2020/21 and 2023/24. The actual exports level is below the potential level of 125.73 million bags.

Shipments of the Other Milds increased by 22.9% in September 2024 to 1.92 million bags from 1.56 million bags in the same period last year. For coffee year 2023/24, exports of the Other Milds were up 4.7% to 23.05 million bags from 22.02 million bags in coffee year 2022/23.

Green bean exports of the Brazilian Naturals increased in September 2024, jumping by 37.3% to 3.68 million bags. For coffee year 2023/24, exports of the Brazilian Naturals were up 22.6% to 41.89 million bags from 34.16 million bags in coffee year 2022/23.

Exports of the Colombian Milds increased by 22.3% to 0.99 million bags in September 2024 from 0.81 million bags in September 2023. For coffee year 2023/24, exports of the Colombian Milds were up 14.3% to 12.22 million bags from 10.69 million bags in coffee year 2022/23. For coffee year 2023/24, total green beans exports of Arabicas were up 15.47% to 77.17 million bags from 66.68 million bags in coffee year 2022/23.

Overall, for the Arabicas, the double-digit growth in coffee year 2023/24 should, like the total green bean exports, be viewed as recovery back onto the long-term trend. Like the total exports, exports of the Arabicas in coffee year 2023/24 followed two consecutive years of negative growth (3.1% and 10.4%) before recording the biggest absolute annual increase on record at 10.29 million bags. Contextualizing, exports of the Arabicas have been increasing at an average of 1.45 million bags every year between coffee years 2010/11 and 2020/21. The potential level of exports is 81.38 million bags.

Green bean exports of the Robustas were up 15.4% to 3.1 million bags in September 2024 from 3.59 million bags in September 2023. For coffee year 2023/24, exports of the Robustas were up 6.2% to 46.58 million bags from 43.84 million bags in coffee year 2022/23. It is the biggest annual exports on record and was largely driven by Brazil, which exported 9.02 million bags as compared with 2.84 million bags in coffee year 2022/23. The growth in Brazil’s exports more than compensated the large drop in exports from Vietnam, which shipped 23.19 million bags in coffee year 2023/24 as compared with 26.13 million bags in coffee year 2022/23. The origin, the world’s largest producer and exporter of Robustas, has been struggling with domestic supplies, with production falling below the potential levels due to adverse weather conditions.

For coffee year 2023/24, the Arabicas’ share of total green bean exports increased to 62.4% as compared with 60.4% in coffee year 2022/23.

Exports by Regions – All Forms of Coffee
In September 2024, South America’s exports of all forms of coffee increased by 30.8% to 6.2 million bags. For coffee year 2023/24, exports of the region were up 30.7% to 66.13 million bags from 50.59 million bags in coffee year 2022/23. The region’s two largest producers and exporters, Brazil and Colombia, saw their total exports jump by 34.3% and 13.7%, respectively, to 49.03 million bags and 11.91 million bags. For Brazil, these are the largest exports on record. Part of the impetus for Brazil’s growth was the gap in the market created by Vietnam in the Robustas market. Although it is not widely acknowledged, Brazil is the secondlargest Robustas producer in the world, accounting for 32.0% of global supply in coffee year 2022/23.

Exports of all forms of coffee from Africa increased by 14.3% to 1.37 million bags in September 2024 from 1.2 million bags in September 2023. For coffee year 2023/24, exports from the region were up 17.3% to 16.02 million bags from 13.66 million bags in coffee year 2022/23. Ethiopia was the main driver of the region’s double-digits growth, with the origin’s exports up 63.5% to 5.59 million bags in coffee year 2023/24 as compared with 3.42 million bags in coffee year 2022/23. These are the largest exports on record for the origin, and it is also the first time the 5.0 million bags ceiling has been breached. The underlying reason for Ethiopia’s double-digit growth was the resolution of internal contract disputes, which had led to export shipments being delayed in coffee year 2022/23. Once again, contextualization is necessary when analysing the exports of Ethiopia: exports fell in coffee year 2022/23 by 15.0% to 3.42 million bags from 4.02 million bags in coffee year 2021/22, the lowest level since 3.09 million bags in coffee year 2015/16. As a result, the 5.59 million bags should be viewed as a recovery.

In September 2024, exports of all forms of coffee from Mexico & Central America were up 18.1% to 0.9 million bags as compared with 0.76 million bags in September 2023. For coffee year 2023/24, exports of the region were down 4.1% to 14.51 million bags from 15.13 million bags in coffee year 2022/23. The downturn was primarily driven by Honduras and Nicaragua, which suffered from decreases of 12.1% and 16.5%, respectively. The former’s exports were hampered by its off-years in the biennial production cycle, while the latter’s exports were negatively affected by the bankruptcy of Mercon Coffee Group in December 2023, a coffee trader and the owner of CISA Exportadora, a company responsible for more than half of Nicaragua’s coffee exports. Exports from Guatemala and Mexico were the two main mitigating positive factors of the region, increasing by 8.6% and 8.9% to 3.28 million bags and 2.97 million bags, respectively.

Exports of all forms of coffee from Asia & Oceania increased by 19.6% to 2.29 million bags in September 2024 as compared with 1.91 million bags in September 2023. For coffee year 2023/24, exports of the region were down 6.7% to 40.62 million bags from 43.54 million bags in coffee year 2022/23. Vietnam, the largest producer and exporter in Asia & Oceania, was the main driving force behind the region’s annual downturn, with its exports decreasing by 11.7% to 24.96 million bags. This is the lowest exports level since 22.03 million bags in coffee year 2014/15. Tightness in domestic supply due to lower production from adverse weather conditions and loss of productive areas to other cash crops, and depletion of local stocks, was the main reason for the double-digit downturn. India was a positive mitigating factor within the region, recording a 10.0% increase in its exports to 6.98 million bags in coffee year 2023/24 as compared with 6.34 million bags in coffee year 2022/23.

Exports of Coffee by Forms
Total exports of soluble coffee increased by 24.3% in September 2024 to 1.02 million bags from 0.82 million bags in September 2023. For coffee year 2023/24, soluble coffee exports were up 11.6% to 12.82 million bags from 11.48 million bags in coffee year 2022/23.

Soluble coffee’s share in the total exports of all forms of coffee for the year to date was 9.3% in September 2024, the same for the same period a year ago. Brazil is the largest exporter of soluble coffee, having shipped 0.37 million bags in September 2024 and 3.89 million bags in coffee year 2023/24.

Exports of roasted beans were down 9.2% in September 2024 to 54,544 bags, as compared with 60,040 bags in September 2023. For coffee year 2023/24, roasted coffee exports were down 0.5% to 0.71 million bags from 0.713 million bags in coffee year 2022/23.

For the full report, visit icocoffee.org.

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 Zone Latin America (LATAM) and Zone North America (NA) will merge to form Zone Americas (AMS), which will be led by Steve Presley. He will relocate to Nestlé’s headquarters in Vevey, Switzerland.
 Zone Greater China Region (GCR) will become part of Zone Asia, Oceania and Africa (AOA), under the leadership of Remy Ejel. David Zhang will step down from the Executive Board and will remain Chairman and CEO of the Greater China Region.
 Zone Europe (EUR) will continue to be led by Guillaume Le Cunff and remains unchanged.

