function gtm_code() { ?>
+44 (0)20 7202 2620

Coffee Market Report 1st to 5th February 2016

COFFEE MARKET NEWS Week Ending: 05th Feb 2016




04th Feb
























Fitch gives Starbucks an ‘A’ rating. Fitch Ratings has assigned an ‘A’ rating to Starbucks Corporation’s (Starbucks; NASDAQ: SBUX) proposed $500 million aggregate issuance of fixed-rate five-year senior unsecured notes. At Dec. 27, 2015, Starbucks had approximately $2.3 billion of total debt. A full list of Starbucks’ ratings is provided at the end of this release.


Arabica finished higher 4 days in a row, until closing on Friday 28 points lower than Thursday. It did however still close the week 26.5 points higher than its opening on Monday. Continued worries about the impact of El Nino on Colombia’s crop was one the main drivers behind the general increase.


The Robusta market rallied over 52 US $ over the course of the week as continued dollar weakness drew the speculative community back as buyers.



On Thursday, the Bank of England (BoE) kept UK interest rates on hold at 0.5%, much in line with what the market was expecting. The main story of the day however, was that Ian McCafferty, the only dissenter, changed his stance and voted with the majority (9 people) in favour of keeping rates on hold. This further strengthened the Euro which has remained strong, in spite of the release of poor industrial data from Germany on Friday.


There was a muted reaction to the BoE’s decision on Thursday, the Pound did lose out slightly to the US Dollar, but it was softened by the US jobless claims. They were at 285,000 for January, which even though was 5,000 above expectation, remains 15,000 short of what is considered indicative of a strong labour market.



Cooxupe, Brazil’s biggest coffee cooperative, is set to produce 6 Million bags in 2016. Carlos Paulino de Costa, President of Cooxupe, tells CoffeeNetwork in an interview that the cooperative should produce 6 million bags in calendar year 2016, up from the 5.1 million bags produced in the previous year. “This increase is due to improvements in productivity and also due to the opening of 5 new offices,” he explains. Brazil’s high temperatures are also due to cause early harvesting of the 2016-2017 coffee crop.   January had well above average rains and soil moisture remains high. Despite limited rainfall over the weekend, “a period of low rainfall right now will not cause any damage/loss to crops. On the contrary, the clearer skies will allow the development of crops as well as treatments.”


Colombia braces itself for a delayed rainy season. After a record crop in 2015 of 14.2 million bags, Colombia’s 2016 crop is being threatened by high temperatures and a lack of rainfall throughout the key coffee growing regions. The impact will have very different effects among the various growing regions. “The impact will be different regionally,” explains Carlos Ignacio Rojas Gaitán, President and CEO of The Association of Coffee Exporters of Colombia (ASOEXPORT) in an interview with CoffeeNetwork. “(this type of weather) can help the quality of the beans that are already formed. The biological ‘logic’ is that if the plant feels strained, with few leaves, all the energy goes to the cherry. However, if the sun is too bright, with too much dryness during the period where beans are maturing, we could see ‘empty cherries’ or small beans. Hopefully, and overall in the country, the impact will be minor, with some areas being benefited while others hurt.” The second crop, or fly crop, could be most negatively impacted. This crop is generally harvested from April-June and is deep into the development stages at this point.


Harvest is 60-80% complete reports state. However a cold front arriving over the coming days poses potential frost implications in the higher altitude coffees of Huehuetenango, and expected rains could hinder the drying capabilities too. Demand from Mexican buyers has abated in recent weeks, which created supply tension and price instability recently.


Ugandan producers have agreed a deal to export green graded top quality coffee to South Korea, say local business reports. South Korea-based Caffebene, a global coffee house, has agreed to buy from members of the National Union of Coffee Agribusinesses and Farm Enterprises (NUCAFE), an umbrella organisation that promotes value addition and teamwork among coffee farmers. According to a team business manager at Caffebene, Uganda’s coffee scored highly on quality after research and tasting by a team.

In other news…

The World Cezve/Ibrik Championship has new competition rules and regulations and is due to take place on 21-25 February in Dubai, UAE.

Colonna coffee have confirmed they will be releasing pods this year. Find more about their position on this from a blog post in December.