What’s the coffee situation in August 2021?

The coffee sector keeps evolving and we like keeping an eye on how things are going

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We at ArtOn Café always follow the coffee sector and everything that is connected with it. We are interested in coffee prices – and in fact we have just published an excerpt of the ICO Coffee Market Report of July – but also in weather conditions and climate change (make sure you read our article about the situation in Brazil, the one about the effects of climate change on Colombia and also the one about carbon neutrality). Let’s now check how things are going generally.

What’s the weather like?

Brazil was severely hit by the frost season, which affected the coffee plantations and therefore the coffee prices. However, the climatological frost risk-period in Brazil usually ends at the end of August. This year the cold season was particularly extreme and it will probably be remembered for a long time by all actors involved in the coffee industry (Oddo, 2021).

On the other hand, the rainy season is about to start and it will be of great importance for the coffee crop of 2022/23. For the time being, Brazil still has some weeks before the beginning of the rainy season and the rains that will start the main flowering and fixation period (Oddo, 2021).

Furthermore, it should be underlined that we are at the beginning of the Atlantic hurricane season (Oddo, 2021), which might also have a huge effect on coffee plantations.

Make sure you read the entire Weather report published by Sucafina.

How much is it?

 In July 2021 coffee prices continued to increase, and Arabica coffee reached its highest levels since November 2014. Moreover, Brazil’s severe frost affected the coffee market, which increased significantly.

“The monthly average of the ICO composite indicator reached 152.24 US cents/lb in July 2021, its highest level since 162.17 US cents/lb recorded in November 2014. Compared with the monthly average in October 2020, the beginning of the current coffee year, the level reached in July 2021 represents an increase of 43.8%. Prices of all four groups of coffee have recorded substantial increases. This upward trend of coffee prices over the first 10 months of coffee year 2020/21 seems to confirm a net recovery from the low-price levels that have dominated the world market since coffee year 2017/18. The price performance has also been driven by brighter prospects for demand, as pandemic-related restriction measures are being removed in major consuming markets and the development of vaccination programmes is enabling a progressive return to normal economic activity” (ICO, 2021b).

Visit ICO’s website and read more about their coffee market report of July.

The following is an excerpt of the market report published by Sucafina:

10th August 2021

This week, coffee prices consolidated around 175 cents/lb, falling 3.55 cents from Friday to Friday to close at 176 basis the September contract. As most of Europe heads into peak vacation season, the coffee market is starting to see an extreme amount of sluggishness given the craziness of the last month of Brazil frosts. With the weather stabilized at the moment, the next major point of concern will be the return of rains in Brazil, which typically arrive in September.

A pause in Brazil allows us to explore issues in other origins, such as Honduras, the second largest washed Arabica producer after Colombia. Honduras’s upcoming crop has been hampered by 2 hurricanes and an excessively rainy season. As a result, the outlook for the coming crop has shifted from positive to negative. This further affects an already tight supply and demand situation for Arabica coffee in the next year. Therefore, quiet periods like this are likely to become somewhat abnormal in the coming months, and our expectation is for volatility and prices to continue to increase (Byzov, 2021).

Coffee plantation in Brazil

Trade statistics of June 2021

The following statistics are based on ICO’s data (ICO, 2021b):

  • World coffee exports: 11.20 million bags in June 2021, compared with 10.76 million in June 2020
  • Exports in the first 9 months of coffee year 2020/21 (Oct/20 to June/21) have increased by 2.5% to 98.55 million bags compared to 96.15 million bags in the same period in 2019/20
  • In the twelve months ending June 2021, exports of Arabica totalled 82.80 million bags compared to 79.58 million bags last year; whereas Robusta exports amounted to 46.93 million bags compared to 49.43 million bags.

Check facts and figures on the global coffee trade on ICO’s website

Origin report

Sucafina publishes weekly origin reports, which help us to follow global and local changes and variations.

Read with us Sucafina’s Origin report published on the 9th of August 2021 (Sucafina, 2021).

What’s next?

The world of coffee is constantly evolving and reacting to the pandemic that has severely affected the entire coffee industry.

New events concerning coffee are on our bucket list for the next few weeks. One of these is the Caffè Culture Show, which is taking place on the 2nd and 3rd of September at the Business Design Centre in London.

The show attracts trade industry professionals and represents a great opportunity for exhibitors to expand their business and for visitors to meet hundreds of suppliers and to see innovative new products (Caffè Culture Show, 2021).

At this year’s event, DRWakefield is sponsoring the Roaster’s Forum, with a jam-packed day of talks, panel discussions and tastings on Thursday the 2nd of September (DRWakefield, 2021).