Laurent Freixe, Nestlé CEO, said, “A leaner Executive Board structure and close collaboration of the leadership team at the headquarters will increase simplicity, speed up decision-making and strengthen the momentum behind global initiatives. We will continue to build on the strengths of our Market Heads to ensure consistent in-market execution across the Group.” Pursuant to the reducing the Executive Board, Freixe announced:

 Bernard Meunier has decided to step down from the Executive Board on 31 March 2025, and will lead strategic projects for the Group. David Rennie, currently head of Nestlé Coffee Brands will succeed Bernard Meunier as the head of Strategic Business Units (SBUs) and Marketing and Sales. Nestlé Coffee Brands, with the exception of Nespresso, will be integrated into the SBU organisation.
 Nespresso is led by Philipp Navratil. He will join the Executive Board and now report directly to Nestlé CEO Freixe. Philipp Navratil is known for his ability to inspire and motivate people. He has extensive global experience across various roles and a profound understanding of Nestlé.
 Nestlé Health Science will continue to be led by Anna Mohl.
 Antonia Wanner, who leads the Sustainability Unit, will now report directly to Freixe without holding a position on the Executive Board.

Starting in 2025, Nestlé’s reporting will comprise five segments: Zone AMS, Zone AOA, Zone EUR, Nestlé Health Science and Nespresso. The company will also continue to voluntarily report sales performance each quarter for North America and for Latin America within Zone AMS and for Greater China within Zone AOA.

Freixe added, “With these organisational changes, all the leaders of key units driving our performance and our transformation will now report directly to me. This is crucial, as we sharpen our focus on consumers and customers and restore investment in our brands and in innovation to expand market share and accelerate our performance. Going forward, we are also placing a greater emphasis on Nestlé’s digital transformation into a real-time, end-to-end connected, data- and AI-powered organisation. I am confident these changes will optimally position Nestlé for future success.”

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The I-CIP averaged 258.90 US cents/lb in September, an 8.4% increase from August 2024. The I-CIP posted a median value of 264.57 US cents/lb and fluctuated between 241.20 and 272.70 US cents/lb. The September 2024 I-CIP is above the September 2023 I-CIP by 69.1%, with the 12-month rolling average at 201.71 US cents/lb.

The Colombian Milds and Other Milds increased by 5.9% and 6.5%, reaching 279.27 and 278.52 US cents/lb, respectively, in September 2024. The Brazilian Naturals also appreciated, increasing by 6.2% to 257.24 US cents/lb in September 2024. The Robustas outperformed all groups of coffee, expanding 12.8% to 242.08 US cents/lb. The New York and London ICE markets were drivers of growth, expanding by 6.0% and 13.8% and reaching 253.89 and 225.68 US cents/lb, respectively–the highest point since September 2011 for the Arabica futures, and the highest point since May 1977 for the Robusta futures (nominal prices).

Strong consumer demand continued to apply positive price pressure on the I-CIP as people returned to work in September following the northern hemisphere summer holidays. The rise in climate-related irregularities also contributed to upward pressure on prices via logistical disruptions – Typhoon Yagi not only claimed several lives, but damaged infrastructure and homes through extensive flooding and mudslides. There has been increased disruption to return flows of empty containers as key shipping routes remain susceptible to the effects of geo-political tensions. As attacks from insurgents continue to threaten commercial maritime routes in the Bab al-Mandab Strait, shipping lines continue to re-route their operations through the Cape of Good Hope. Also adding to logistical pressure was the news of a potential strike at the US East Coast ports, first heard over the second half of September. The strike ultimately went ahead on 1 October and ended on 3 October.

The Colombian Milds–Other Milds differential shrank from 2.33 to 0.75 US cents/lb between August and September 2024. The Colombian Milds–Brazilian Naturals differential expanded by 2.1% to 22.03 US cents/lb, whilst the Colombian Milds–Robustas differential declined by 24.2% from August to September 2024, averaging 37.20 US cents/lb. Meanwhile, the Other Milds– Brazilian Naturals and Other Milds–Robustas differentials moved by 10.6% and -22.0% to 21.28 and 36.45 US cents/lb, respectively. The Brazilian Naturals–Robustas differential retracted by 44.9%, averaging 15.17 US cents/lb in September 2024.

The arbitrage, as measured between the London and New York futures markets, contracted 31.8% to 28.21 US cents/lb in September 2024, marking its lowest point since March 2003. The intra-day volatility of the I-CIP retracted by 0.4 percentage points, averaging 10.5% in September 2024. The Colombian Milds’ volatility decreased by 0.1 percentage points. The Other Milds’ volatility grew by 0.2 percentage points to 11.0% whilst the Brazilian Naturals lost 0.1 percentage point, averaging 11.4% in September 2024. The Robustas’ volatility contracted to 11.3% for the month of September, a 0.8 percentage point decrease. Lastly, New York’s volatility increased by 0.1 percentage points, whilst the London futures market’s volatility decreased by 0.9 percentage points to 12.6%.

Exports by Coffee Groups – Green Beans
Global green bean exports in August 2024 totalled 9.91 million bags, as compared with 9.11 million bags in the same month of the previous year, up 8.8%. This is the tenth consecutive month of positive growth, resulting in the cumulative total for coffee year 2023/24 to August 2024 being up 10.5% at 113.81 million bags as compared with 102.99 million bags over the same period a year ago. The Robustas was the main group responsible for the overall strong growth seen in August 2024, accounting for 59.8% of the 0.8-million-bags net gain in total exports.

Exports of the Colombian Milds increased by 26.7% to 1.05 million bags in August 2024 from 0.83 million bags in August 2023. The latest jump in the exports was driven by Colombia, the group’s largest producer and exporter, with its August 2024 exports up 27.9% to 0.95 million bags as compared with 0.75 million bags in August 2023. The cumulative total for the origin is 10.06 million bags, up 16.1% versus the 8.66 million bags exported from October 2022 to August 2023. Exports of the Colombian Milds for the first 11 months of coffee year 2023/24 are up 13.6% at 11.22 million bags, as compared with 9.88 million bags in the first 11 months of coffee year 2022/23.

Shipments of the Other Milds increased by 5.6% in August 2024 to 1.99 million bags from 1.88 million bags in the same period last year. This is the fifth instance of positive growth since the beginning of coffee year 2023/24. The cumulative volume remained up at 2.2% in the first 11 months of said coffee year and is now at 20.91 million bags as compared with 20.46 million bags last coffee year. Ethiopia, Guatemala and Peru were the three main drivers of the region’s 5.6% growth in exports, with a combined net increase of 0.25 million bags, while Honduras continued to be the main driver of negative growth, with a net decrease of 0.14 million bags. Honduras is currently in the “off-year” of its biennial production cycle, and the cumulative total of the origin’s Other Milds to August 2024 is down 12.9% at 4.46 million bags from 5.12 million bags in the same period a year ago, negatively weighing on the overall export performance of the Other Milds.

Green bean exports of the Brazilian Naturals decreased in August 2024, falling by 0.2% to 3.036 million bags from 3.042 million bags in August 2023. The latest growth is the first negative growth rate in the past 11 months for the group. It mainly stems from the change in the dynamics of the group’s largest producer and exporter, Brazil. In August 2024, exports of Brazilian Naturals from Brazil fell by 6.2% following eight consecutive months of double-digit growth, which had averaged 30.1%. The sudden change in the direction of the growth rate of the group and origin is in large part due to a base effect. Exports from Brazil in August 2023 were an anomalous 2.62 million bags, the third-largest August exports in history, up 16.0% over August 2022. Coffee year 2023/24 was an “off-year” for Brazil, and as such the volume of exports in August 2023 was expected to be lower, with historic data suggesting that Brazil would export 2.24 million bags.

