May was very much a month of Bank Holidays here in the UK, with King Charles’ coronation topping off the two we already get. While the Bank of England may have been having three-day weekends, our friends across the pond were having anything but a holiday as the deadline for raising the national debt ceiling loomed
Crisis, as per usual, was narrowly avoided with the bill raising the borrowing limit signed into law mere days before the US would have had to default on its debts. Had it not gone through havoc would have truly been wrecked on the US economy, which in turn would affect international markets too. The US dollar index fluctuated under the strain but has rallied recently with news of a deal. At time of writing the GBP:USD exchange rate sits comfortably at 1.24 – higher than the YTD average of 1.2282 but a fall from the lofty highs of 1.2639 on the 6th of May. Looking further afield, join us as we dive into the coffee origin focus for Rwanda, Brazil, and Colombia.
Coffee Origin Focus
Historically in Rwanda all arabica that’s been grown has been Red Bourbon. This is very unusual for a whole country to be predominantly a single varietal. It has come about due to NAEB (the National Agricultural Export Board in Rwanda) having a high level of control over any agricultural products grown in the country. They have previously only supplied farmers and cooperatives with Red Bourbon seedlings, and this consistency has given Rwandan coffee its distinctive cup profile and reputation of good quality. However, NAEB have recently loosened their strictness on varietals. Producers still get their seedlings from NAEB, but recently they have begun experimenting with different varietals to understand how well they can grow in Rwanda.
Our partners Kinini Washing Station have been experimenting with another Bourbon varietal, RABC15, which is genetically modified to be resistant to rust and coffee borer, and produces cherries after 18 months. It starts producing cherries within 2-3 years rather than 3-4. This harvest will be the first crop of this varietal for Kinini, but it will be interesting to see how this coffee will cup. They have also planted some Geisha seedlings for the first time last year, these will not produce cherries for some time yet, but they are very excited about the results. These new varietals have only been planted on a few farms, they chose to work with some on their best and most careful farmers for this experiment to try and get the most out of it. Depending on the results they see they will start to roll out these new varietals across the different farms and cooperatives they work with. Our partners at Twongere Kawa Coko have been similarly experimenting with varietals. Farms are, like the rest of Rwanda, almost exclusively Red Boubon, however they have done some experiments with Yellow Catuai to see how well it grows in the country. They have found that whilst it does grow well, the trees are shorter than Bourbon and produce fewer cherries. Bourbon can produce 5-7kg of cherries per tree twice a year, which is an impressive amount, but they found the Yellow Catuai produces less than 5kg.
At the beginning of May we saw reports that the coffee exports for April were down 12% month-on-month, with a 20% decrease for the Jan-Apr period against last year. Moving into the current harvest things are looking better as we continue to avoid any forecasted frosts and the harvest is keeping pace with estimates so far. Heavy rains in South Minas have proved untimely for the drying beds, however, dry conditions elsewhere have been productive for the harvest. Brazilian diffs have been rather volatile but have seemed to drop in the last few weeks with decreased demand, it remains to be seen where these will go as the harvest continues and we start seeing the first shipments leave Brazil.
Good coffee blooming has been reported in the areas of Sierra Nevada de Santa Marta, leading to estimates of a 15 – 20% increase in yield over last year. It’s not all good news though as a mixture of drought in some areas and excessive rainfall linked to the La Niña weather pattern in others led many to reduce their estimates for Colombian production by between 5 – 10%. That being said, Colombian differentials have fallen in recent months after reaching lofty highs in 2022, we’ll be keeping a close eye on pricing in the coming months as 23/24 estimates refine themselves in light of a possible switch from the La Niña weather pattern to El Niño in the next year.