Are you ready for this exciting trade show that is catching us at the end of the month?

Bibliography

Byzov, I. (2021). Market Report. Retrieved from https://sucafina.com/emea/lp/market-report?utm_source=Sucafina+Specialty&utm_campaign=dce88326ee-EMAIL_CAMPAIGN_2021_08_04_01_58&utm_medium=email&utm_term=0_a8eea20eeb-dce88326ee-385061254

Caffè Culture Show. (2021). Welcome to Caffè Culture Show. Retrieved August 12, 2021, from https://www.caffecultureshow.com/

DRWakefield. (2021). Caffè Culture Show 2021. Retrieved August 12, 2021, from https://drwakefield.com/news-and-views/caffe-culture-show-2021/?utm_source=Newsletter+Mailing+List+May+2018&utm_campaign=0c0c2eafeb-EMAIL_CAMPAIGN_2020_01_22_10_01_COPY_01&utm_medium=email&utm_term=0_d2aa19fb26-0c0c2eafeb-434305845

ICO. (2021a). ICO Indicator Prices. Retrieved from https://ico.org/prices/pr-prices.pdf

ICO. (2021b). What’s New – Prices for Arabica coffee in July 2021 surged to the highest levels since November 2014 as … Retrieved August 12, 2021, from https://ico.org/

Oddo, G. (2021). Weather Report with Greg Oddo. Retrieved from https://sucafina.com/emea/lp/weather-report?utm_source=Sucafina+Specialty&utm_campaign=dce88326ee-EMAIL_CAMPAIGN_2021_08_04_01_58&utm_medium=email&utm_term=0_a8eea20eeb-dce88326ee-385061254

Sucafina. (2021). Origin Report – Week 31. Retrieved from https://assets-eu-01.kc-usercontent.com/4192440f-b944-0135-c768-e05d36ed3e93/57bc2dce-6d83-49ec-8ce5-e0c212dcf2fb/Orign Report Week 31.pdf

Picture credits: if not otherwise specified, the pictures were purchased by the ArtOn Café director.

CUP OF EXCELLENCE LATEST NEWS

The Ethiopian Sidama region offers great-quality coffee. Taiwan has been put on the map as a relevant coffee-consuming country. Best of Yemen Samples available until Tuesday, August 17th

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ETHIOPIA 2021

Among coffee-producing countries, Ethiopia holds near-legendary status not only because it’s the “birthplace” of Arabica coffee, but also because it is simply unlike every other place in the coffee world. Unlike the vast majority of coffee-growing countries, the plant was not introduced as a cash crop through colonization. Instead, growing, processing, and drinking coffee is part of the everyday way of life, and has been for centuries since the trees were discovered growing wild in forests and eventually cultivated for household use and commercial sale.

Kirkland signature organic Ethiopia Jimma reign light roast 2 lb whole bean coffee

Located in the south of Ethiopia, the Sidama region offers great-quality coffee. Sidama’s coffees have lemon-citric tones with bright acidity. Coffees from here are often classified as “Sidamo,” but the region itself is known more correctly as Sidama.

New York coffee roaster Coffee Bros, in partnership with the Alliance for Coffee Excellence (ACE), is launching a non-fungible token (NFT) project alongside the 2021 Ethiopia Cup of Excellence (CoE) auction (Global Coffee Report, 2021).

The Coffee Bros NFT program is the first of its kind in the coffee industry. The goal is to create an experience that will last forever with award-winning coffees, all the while giving the deserved recognition back to the producer and supporting organizations that look to improve the livelihoods of those producers (Coffee Bros, 2021).

About NFTs

A non-fungible token (NFT) is a unit of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique and therefore not interchangeable. NFTs can be used to represent items such as photos, videos, audio, and other types of digital files. (Wikipedia, 2021).

The project will see 50 to 100 digital artworks, or NFTs, created for each CoE auction. Each digital artwork will feature the designated coffee producer for that auction, their rank number in the auction, the coffee variety, and its cupping score. This is designed to highlight the producer and their coffee (Global Coffee Report, 2021).

Comics styled yellow suit

In addition to owning the NFT, the first 50 buyers will also receive a roasted eight-ounce bag of coffee from that lot (Global Coffee Report, 2021).

Since 1999, the Cup of Excellence (COE) program has set the standard for the increased premiums that farmers have received for their exemplary coffees. It continues to build a much more transparent infrastructure and gives farmers the tools needed to improve the economic model of their farms.  COE raises funds for coffee farmers in coffee-growing countries, incentivizing and motivating farmers who know there can be recognition and financial reward for their hard work and effort (Benzinga, 2021).