However, the knock-on effect of the frost in 2021 turned it into a good “off-year” for Brazil, resulting in a higher-than-expected volume of exports. Furthermore, in August 2024 Brazil faced significant challenges in exports logistics, with 86% of shipments subject to delays and changes in schedules as compared with 60% in August 2023 at the port of Santos, the largest port for coffee exports. The Brazilian Naturals saw only a shallow downturn in August, mainly due to the 64.0% increase in exports from Ethiopia, which had a net gain of 0.16 million bags. For the first 11 months of coffee year 2023/24, green bean exports of the Brazilian Naturals amounted to 38.22 million bags, up 21.4% from 31.49 million bags over the same period a year ago.

Green bean exports of the Robustas were up 14.3% to 3.84 million bags in August 2024 from 3.36 million bags in August 2023. As a result, the growth rate of the cumulative total accelerated, increasing to 5.6% in August 2024 from 4.8% in July 2024, with total shipment at 43.46 million bags as compared with 41.16 million bags in the first 11 months of coffee year 2022/23. The main drivers of August’s double-digit growth rate were Brazil, India and Indonesia, whose combined exports were up 36.2% at 1.66 million bags as compared with 1.22 million bags in August 2023. The three origins accounted for 92.1% of the net gain made by the Robustas in August 2024.

Exports by Regions – All Forms of Coffee
Exports of all forms of coffee from Asia & Oceania increased by 6.2% to 2.93 million bags in August 2024. This is the first positive growth rate in the past four months and it was mainly driven by Indonesia and India. The region’s second- and third-largest producers and exporters saw their respective exports increase by 26.3% and 31.3% to 0.89 million bags and 0.57 million bags as compared with 0.68 million bags and 0.45 million bags in August 2023.

Together the two origins accounted for 82.9% of the region’s 0.17-million-bag net rise. Vietnam, Asia & Oceania’s largest producer and exporter of coffee, saw its exports fall by 12.1% in August 2024 to 1.3 million bags from 1.44 million bags. The latest downturn marked the ninth in total and seventh consecutive decline for Vietnam in coffee year 2023/24, and as a result the country’s cumulative exports up to August 2024 fell to 24.09 million bags from 27.4 million bags between October 2022 and August 2023, down 12.1%. The latest decrease continues to be due to tightness in domestic supply, which is waiting for new supply from the 2024/25 harvest, the start of which is still one month away.

Exports of all forms of coffee from Africa increased by 29.5% to 1.75 million bags in August 2024 from 1.35 million bags in August 2023. As a result, the cumulative total for the first 11 months of coffee year 2023/24 is 14.62 million bags, up 17.3% compared with the 12.46 million bags shipped in coffee year 2022/23. Ethiopia was the main driving force behind the region’s growth in August 2024, with the origin’s exports having increased by 62.4% to 0.6 million bags as compared with 0.37 million bags in August 2023. Ethiopia had accounted for 57.5% of Africa’s August 2024 net rise. Côte d’Ivoire and Uganda were secondary positive drivers of Africa’s double digit growth in August, combining to account for 43.2% of the 0.4-million-bag net rise of the region, increasing by 48.5% and 4.5%, respectively.

In August 2024, South America’s exports of all forms of coffee increased by 8.6% to 5.41 million bags. As a result, the cumulative total of 59.84 million bags for the first 11 months of coffee year 2023/24 is up 30.5% as compared to the 45.85 million bags shipped in coffee year 2022/23. Colombia was the source of the strong positive growth of the region, which saw its exports increase by 13.4% in August 2024 to 1.04 million bags from 0.83 million bags in August 2023. As a result, the origin accounted for 52.9% of South America’s 0.43-million-bag net rise in August 2024. Much of the gains made by Colombia in August were down to the base effect, reflecting the historically low exports in August 2023, when 0.83 million bags were shipped. The average exports in August from 2017 to 2021 were 38.0% higher, at 1.14 million bags. Peru accounted for 31.8% of the net rise of the region, with August 2024 exports at 0.55 million bags, up 30.0%. This brings the cumulative total for Peru for the first 11 months of coffee year 2023/24 to 3.83 million bags from 2.37 million bags in the same period a year ago. Exports from Peru are enjoying the benefits of its on-years in the biennial production cycle.

In August 2024, exports of all forms of coffee from Mexico & Central America were down 28.7% to 0.83 million bags, as compared with 1.16 million in August 2023. As a result, cumulative total exports remain down at −10.3%, having decreased to 12.88 million bags, as compared with 14.36 million bags for the same period a year ago (October 2022 to August 2023). Honduras was, once again, the main negative driver of the region’s exports performance in August 2024. Exports from Honduras continue to be hampered by its off-years in the biennial production cycle, said exports being down 12.9% to 0.25 million bags in August 2024 from 0.39 million bags in August 2023.

Exports of Coffee by Forms
Total exports of soluble coffee increased by 13.3% in August 2024 to 1.22 million bags from 1.08 million bags in August 2023. In the first 11 months of coffee year 2023/24, a total of 11.79 million bags of soluble coffee was exported, representing an increase of 10.6% from the 10.66 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 9.3% in August 2024, the same as in August 2023. Brazil was the largest exporter of soluble coffee in August 2024, shipping 0.33 million bags.

Exports of roasted beans were down 19.7% in August 2024 to 47,730 bags, as compared with 59,417 bags in August 2023. The cumulative total for coffee year 2023/24 to August 2024 is 0.63 million bags, as compared with 0.65 million bags in the same period a year ago.

For the full ICO September report, visit: icocoffee.org.

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From 1 July 2024, for every purchase of Great Rift and Decaf Everyday 80s tea bags, 5p will be donated directly to Tusk. This initiative underscores Birchall Tea’s commitment to sustainable and ethical practices while supporting Tusk’s African wildlife conservation efforts, says the company.

The collaboration aims to raise significant funds to aid Tusk’s mission to help increase awareness, funding and wider support for Tusk conservation partners’ efforts across Africa. Birchall’s black teas are sourced exclusively from East Africa, which has the perfect tea growing conditions due to heavy rainfall and rich volcanic soil. Birchall Tea’s donations will directly contribute to Tusk’s efforts to protect endangered species, conserve habitat, enhance biodiversity, promote human-wildlife coexistence and deliver environmental education.

“We are thrilled to partner with Tusk and contribute to their incredible work in wildlife conservation,” said Daniel Graham, managing director of Birchall Tea. “Our Great Rift and Decaf Everyday teas are enjoyed by many, capturing the freshness and delicious taste of Kenya’s Great Rift Valley, and now each cup can make a difference in preserving Africa’s natural heritage.”

To celebrate the launch of the Birchall/Tusk partnership, Birchall Tea will be offering a special promotion. From 1 – 31 July, customers will be able to enjoy a 20% discount on all purchases made through the Birchall Tea website (birchalltea.co.uk).

Dan Bucknell, executive director of Tusk, expressed his enthusiasm for the partnership: “Tusk is excited to collaborate with Birchall Tea and are grateful for their generous support. The funds raised through this initiative will play a crucial role in our conservation projects, and will help to ensure the protection of endangered species in partnership with communities across Africa.”

Birchall Tea’s core retail packs, including the Great Rift and Decaf Everyday 80s tea bags, are available at major retailers such as Ocado, Booths, Amazon, and Selfridges, in addition to the Birchall Tea website. With every purchase, customers are not only enjoying high-quality tea but also supporting Tusk’s vision: an Africa in which biodiversity flourishes and people thrive.

For more information on Birchall Tea’s partnership with Tusk, visit birchalltea.co.uk.

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Led by Dimitra Europe GmbH, a subsidiary of Dimitra Incorporated, this partnership utilises blockchain technology to enhance farming processes and ensure market compliance with the upcoming European Union Deforestation Regulation (EUDR), set to take effect at the end of 2024.

