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Coffee News - 27th January 2023

Welcome to our weekly round-up on the happenings in coffee from around the globe.

 

Coffee Prices Continue To Climb

Coffee prices continued to climb, with arabica futures rising by around 10% on the week’s open. Arabica prices climbed to a 3-week high, with the March KCH23 contract closing at 167.15 USC/lb in New York overnight. Robusta prices achieved a 3-month high in London overnight, with the March RMH23 contract closing at 1,9994 USD/ton.

The rising prices are again being driven by market speculation as US economic news showed a greater than expected rise in GDP for the 4th quarter, easing recessions concerns. Arabica also found support from the Brazilian real after it rallied to a 2 ½-month high, discouraging export selling from exporters. Excessive short positions held by traders could also fuel short covering pressures and trigger a further increase in prices in the short-term.

Robusta prices continued to find support after Volcafe forecast a deficit of 5.6 million bags as Indonesia production is predicted to fall to the lowest level in 10-years due to excessive rains across the country’s growing regions.



Soil Moisture High In Brazil's Coffee Areas

According to global market data provider Refinitiv, coffee production areas in Brazil are experiencing the highest levels of soil moisture of the last 7-years. As a result, coffee trees are expected to produce larger beans, but it is unlikely there will be an increase in fruit yield as the flowering phase for the current crop has already passed.

Data from the coffee regions of Minas Gerais and Sao Paolo shows the extra humidity coming at a good time for the 2023 crop, when fruits and beans are developing. Agronomists say that the coffee trees are looking good, and the crop is healthy, but still far below the record volumes of the 2020 harvest.



Fairtrade Risk Map Published

Fairtrade International has published the Fairtrade Risk Map, an interactive online tool to communicate the human rights and environmental risks inherent in global commodity supply chains. The map focuses on banana, cocoa, honey, grapes and coffee production currently and is scoped to introduce data on a further 17 commodity sectors as it is collected.

Data for each country covers 26 different indicators, covering a broad range of subjects such as gender rights, modern slavery, standard of living, and climate change issues.

The project was co-funded by the European Union and draws on data from a number of international sources such as the United Nations Development Programme (UNDP), the International Trade Union Centre (ITUS), and the World Bank.

The organisation said the map was the product of “our ongoing risk and impact assessment work — a collaborative effort with input from farmer cooperatives, workers and plantation management, Fairtrade staff from six continents, and external experts.”

The map can be found at the link here.


Unrest Continues In Peru

7-weeks after the removal of former President Pedro Castillo, protests are continuing having spread from the country’s south to the capital Lima where they have been met with heavy resistance from police and the armed forces.

Protestors are calling for the resignation of incumbent President Dina Boluarte as well as new elections and revisions to the constitution to address rising levels of inequality in the country, especially amongst indigenous and rural populations.

Protestors have been met with increasing repression, with over 50 protestors having been reported as being killed so far. The country’s ombudsman has confirmed that the majority of these deaths were the responsibility of security forces.

Peru’s next general election has already been brought forward by 2-years to April and President Boluarte has already indicated she will step down before then, despite a national disapproval rating of 71%.


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