Twenty per cent of the proceeds made from this project will go towards the CoE and World Coffee Research, a research centre focused on the preservation of origin diversity (Global Coffee Report, 2021).

Group of happy farmer showing his freshly harvested Arabica coffee beans

“Our mission is to recognise and reward extraordinary coffee farmers. The Coffee Bros NFT project provides an innovative way for the consumer to enjoy that particular coffee forever while also elevating the producers,” says Anna Abatzoglou, Managing Director of Marketing and Membership for ACE and CoE (Global Coffee Report, 2021).

You can take a look at our products in which you will also find the Ethiopia Washed Sidamo Mocca Adey single origin coffee (SCA score 86.5).

Ethiopia CoE 2020 Broke Records

The 2020 Ethiopia Cup of Excellence (CoE) auction broke records, with total sales of US$1,348,690 topping the previous record of $830,245 set by El Salvador in 2011 (Global Coffee Report, 2020).

The Roastery At Harrods: Coffee Elegance In Knightsbridge

Half of the lot was purchased by Maruyama Coffee Co from Japan and its buying group, consisting of Saza Coffee, Cometeer, Goodboybob Coffee, Difference Coffee, and Harrods. The other half of the lot was purchased by Sarutahiko Coffee Inc from Japan (Global Coffee Report, 2020).

The 168 registered buyers from 33 countries bid 4137 times for more than five hours to secure the sought-after winning coffees. The second-from-the-top coffees coming from Rumudamo Coffee in Sidama, had a total of 902 bids, another record number in the competition history (Global Coffee Report, 2020).

In 1991, Kentaro Maruyama opened the first Maruyama Coffee location in Karuizawa – Nagano Prefecture

The United States company Coffee at Intelligentsia won out in the competitive bid, paying a price of US$108 per pound (Global Coffee Report, 2020).

“None of us had heard of a coffee sold for this amount. It’s a surprise for everybody,” says Ato Bogale. Rumudamo had another winning coffee in the auction that sold at US$35.10 per pound (Global Coffee Report, 2020).

The third highest price went to Testi Trading at US$66.60 per pound, sold to Black Gold Coffee Co from Taiwan. “We are pleased with the result,” says Ato Faysel Abdosh, Founder and Manager of Testi (Global Coffee Report, 2020).

Black Gold Coffee Roaster

TAIWAN 2021

With an annual market exceeding NT$70 billion (US$23 billion), Taiwan has been put on the map as a major coffee-consuming country and a relevant player in the specialty coffee industry (Taiwan News, 2020).

Cama Coffee Roasters, known for its quality coffee at affordable prices, renovated a historic house and transformed it into a coffee shop at the mountainous tourist attraction of Yangmingshan in Taipei. Taiwan also boasts three coffee shops that were ranked among the top 50 in Asia by travel website Big 7 Travel (Taiwan News, 2020).

White Cloud Mountains, Taiwan

The Taiwan Coffee Laboratory, on behalf of the Council of Agriculture, Executive Yuan R.O.C. (Taiwan) and Taiwan Coffee Association, has partnered with the Alliance of Coffee Excellence (ACE) to host the first Private Collection Auction of Taiwanese specialty coffee (Global Coffee Report, 2021).

The auction will feature nine winning coffee lots, all of which scored 86 points or more. These lots represent three varieties: Geisha (which you can find on our website), SL34, and one unknown. The lots also represent three processes including honey, natural, and washed (Global Coffee Report, 2021).

A panel of 26 judges from five countries selected the nine lots, out of 19, that will be part of the auction. An additional six coffee lots that scored between 85 and 85.99 will also be included in the sample sets and are available for sale directly through Taiwan Coffee Labs (Global Coffee Report, 2021).

The auction is designed to honour the work of the local Taiwan coffee producers and to share their prize coffee with the rest of the world (Global Coffee Report, 2021).

Sign of a local coffee shop in the Janfusun Fancyworld

“Our hardworking coffee farmers, ever curious and ever responsive to market demands, are incredible professionals. They experiment with varieties, grafting, pruning, harvesting, processing, [and] fermenting, always remaining fully committed to their craft,” says Krude Lin, President and Founder of Taiwan Coffee Laboratory (Global Coffee Report, 2021).

This partnership between the Taiwan Coffee Laboratory and ACE was established as part of ACE’s mission to recognise and reward exceptional coffee producers, driving farmers access to premium markets (Global Coffee Report, 2021).