As part of the new partnership, Arasco will employ Dimitra’s tailored Connected Coffee platform to allow farmers access to blockchain traceability solutions that will act as a transparent, traceable supply chain for regulators and smallholder farmers. The pilot project aims to ease the burden of data management for smallholders and family farmers in Cameroon to ensure they receive certificates of compliance in line with new EU regulations, which will ban imports from crops grown on deforested land after 2020. The project will onboard 5,000 farmers to the Connected Coffee mobile application, providing them with comprehensive tools for farm registration, crop management, farmer surveys, and data acquisition.

Andreas Cerdan, director of Dimitra Europe, said: “Our Dimitra team is excited to be working with Arasco to prepare one of their key coffee origins for EUDR compliance. Rather than shying away from remote origins, Arasco takes this decisive step towards a fully digitised supply chain.”

Dimitra’s Connected Coffee platform draws data from various emerging technologies (including AI, satellite imagery, IoT, genomics and more). It translates these many data points for agriculturalists, helping to stabilise year-round production and increase the quality and quantity of coffee cherries produced per farm. Dimitra tracks the flow of goods from farms to Arasco’s processing units, ensuring they can improve processes and ensure regulatory compliance across global markets for local stakeholders, farmers, and traders.

Müsteçep Aras, CEO of Arasco Food BV, said: “At Arasco Food BV, we are thrilled to announce our collaboration with Dimitra. This partnership represents a significant step forward in improving the socioeconomic conditions of thousands of farmers in Cameroon through digitisation. By adopting the Connected Coffee app, we can enhance sustainable coffee production and trading in line with EUDR while we also support the local communities. We are excited to be part of this transformative journey and look forward to the positive impact it will bring.”

Farm registration and training have already commenced in the Littoral and West regions of Cameroon. Upon completion of the pilot programme, Dimitra and Arasco plan to implement across further global supply chains to continue the commitment to full traceability and compliance.

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The global green tea market is steadily growing these days thanks to maintaining stable consumption and its favourable image as a healthy drink.

Since the end of the pandemic, consumption of green tea has significantly increased with the best dynamics being observed in its major consuming regions, among which are primarily Asian and African nations.

Matthew Barry, insight manager, food and beverage at Euromonitor International said that presently, green tea is the second-most important segment of the global tea market, with most consumption occurring in either East Asia or North Africa. “In both of these areas, green tea has a very strong historical tradition associated with it, and it represents a large portion of overall tea consumption. China by itself is roughly half the global market, followed by Morocco, Indonesia, and Japan,” he explained.

“Outside of those two regions green tea has a presence virtually everywhere, but it is very unusual to see it rise much beyond a fifth of the total tea market. In the rest of the world there is not much of a historical tradition of green tea drinking so it tends to appeal mostly to wellness-oriented minorities of tea drinkers.”

China & Japan: green tea behemoths

China and Japan traditionally have been the largest producers and suppliers of green tea on a global scale. The level of their domestic consumption has declined in recent years but it has been compensated for by the increase in exports overseas.

In the case of China, since the beginning of the 2000s, the country has significantly increased its green tea exports, which are currently valued in the range of USD $1.3 to $1.4 billion annually. According to earlier data from the 2022 China Tea Import and Export Trade Analysis Report, among the major green tea-producing and exporting provinces in China, Zhejiang Province ranks first with an export volume of 147,000 tonnes and a value of $451.22 million, along with Fujian Province and Anhui Province.

As for the domestic market, according to China Tea Circulation Association data, sales of green tea in China in 2022-2023 were equivalent to 1.2-1.3 million tonnes annually, accounting for 58.1 percent of the total sales. In terms of the other teas China produces:

✦ Black tea – 314,800 tonnes, accounting for 14.3 percent;
✦ Dark tea – 313,800 tonnes, accounting for 14.2 percent;
✦ Oolong tea – 200 tonnes, accounting for 10 percent;
✦ White tea – 62,500 tonnes, accounting for 2.8 percent; and
✦ Yellow tea – 12,300 tonnes, accounting for 0.6 percent.

Japan’s green tea sector has also been experiencing a renaissance. Due to the impact of the Japanese food boom and increasing health consciousness, the amount of Japanese tea exports has more than doubled over the past ten years. According to Japanese Ministry of Finance Trade Statistics data, the demand for powdered tea, including matcha, has increased, and exports in 2023 reached a record high of approximately 21.9 billion yen (approximately $132.6 million). The bulk of exports goes to the United States, which accounts for about 34 percent of the total export volume, most of it is matcha, while leaf tea is popular in the European Union and Taiwan. The Ministry reports that organically grown tea accounts for nearly 80 percent of exports to the European Union and United Kingdom, the bulk of which is green tea.

The Ministry also noted that the current popularity of Japanese green tea in the US is also reflected by the fact that many Silicon Valley companies even offer Japanese green tea as a work conditioning drink in their employee welfare programmes.

Traditionally, most Japanese green tea is produced and grown in the Shizuoka Prefecture, Japan’s leading tea-producing area and its Shizuoka City is known as the ‘town of tea’.

The Japanese Ministry of Agriculture, Forestry and Fisheries is creating conditions for a further increase of exports of Japanese green tea internationally. By 2025, the export value of Japanese green tea should reach 31.2 billion yen (about $197 million), compared with about 25 billion yen (about $158.8 million) in 2023. This is part of the existing state strategy to increase the overall export value of Japan’s agricultural products to over 2 trillion yen in 2025 (circa $12.63 billion) and 5 trillion yen (circa $31.57 billion) in 2030.

Consumption grows in Africa

In recent years, the African region has become one of the major consumers of green tea. For example, Morocco, located in Northern Africa, currently ranks as the world’s sixth largest tea consumer. Green tea accounts for the bulk of tea consumed in the country and it is supplied by China, which leads in terms of tea exports to the region, well ahead of its major rivals.

Harvesting in West Java. Image: Barbara Dufrene

Official statistics of the Moroccan Association of Tea and Coffee Producers (AMITC), report that the kingdom alone accounts for nearly 25 percent of the overall volume of global exports of China green tea, including 46 percent of the ‘Gunpowder’ variety and 54 percent of the ‘Chunmee’ variety.

According to AMITC data, with an annual average of 82,000 tonnes, Morocco is considered one of the world’s leading importers of tea, most of is green tea varieties. Per capita consumption of green tea in the country is estimated at 1.85 kilos per year. AMITC plans to launch production of its own green tea brand as efforts to grow tea started in the 1970s in the Larache region of the country.

In general, green tea consumption in the North African region and in countries in the Sahara region such as Mauritania, Mali, Chad, Niger, Burkina Faso, Senegal, and Ivory Coast has significantly increased in recent years, and the growth is ongoing.

Most analysts expect that with the emergence of Northern Africa as one of the world’s major green tea-consuming hubs, the level of competition for its market among global producers will be heightened in years to come.

In addition to China and Japan, the African region is also under the radar of another major regional player — Indonesia.

Indonesia: growing production

In accordance with the Indonesian Tea Statistics Report from the Central Statistics Agency (BPS), the national tea production in the country varied in the range of 120,000-130,000 tonnes annually during the period of 2022-2023 with the possibility of an increase this year.

In geographical terms, West Java is the largest tea producer in Indonesia with a volume of 66.87 percent of total national production in 2023. Currently, tea is planted on an area of 108.75 hectares in Indonesia with an average productivity of 1.6 tonnes/hectares/year. Most of these areas are green tea. However, according to local experts, the capacity of Indonesia’s green tea processing industry is still limited.

