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Coffee Market report 16th February 2015 to 20th February 2015

COFFEE MARKET NEWS Week Ending: 20th February 2015

16th Feb

17th Feb

18th Feb

19th Feb

20th Feb

























What a week it has been on the New York Terminal market. With Monday closed for Presidents day, Carnival week, Tet, Options Expiry and first notice day (FND) for Arabica it has certainly been an active week. Tuesday opened after the long weekend, and after a brief uptick saw prices crumble over 10cts. Follow through selling throughout the rest of the week pushed prices another 7cts lower to make yearly lows! Even with technically bullish reports circulating (Volcafe reaffirming a second year in a row of production deficit) these do little to lift the spirits of a heavily sold market. Will next week’s new front month (we are now trading May) show any sign of encouragement?

A full week of trading or London, and it once again felt the impact of heavy selling flowing over from New York, shaving $100 / mt of the value this week. It seems commodities are having a hard time of it lately.

GBP / USD enjoyed a relatively stable week, with the pound seeing good support thanks to improved economic figures, and reducing unemployment numbers.

East African Special

Ethiopia – new crop shipments are beginning, albeit fairly slowly. Prices remain very unattractive to buyers, especially from Unions who have already paid famers historically high prices for their cherry based on (mis-information) provided by the agricultural ministry. The New York terminal markets may continue to slide, but certified coffees from the co operative unions remain firm, resulting in ever increasing prices (differentially speaking) Reports surfacing that some containers have already been shipped on time!  Wonders never cease.

Kenya – Main Crop auctions are in full swing, with circa 20,000+ bags each week offered for sale in the Nairobi Coffee Exchange. Quality for this time of year is as expected – full of bright juicy blackcurrant flavours, and bold green / blue hue beans – just what we want Kenya to be. However, pricing remains firm – with premiums for AA in some cases 100cts higher than their AB sister lots! I was always led to believe size doesn’t matter – How wrong I was!

Uganda – After a difficult season last year, things should be looking up in Uganda this year. Internal competition remains fierce, and strong exports to Sudan adds constant weight to pricing. The prevalence of washing stations increases year on year, especially on the Eastern border with Kenya, in the Mt Elgon region, which can produce some very exciting fully washed coffees.

Tanzania – Southern Crop has finished for the season, and the North is not far behind. Exporters stocking up on what decent coffees remain to continue their export operations through to May, and then the seasonal break will ensue – resuming in October. New Crop harvest is expected to be good for the upcoming season, and pickings for the Arabicas will start around May – continuing until November / December in some of the Northern Highland estates. The Northern Estates are all looking forward to a healthy crop this year after a good flowering at the end of last year and favourable rains.

Rwanda – A good crop is expected from this small African nation this year both in terms of size and quality. Substantial investment in recent years, from the public and private sector has helped to boost the quality in Rwanda exports – even the infamous potato flavour that has plagued Rwanda for years seems to have all but disappeared from our cupping tables.

Burundi – Whilst producing some excellent coffees each year; Burundi still struggles with the large swings in the on / off cycle of production – last year seeing a 50% reduction in output. This tends to be a clear demonstration of the type of production occurring in the country, as trees are left to produce at their own pace. Agro-inputs, agronomy advice and solid good agricultural practices would help narrow this cycle of boom and bust, but unfortunately Burundi is low on many investors’ priorities, and it could be a number of years before we see the end to this painful cycle.

DRC – The dark horse of ‘East Africa’. Whilst not exactly part of East Africa geographically, the Democratic Republic of Congo certainly shares many characteristics, especially considering the proximity to Rwanda of its coffee growing zones along the shores of Lake Kivu. Once regarded as too unstable to source coffee from, recent years have demonstrated that coffee coming from DRC can be reliable both in terms of its solid quality, and timely shipment. No longer is it the undervalued ‘bargain’ of East Africa, but a fledgling origin, standing on its own, proud to be one of the few East African origins that offer Fairtrade Organics! Bravo Congo.