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Coffee Market Report 8th to 12th February 2016

COFFEE MARKET NEWS Week Ending: 12th Feb 2016




11th Feb


























UCC Coffee UK & Ireland has refreshed its Lyons coffee bag range in response to growing consumer demand for high-quality coffee. The range of bags features a new look with vintage-inspired packs and blend strength guides to help shoppers select a coffee that suits their tastes.


Arabica prices lost value mid-week due to fund liquidation and spec selling. However, it rose again on Friday, buoyed by reports that Brazil’s Arabica exports in January were 2.4% lower than last year.


Despite a solid flow of origin pressure from Vietnam and India, Robusta prices increased on Friday due to spec buying from investors as a result of global equities showing signs of slowing down because of rising European stocks and oil prices.



Eurozone economic data is negative and there are many reasons to sell the Euro and very few reasons to buy it. However, the Euro is holding its own to some degree. Having rallied to €1.45 in the middle of 2015, the Sterling – Euro exchange rate slumped back to €1.27 towards the end of last week.


The Sterling-Dollar rate remained around the 1.45 mark all week. The GBP-USD rate is in a narrowing band and sooner or later the market will break out of this range. Until it does, use $1.46 as your upper target and $1.45 as the lower range and you won’t go too far wrong.


Colombia: Colombia’s export of lower grades has begun! As we mentioned a few weeks ago, Colombia has relaxed export restrictions on undergrads prompted by the effects of El Niño. To date, the FNC has sold 79,000 bags of this type of coffee.

Indonesia: El Niño is here for a while.  Indonesia is being heavily affected by El Niño, according to recent weather forecasts. Because of weather conditions, production levels are expected to be reduced, especially in the lowlands, with the harvesting now expected to begin in June, two months delayed from its usual harvest in April. Additionally, there remains a high chance of a transition to La Niña beginning in autumn, which could impact the Indonesia crop by 2.4%. Indonesia has a target to boost coffee export value by 10% this year to 1.1 billion US dollars, amid growing worldwide demand, say local business reports citing a senior official at the trade ministry. Expectations are that the US will remain the biggest market for Indonesian coffee, and projections are that the US could account for 20% of the target value.

Kenya: New coffee growing areas? Kenya’s government is planning to expand coffee cultivation, with the increase earmarked for the non-traditional growing regions of North Rift, Nyanza and Western Kenya, according to local business sources. The target is for new growing areas given that traditional regions, mostly in Mount Kenya, face the threat of encroachment of real estates and the emergence of new economic ventures such as horticulture farming. Land occupied by coffee farming has dropped from 170,000 hectares in the early 1990s to 109,795 hectares in 2010/11. Agriculture Principal Secretary Dr Richard Lesiyampe has commented that, “The institute through the European Union funded initiative — Coffee Productivity Project — is expanding the area under coffee production in potential areas by enhancing access to improved coffee planting materials and providing technical information. Notably, the project has granted more than Sh75 million to 28 coffee nursery operators in 28 counties so that they can enhance capacity to propagate coffee seedlings nearer the farmers”.

Tanzania: According to local reports, the Tanzania Coffee Board has estimated that the 2015-2016 coffee crop, will rebound by 50% compared to the previous season. Production should total 62,000 metric tons, up from the 41,200 tons produced in the previous season. The increase in production will be due to favourable weather condition and the natural 2 year cycle of the plants

In other news…

Dryness remains a threat to world output. Dryness fears may have receded for Brazil’s Arabica coffee-growing areas, but the hangover from drought damage may hurt Robusta prospects into 2017, and weather fears have grown in other Arabica producing countries too. Espirito Santo, the largest area Robusta producing area is still experiencing a major drought. Ethiopia is suffering a very strong drought and while this is mainly hitting other crops, coffee areas are still suffering. Colombia is also suffering from drought.

Awesome Instant coffee? Kalle Freese, Finnish Barista Champion, has moved to San Francisco to start an exciting new company: Sudden Coffee. He’s taking delicious specialty coffee and turning it “Soluble” – can’t wait to try a cup of that!