Despite maintaining a high popularity, most analysts do not expect a sharp growth in demand for green tea in Indonesia, over the next several years. Per EM’s Barry, “we are anticipating a slight decline in global green tea consumption [between] 2024 and 2025 of around 1 percent in retail volume terms. That is primarily coming from declining consumption in China and Japan, both of which are very mature markets and facing challenging demographics.”

New green tea markets

In addition to the African nations, a major impetus for a further growth of green tea and its consumption is expected to be provided by India, as well as Turkey and some Arabian nations to a lesser extent.
“The standout in green tea consumption growth is absolutely India, which has been seeing consistent double-digit consumption increases for some time. There is little reason to expect that to slow down.

India is already of course a massive consumer of tea, but health and wellness trends have shifted an increasing number of Indian consumers towards green over the black tea that has historically dominated in India,” Barry explained. “A couple of other big historically black-drinking markets are also seeing similar shifts, such as Turkey and Saudi Arabia.” He said black tea is not seriously threatened in any of these countries but there is an increasing number of occasions shifting to green.

The green tea segment has always been of interest to global players, many of which have significantly expanded their presence in recent years.

An example is US-based Harney & Sons Teas, which has continued to increase its green tea offerings, most notably introducing additional specialty Japanese teas. Emeric Harney, a spokesperson for the company, said that one of its new green teas is called Wazuka Guricha and comes from the Wazuka Valley, the other Asanoka Sencha from the Miyakazi prefecture.

Harney believes the US will provide some major opportunities for growth in the coming years. “America will continue to grow its green tea consumption in 2024. We still find that our export markets show a tempered interest in green teas.”

The US market will remain a priority for another major player – The Republic of Tea. Kristina Tucker, minister of enlightenment and commerce at The Republic of Tea, said the brand continues to see demand for innovative green tea blends. “Our organic Double Green Matcha in tea bags consistently grows year over year since its launch in 2007. Demand for matcha is growing fast again as well as our green teas with a wellness benefit, such as our organic SuperGreen Brain Boost tea.”
Currently, The Republic of Tea offers over 50 varieties of green tea, and “we plan to continue to innovate new blends for green tea lovers. As our focus is on the American tea drinker, we certainly anticipate continued strong demand for green teas in the USA.”

• Eugene Gerden is an international freelance writer who specialises in covering the global coffee, tea and agricultural industries. He works for several industry titles and may be reached at gerden.eug@gmail.com.

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The I-CIP averaged 216.89 US cents/lb in April, a 16.4% increase from March 2024. The I-CIP posted a median value of 221.99 US cents/lb, having fluctuated between 193.39 and 235.50 US cents/lb. The April 2024 I-CIP is above the April 2023 I-CIP by 21.5%, with the 12-month rolling average at 172.01 US cents/lb. The I-CIP grew steadily in April 2024, reaching a 13-year high. Following a similar trend, the Robustas price also hit a 45- year high, reaching its highest level since July 1979, when it averaged 195.90 US cents/lb.

In the first half of April 2024, the I-CIP surged 21.8% from 193.39 to 235.50 US cents/lb on the back of heavy rainfall in Minas Gerais, Brazil, which will affect the country’s 2024/25 supply. Vietnam also continues to face supply difficulties on the back of poor harvests in coffee years 2022/23 and 2023/24. On 26 March, Vietnam’s agriculture department projected that its national coffee production in the 2023/24 crop year could drop by –20% to 1.472 million metric tonnes, the lowest in four years, due to drought. This was reflected in the surging domestic Robusta green bean price in the country, which rose to over 132,000 VND/KG by 26 April from an average of 80,000 VND/kg on 15 February 2024 and 61,000 VND/kg in mid-November 2023. The surge was broken on 19 April on the back of three factors: (i) recovery of ICE warehouse stocks; (ii) profit taking on the paper market (the net long position on the ICE’s Europe market retreated by 5,042 lots between 16 and 23 April 2024); and (iii) the strengthening dollar (moving from 5.29 Real to 1 US$ on 16 April to 5.12 Real to 1US$ on 30 April). As a result, the I-CIP fell to 218.10 US cents/lb by 30 April.

The Colombian Milds and Other Milds increased by 15.0% and 14.8%, reaching 241.80 and 239.73 US cents/lb, respectively, in April 2024. The Brazilian Naturals presented the strongest increase amongst all coffee groups, at 17.8%, reaching an average of 218.77 US cents/lb. The Robustas grew by 16.8% to 193.65 US cents/lb in April 2024, the highest level in 45 years. ICE’s London market was also a strong driver of the growth, increasing by 18.5% to 176.04 US cents/lb, whilst the New York Futures market expanded by 18.1% to 217.97 US cents/lb, a 20-month high.

The Colombian Milds–Other Milds differential expanded from 1.41 to 2.07 US cents/lb. The Colombian Milds–Brazilian Naturals differential contracted 6.0% to 23.03 US cents/lb, whilst the Colombian Milds–Robustas differential expanded 8.4% from March to April 2024, averaging 48.14 US cents/lb. Meanwhile, the Other Milds–Brazilian Naturals differential shrank 9.2% reaching 20.96 US cents/lb. However, the Other Milds–Robustas and the Brazilian Naturals– Robustas differentials both expanded 7.1% and 26.1%, averaging 46.07 and 25.11 US cents/lb, respectively, in April 2024.

The downtrend of the Arabica and Robusta arbitrage, as measured between the London and New York Futures markets, is now over two years long, falling from 130.30 US cents/lb in April 2022 to 41.93 US cents/lb in April 2024, i.e. a 67.8% decline. However, measured against March 2024, the arbitrage expanded by 16.3% in April 2024.

Intra-day volatility of the I-CIP increased by 0.9 percentage points to 8.0% between March and April 2024. The Colombian Milds’ and Other Milds’ volatility increased to 8.5% and 8.2%, respectively. Meanwhile, the Brazilian Naturals’ volatility grew by 0.9 percentage points to 9.0% from March to April 2024. The Robustas presented an average volatility of 9.1% for the month of April. The London Futures market’s volatility also increased by 0.3 percentage points to 9.7%. Lastly, the New York futures market’s volatility moved in the same direction to that of London, reaching 9.1%, a 0.5 percentage point increase.

The London certified stocks expanded by 27.4% to 0.63 million 60-kg bags. Certified stocks of Arabica coffee reached 0.64 million 60-kg bags, a 1.7% increase since March 2024.

Exports by coffee groups – green beans

Global green bean exports in March 2024 totalled 11.87 million bags, as compared with 10.85 million bags in the same month of the previous year, up 9.4%. As a result, the cumulative total for coffee year 2023/24 to March is 62.64 million bags, as compared with 56.36 million bags over the same period a year ago, up 11.1%. The Brazilian Naturals and Robustas were the two main groups responsible for the overall strong growth observed in March 2024, together accounting for 91.5% of the 1.02-million-bag net gain in total exports. This further consolidated their already-dominant positions, increasing their combined share of the total exports to 72.5% in March 2024 as compared to 70.8% in March 2023. For the year to date, the combined share is an even higher 73.4%.

Shipments of the Other Milds decreased by 1.6% in March 2024 to 2.19 million bags from 2.22 million bags in the same period last year. As a result, the growth rate of the cumulative volume decreased to 4.2% in the first six months of coffee year 2023/24 to 9.87 million bags, as compared with the 6.0% growth rate in the first five months. In March 2024, 15 of the 29 origins in this coffee group saw their exports fall, with Costa Rica, Guatemala, Laos and Uganda suffering the largest absolute losses. On the opposite side, Ethiopia, Honduras, Papua New Guinea and Peru saw the highest absolute net gains.

Green bean exports of the Brazilian Naturals increased in March 2024, rising by 19.0% to 3.57 million bags from 3.0 million bags in March 2023. For the first six months of coffee year 2023/24, green bean exports of the Brazilian Naturals amounted to 21.36 million bags, up 17.5% from 18.19 million bags over the same period a year ago. The sharp positive growth rate stems from the 16.1% increase in exports of the Brazilian Naturals from Brazil, the biggest producer and exporter of this group of coffee, which rose to 3.07 million bags in March 2024 from 2.64 million bags in March 2023.

Exports of the Colombian Milds increased by 12.8% to 1.07 million bags in March 2024 from 0.95 million bags in March 2023. As a result, exports of the Colombian Milds for the first six months of coffee year 2023/24 are up 11.5% at 6.25 million bags, as compared with 5.6 million bags in the first six months of coffee year 2022/23. The double-digit growths, for both the current month and coffee year to date, are a consequence of the 11.9% weather-driven fall in exports in coffee year 2022/23 and subsequent normalization of supply conditions in Colombia, the largest producer and exporter of the Colombian Milds. For the current month and cumulative total to March 2024, the country’s exports of the Colombian Milds are up 12.4% and 13.1%, respectively.

Green bean exports of the Robustas were up 7.8% to 5.04 million bags in March 2024 from 4.68 million bags in March 2023. The cumulative total for the first six months of coffee year 2023/24 is up 8.9%, at 25.16 million bags, as compared with 23.1 million bags in the first six months of coffee year 2022/23. The main driver of March’s Robustas increase was Brazil, which shipped 0.85 million bags as compared with 0.11 million bags in March 2023, up 686.1%.

Exports by regions – all forms of coffee

Exports of all forms of coffee from Asia & Oceania decreased by 9.7% to 4.54 million bags in March 2024. The two main sources of the near double-digit downturn are Indonesia and Vietnam, which saw their exports fall by 33.5% and 10.2%, respectively, to 0.31 million bags and 3.22 million bags in March 2024. As a result, Indonesia’s exports to date in coffee year 2023/24 are down 21.8% at 3.04 million bags, the lowest level since coffee year 2018/19. The fundamental reason behind the fall is the shortage of local supply due to the poor harvest in coffee year 2023/24, which is estimated at 10.0 million bags as compared with 11.98 million bags in the previous coffee year. Vietnam’s latest performance is mitigated by the unusually high exports seen in March 2023, when the country shipped 3.58 million bags, the second highest March exports on record. To put this into perspective, the March 2024 exports of 3.22 million bags are above the average March volume from 2019 to 2023 (3.12 million bags).

Exports of all forms of coffee from Africa increased by 12.6% to 1.19 million bags in March 2024 from 1.06 million bags in March 2023. As a result, the cumulative total of 6.22 million bags for the first six months of coffee year 2023/24 is up 0.6% as compared with the 6.18 million bags shipped in coffee year 2022/23. Ethiopia was the driving force behind the region’s growth in March 2024, with its own exports having increased by 112.8% to 0.38 million bags from 0.18 million bags in March 2023. The size of the rebound is due to a favourable base effect and a comparative normalization of market circumstances. Contract disputes arising from a mismatch between local purchasing prices and global market prices had previously affected the volume of exports, leading March 2023’s shipment to be the lowest since 2012.

In March 2024, South America’s exports of all forms of coffee increased by 33.1% to 5.49 million bags. As a result, the cumulative total of 33.56 million bags for the first six months of coffee year 2023/24 is up 28.7% as compared with the 26.07 million bags shipped in coffee year 2022/23. The source of the strong positive growth is Brazil, which saw its exports increase by 38.8% in March 2024 to 4.31 million bags. The size of the latest growth of Brazil’s export volume remains a reaction to the 20.2% fall in the March 2023 exports (3.1 million bags). Fundamentally, South America’s and Brazil’s strong export performance reflects Brazil’s good harvests in coffee years 2022/23 and 2023/24, estimated to be up by 8.4% and 9.2%, respectively.

In March 2024, exports of all forms of coffee from Mexico & Central America were down 1.9% to 1.78 million bags, as compared with 1.82 million in March 2023. As a result, the cumulative total exports are down 3.0% from October 2023 to March 2024 at 5.74 million bags, as compared with 5.91 million bags for the same period a year ago.

Exports of coffee by forms

Total exports of soluble coffee decreased by 4.8% in March 2024 to 1.06 million bags from 1.11 million bags in March 2023. In the first six months of coffee year 2023/24, a total of 6.16 million bags of soluble coffee were exported, representing an increase of 4.0% from the 5.92 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 8.9% in March 2024, down from 9.5% in the same period a year ago. Brazil is the largest exporter of soluble coffee in March 2024, having shipped 0.35 million bags.

Exports of roasted beans were up 11.5% in March 2024 to 68,467 bags, as compared with 61,396 bags in March 2023. The cumulative total for coffee year 2023/24 to March 2024 was 0.37 million bags, as compared with 0.36 million bags in same period a year ago.

For the full report, visit: icocoffee.org.

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The I-CIP averaged 186.36 US cents/lb in March, a 2.4% increase from February 2024. The I-CIP posted a median value of 185.64 US cents/lb, having fluctuated between 181.39 and 193.26 US cents/lb. The March 2024 I-CIP is above the March 2023 I-CIP by 9.6%, with the 12-month rolling average at 168.82 US cents/lb. The I-CIP grew steadily in March 2024, reaching an 18-month high. Remarkably, the Robustas have reached their highest level since October 1994 when they averaged 169.43 US cents/lb.

The Colombian Milds increased by 0.4% whilst the Other Milds remained stable with a 0.0% change, thereby reaching 210.27 and 208.88 US cents/lb, respectively, in March 2024. The Brazilian Naturals presented a decline of 0.5%, reaching an average of 185.77 US cents/lb. However, the Robustas grew by 8.2% to 165.84 US cents/lb, the highest level in almost 30 years. The Intercontinental Exchange’s (ICE) London market was also a strong driver of the growth, having increased by 4.3% to 148.53 US cents/lb, whilst the New York Futures market contracted by 0.4% to 184.59 US cents/lb.

The Colombian Milds–Other Milds differential expanded from 0.75 to 1.39 US cents/lb. The Colombian Milds–Brazilian Naturals differential grew 7.5% to 24.51 US cents/lb, whilst the Colombian Milds–Robustas differential shrank 21.1% from February to March 2024, averaging 44.43 US cents/lb. Meanwhile, the Other Milds–Brazilian Naturals differential grew 4.9% reaching 23.12 US cents/lb. However, the Other Milds–Robustas and the Brazilian Naturals–Robustas differentials both contracted 22.5% and 40.5%, averaging 43.04 and 19.92 US cents/lb, respectively, in March 2024.

Arbitrage, as measured between the London and New York Futures markets, retracted by 16.0% to 36.06 US cents/lb in March 2024.

Intra-day volatility of the I-CIP increased by 0.3 percentage points to 7.1% between February and March 2024. The Colombian Milds’ and Other Milds’ volatility decreased to 7.5% and 7.7%, respectively. Meanwhile, the Brazilian Naturals’ volatility declined by 0.7 percentage points to 8.1% from February to March 2024. The Robustas presented an average volatility of 8.8% for the month of March. The London Futures market’s volatility also decreased by 0.3 percentage points to 9.4%. Lastly, the New York futures market’s volatility moved in the same direction to that of London, reaching 8.6%, a 0.3 percentage point decline.

The London certified stocks expanded by 22.1% to 0.49 million 60-kg bags. Certified stocks of Arabica coffee reached 0.63 million 60-kg bags, an 80.8% increase since February 2024.

Exports by Coffee Groups – Green Beans
Global green bean exports in February 2024 totalled 10.43 million bags, as compared with 9.52 million bags in the same month of the previous year, up 9.5%. These are the largest February exports on record, beating the previous record set in 2019 of 10.34 million bags. The magnitude of the latest increase in exports of green beans, however, is more a reflection of a favourable base effect and a comparative normalisation of supply. From December 2022 to June 2023, the exports of green beans fell consecutively, with the cumulative total decreasing by 8.2% to 66.92 million bags, the lowest level seen for those same seven months since December 2016 to June 2017.

The cumulative total for coffee year 2023/24 to February is 50.82 million bags, as compared with 45.5 million bags over the same period a year ago, up 11.7%. Brazil was the main origin driving the growth, with exports expanding by 59.9% in February 2024 to 3.38 million bags from 2.11 million bags in February 2023, while among the different groups, the Brazilian Naturals were responsible.

Shipments of the Other Milds increased by 4.2% in February 2024 to 1.91 million bags from 1.83 million bags in the same period last year. Peru, the second largest producer and exporter of the Other Milds, continues to be the main driver of the growth of this group of coffee, with the origin’s exports thereof increasing by 178.6% to 0.18 million bags from 0.06 million bags in February 2023, representing an increase of 65.5% for the year to date (2.27 million bags). Peru’s exports of the Other Milds are on track to be the third biggest on record. As a result, the cumulative volume of total exports of the Other Milds also increased by 6.6% in the first five months of coffee year 2023/24 to 7.72 million bags, versus 7.24 million bags over the same period in 2022/23.

Green bean exports of the Brazilian Naturals increased in February 2024, rising by 36.6% to 3.16 million bags from 2.59 million bags in February 2023. For the first five months of coffee year 2023/24, green bean exports of the Brazilian Naturals amounted to 17.73 million bags, up 16.7% from 15.19 million bags over the same period a year ago. The sharp positive growth rate stems from the 38.4% increase in exports of the Brazilian Naturals from Brazil, the biggest producer and exporter of this group of coffee, which rose to 2.77 million bags in February 2024 from 2.0 million bags February 2023.

Exports of the Colombian Milds increased by 14.7% to 1.12 million bags in February 2024 from 0.98 million bags in February 2023. As a result, exports of the Colombian Milds for the first five months of coffee year 2023/24 are up 13.1% at 5.27 million bags, as compared with 4.65 million bags in the first five months of coffee year 2022/23. The double-digit growths, for both the current month and coffee year to date, are a consequence of the 11.9% weather-driven fall in exports in coffee year 2022/23 and subsequent normalization of supply conditions in Colombia, the largest producer and exporter of the Colombian Milds. For the current month and cumulative total to February 2024, the country’s exports of the Colombian Milds are up 15.4% and 13.2%, respectively.

In contrast to the Arabicas, green bean exports of the Robustas were down 3.7% to 4.24 million bags in February 2024 from 4.4 million bags in February 2023. Despite this, the cumulative total for the first five months of coffee year 2023/24 is up 9.2%, at 20.11 million bags, as compared with 18.41 million bags in the first five months of coffee year 2022/23. The main driver of February’s Robustas decrease was Vietnam, which shipped 2.54 million bags as compared with 3.17 million bags in February 2023, down 19.9%. Indonesia’s Robusta exports were also down 48.1%, with a net fall of 0.13 million bags.

Exports by Regions – All Forms of Coffee
Exports of all forms of coffee from Asia & Oceania decreased by 17.0% to 3.97 million bags in February 2024. The main source of the double-digit downturn is Vietnam, which saw its exports fall by 19.7% to 2.73 million bags in February 2024 from 3.4 million bags in February 2023. The size of the fall is the result of an unfavourable base effect, with the February 2023 export volume 1.04 million bags larger than the February average of the past six years (2.36 million bags).

On balance, Vietnam’s February 2024 export volume should be deemed at a healthy level, benefitting from high and rising local prices (the local green bean price increased to an average 80,000 VND/kg on 15 February 2024, from 61,000 VND/kg in the middle of November 2023) and triggering the release of stocks as farmers took advantage. Moreover, the Tet (lunar new year, which fell on 10 February 2024) would have brought additional supply to the market as farmers sought extra income for the most important social calendar date for the country and its people.

In February 2024, South America’s exports of all forms of coffee increased by 41.7% to 4.93 million bags. The source of the strong positive growth is Brazil, which saw its exports increase by 51.0% in February 2024 to 3.64 million bags – the second highest February exports on record for the origin. The overall recovery of Brazil’s export volume remains a reaction to the 31.8% fall in the February 2023 exports 2.41 million bags, the lowest February exports since 2.23 million bags in 2013. In coffee year 2022/23, Brazil’s exports declined by 7.9% to 36.5 million bags, the lowest level since the 32.69 million bags shipped in coffee year 2017/18. To date, Brazil’s exports are up 24.6% to 12.84 million bags.

Exports of all forms of coffee from Africa increased by 14.6% to 0.98 million bags in February 2024 from 0.86 million bags in February 2023. However, the cumulative total of 4.99 million bags for the first five months of coffee year 2023/24 remains down 2.5% as compared with the 5.1 million bags shipped in coffee year 2022/23. Ethiopia was the driving force behind the region’s increased exports in February 2024, with its own exports having increased by 103.9% to 0.2 million bags from 0.1 million bags in February 2023. The size of the rebound is due to a favourable base effect and a comparative normalization of market circumstances.

Contract disputes arising from a mismatch between local purchasing prices and global market prices had previously affected the volume of exports, leading February 2023’s shipment to be the lowest since 2010.

In February 2024, exports of all forms of coffee from Mexico & Central America were down 2.7% to 1.45 million bags, as compared with 1.49 million in February 2023. As a result, the cumulative total exports are down 3.9% from October 2023 to February 2024 at 3.94 million bags, as compared with 4.1 million bags for the same period a year ago. Costa Rica, El Salvador and Guatemala were the main origins behind the region’s negative growth, with exports down 24.5%, 40.3% and 5.7%, respectively, and a combined net loss of 58,812 bags. Partly counterbalancing these origins were Honduras and Mexico, with a combined net export gain of 24,756 bags in February, up 2.0% and 6.5%, respectively.

Exports of Coffee by Forms
Total exports of soluble coffee decreased by 18.2% in February 2024 to 0.85 million bags from 1.04 million bags in February 2023. In the first five months of coffee year 2023/24, a total of 5.05 million bags of soluble coffee were exported, representing an increase of 5.0% from the 4.81 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 9.0% in February 2024, down from 9.5% in the same period a year ago. Brazil is the largest exporter of soluble coffee in February 2024, having shipped 0.26 million bags.

Exports of roasted beans were up 14.1% in February 2024 to 56,425 bags, as compared with 49,439 bags in February 2023. The cumulative total for coffee year 2023/24 to February 2024 was 0.32 million bags, as compared with 0.3 million bags in same period a year ago.

For the full report, visit: icocoffee.org.

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Ethiopia, Uganda, Kenya, and Tanzania are some of Africa’s coffee-producing countries where organic coffee farming is gaining traction with support from private companies, sustainability, and certification organisations.

Despite organic coffee farming in Africa being at its infancy due to perceived high costs involved such as paying for integrated pest management, hand weeding, pruning of shade trees, acquisition of organic fertilisers and certification fees, more organic coffee projects are emerging, especially in East Africa as farmers realise the high premium prices fetched from coffee grown by use of compost, manure and coffee pulp instead of synthetic chemicals such as pesticides, herbicides and artificial fertilisers.

For instance, German company, Kaffee Pura, is partnering with Enku, an Ethiopian firm dedicated to facilitating farmers’ access to the international market, to support a sustainable training hub to empower at least 100 local coffee farmers to expand their organic coffee cultivation.

The training is meant to qualify at least a third of them with the prestigious ECOCERT certification over the project’s 30-month period. ECOCERT, a France-based organic certification organisation, conducts inspections in over 80 countries, making it one of the largest operations of its kind in the world.

The project, suPPPort, has already secured a grant of almost €164,000 to boost Ethiopian organic coffee farming. The triple ‘P’ in suPPPort stands for the three pillars of sustainability: ‘People, Planet, Profit’, in what Kaffee Pura says ‘represents what drives our business core values.’

Ethiopia’s coffee is largely produced by small-scale farmers using traditional farming systems that are considered organic.

Organic, but not always certified

“Coffee farmers and traders claim that their coffee is organic by default, however, most coffee produced and traded in Ethiopia is not certified by an international organic commodity certifying agency due to the prohibitive cost of certification,” said a recent report by the US Department of Agriculture (USDA).

Although the USDA says Ethiopia’s coffee enjoys a high demand in the international market due to its special aroma and distinct flavour, “the cost of certification is not affordable for [smallholder] farmers.”

Africa, which hosts 29 coffee-producing countries with an estimated output of 1.2 million tonnes of coffee as of 2018, has more than 361,600 hectares that have either been converted or are under conversion to organic coffee land.

FiBL Group, Eastern Africa region has taken the lead in organic coffee production with Ethiopia committing at least 161,113 hectares to organic Arabica coffee production with an estimated output of 51,400 tonnes of Africa’s total organic production of 59,000 tonnes in 2018.

Actual production volume of organic coffee is expected to be higher, partly because of the missing data from Uganda,” reported FiBL, which includes the Research Institute of Organic Agriculture, comprising state-independent civil society institutions or non-profit enterprises operating as foundations or associations in various European countries.

Although nearly 50 percent of Ethiopia’s total coffee production goes to meet domestic consumption demand, the organic certified coffee goes to export markets where they fetch higher prices compared to conventional Arabica grown variety.

In fact, it is estimated up to 90 percent of Ethiopia’s coffee is organically grown, with the majority of coffee farmers using organic fertiliser, but only a few coffee producers have any certification due to challenges in traceability and limited support systems in entrenching the certification process.

This lack of certification means organic coffee growers have no access to premium paying international markets, hence their product is priced as the one conventionally produced.

Incentives to grow organic coffee

In April 2023, Fairtrade International and Fairtrade America announced a raise in the minimum price for Fairtrade-certified coffees, the first such an increase since 2011.

A brief by Sucafina, a sustainable farm to roaster coffee company, said the current minimum price is USD $1.40 that increases to $1.60 after adding the Fairtrade premium of $0.20. But if the coffee is organic, the seller gets the same price plus the organic premium of $0.30 resulting in a total of $1.90.

The prices have, however, been increased by 28.5 percent, effective 1 August 2023 (for contracts signed by that date) to $1.80, which iswhen the Fairtrade premium of $0.20 is added, rising to $2.00. But, if the coffee is organic, $0.40 will be added resulting in a total of $2.40.

“The momentum behind raising their minimum price is rising costs of production and runaway inflationary pressures,” Sucafina said.

Previous reports indicate the European Union bought an estimated $130,000 tonnes of organic coffee from Africa while the US, another major organic coffee consumer, bought an estimated 91,000 tonnes of the commodity.

The high demand for organic coffee in EU markets is “particularly driven by sustainability concerns of consumers and European industry players, as well as a growing interest in healthy living by consumers,” according to a report by the Centre for the Promotion of Imports (CBI).

“Although the European market for organic coffee is still considered a niche market, demand is expected to grow strongly in the near future,” the CBI report stated.

Private companies want eco-friendly farm practices

For Kenya, the increasing international demand for certified organic coffee has attracted the participation of private companies and nongovernmental organisations keen on promoting environmentally friendly farm practices such as shade-grown cultivation that prioritises preservation of biodiversity and conservation of water resources.

For instance, the Denmark’s Danida Green Business Partnership (DGBP), a challenge fund designed to promote market-driven green transition and inclusive economic growth in developing countries, is working with Solidaridad and local coffee companies in promoting traceable organic coffee in Kenya
through training of farmers on various areas such as how to make their own organic fertiliser using readily available materials, effective weed control, canopy management, pest and disease control and coffee nutrition.

The TRACE Kenya project, which supports the country’s economic growth as well environmental conservation, brings together at least 15,000 smallholder organic coffee farmers from the three counties of Kericho, Nandi and Bungoma.

At least 45,000 of the farmers are women and 1,500 are youth that are growing certified organic coffee destined for the export market, particularly Europe and USA.

“Our approach includes capacity building initiatives and interactive training on innovative organic coffee practices, facilitating access to high-yielding and disease-resistant coffee varieties and eco-friendly inputs, and promoting eco-friendly technologies,” stated a project brief by the DGBP.

“The project strives to create an inclusive, market-driven and sustainable coffee sub-sector that generates increased income opportunities and creates decent jobs for many along the value chain,” DGBP’s brief added.

Africa Coffee Roasters, a Kenyan partner in the project, said the TRACE project is “about improving livelihoods of coffee farmers.”

“We do not have organic certified coffee from Kenya, but we have a number of farmers who claim their coffee is farmed organically but we do not have third-party certification for coffee from Kenya,” said Joan Kithika, the sustainability and compliance manager at Africa Coffee Roasters.

TRACE Kenya project, Kithika said, aims at increasing third-party certification for organically farmed Kenyan coffee. She said there is demand for certified organic coffee globally as is the drive to address climate change dynamics in the coffee industry

“TRACE Kenya focuses on producing the first organic certified coffee in Kenya. It is about making sustainable coffee trade between farmers and the market in Europe,” she added.

The TRACE Kenya project is an example of an emerging trend within Africa’s specialty coffee market characterised by “direct trade, close contact between farmers and buyers, traceability systems and price premiums based on coffee bean quality,” according to CBI.

In landlocked Uganda, Africa’s largest coffee exporter, a leading coffee producer, Ankole Coffee Producers Cooperative Union (ACPCU), has shifted to 100 percent organic, Fairtrade, and high-quality coffees.

“The combination of Fairtrade, organic and high-quality coffee sets this cooperative apart from their competitors,” stated the CBI report.

Additionally, the cooperative owns its own sorting unit, cupping lab and warehouse, which allows them to have control over their coffees and to be a reliable exporting partner to their clients, the report added. UK-based alternative trading organisation, Café Direct, is one of the leading buyers of ACPCU’s organic coffee.

ACPCU focuses on organic Robusta coffee, a hardier species of coffee, which, according to the general manager, John Nuwagaba, was a niche export market that is under-explored. Securing of Fairtrade certification for all ACPCU members “increased their access to certain markets and transformed the lives of the farmers,” he said.

• Shem Oirere is a freelance business journalist based in Nairobi, Kenya. He has spent more than 25 years covering various sectors of Africa’s economy including the region’s
  agribusiness. He holds BA in International Relations and Diplomacy from the University of South Africa and earned a higher degree in journalism from the London School of Journalism and is also a member of the Association of Business Executives (ABE).

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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. 

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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.

The post Global green coffee exports drop 5.5% for CY 2022/23 appeared first on Tea & Coffee Trade Journal.

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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