ABOUT YEMEN

Coffee plantation in the hills of Haraz, where the worlds best coffee is grown and dried

This year’s auction is the biggest auction in the history of our collaboration with ACE. The auction has received 1,900 farmer’s coffees from across Yemen’s entire coffee lands. Of that 1,900, 429 lots successfully pre-qualified and out of those, 42 coffees were cupped by the prestigious international jury of coffee experts from 20 companies across 10 different countries. Click on the link to learn more about these exceptional coffees and the exceptional people behind them.

From 1900 entries to 22 coffees that represent Yemen’s best Sample sets contain 100 grams of green coffee from each of the 22 winning lots. You don’t want to miss this opportunity to try these rare and beautiful coffees! They will be available on the Alliance for Coffee Excellence website.

BIBLIOGRAPHY

Global Coffee Report. (2020). Ethiopia Cup of Excellence auction raises more than US$1million for coffee producers. June, 29th from  https://gcrmag.com/ethiopia-cup-of-excellence-auction-raises-more-than-us1million-for-coffee-producers/

Global Coffee Report. (2021). Alliance for Coffee Excellence announces first Taiwanese Coffee Auction. August, 2nd, from https://gcrmag.com/alliance-for-coffee-excellence-announces-first-taiwanese-coffee-auction/

Taiwan News. (2020). Taiwan coffee industry sees boom. February, 1st, from https://www.taiwannews.com.tw/en/news/3849000

 

ICO July Report: high levels for Arabica coffee prices and severe frost in Brazil

Prices for Arabica coffee in July 2021 surged to the highest levels since November 2014, severe frost hit Brazilian coffee farms, and concerns grow over weather phenomena in numerous producing countries

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ArtOn Café is proud to publish a monthly abstract of the ICO reports. On our website we have added the graphs of the London and New York stock exchanges. The former concerns Robusta coffee, while the latter refers to Arabica coffee. We have also added an interesting banner that presents the EUR to USD exchange rate. Please visit our website to access all these details.

Source: ICO

We have already talked about the weather conditions in Brazil, and the following – which is is an excerpt from the ICO market report of July 2021 – focuses mainly on the prices of Arabica coffee and on the severe frost that hit Brazil:

Coffee prices continued to increase in July 2021, with the Arabica variety reaching its highest levels since November 2014, as concerns grew about the current and future availability of many origins, especially the world’s largest producer, Brazil, which suffered a severe frost on July 20.  As a result, market volatility increased. The monthly average of the ICO composite indicator reached 152.24 US cents/lb in July 2021, its highest level since 162.17 US cents/lb recorded in November 2014. Compared with the monthly average in October 2020, the beginning of the current coffee year, the level reached in July 2021 represents an increase of 43.8%.

Prices of all four groups of coffee have recorded substantial increases. This upward trend of coffee prices over the first 10 months of coffee year 2020/21 seems to confirm a net recovery from the low-price levels that have dominated the world market since coffee year 2017/18. The price performance has also been driven by brighter prospects for demand, as pandemic-related restriction measures are being removed in major consuming markets and the development of vaccination programmes is enabling a progressive return to normal economic activity.

In terms of market fundamentals, exports of all forms of coffee by all exporting countries to all destinations totalled 11.2 million 60-kg bags in June 2021, an increase of 4.1% compared with 10.8 million bags in June 2020. The level of total exports in June 2021 mirrored the volume of 11.2 million bags recorded in June 2019, before the pandemic. Social unrest affecting transportation logistics in some origins, particularly Colombia, has ended.

Moreover, with the gradual introduction of vaccination programs, covid-19 pandemic-related restriction measures affecting people’s movement have been eased in many exporting countries. Total exports of all forms of coffee over the first nine months of coffee year 2020/21 amounted to 98.6 million bags, an increase of 2.5% compared with 96.1  million bags during the same period in coffee year 2019/20. Cumulative exports from July 2020 to June 2021 are estimated at 129.7 million bags, an increase of 0.6% compared with the 129 million bags recorded from July 2019 to June 2020.

World consumption for coffee year 2020/21 is projected at 167.58 million bags, an increase of 1.9% on its level of 164.43 million bags in coffee year 2019/20. The projection for total production in coffee year 2020/21 remains unchanged at 169.60 million bags, 2 Coffee Market Report – July 2021 representing a 0.3% increase on 168.94 million bags harvested in coffee year 2019/20. However, with substantial reduction of output from Brazil and many other origins affected by climate-related shocks, combined with increasing demand, the supply/demand ratio is expected to reverse from coffee year 2021/22 onward.

Source: ICO Coffee Market Report – July 2021

References

ICO. (2021). Coffee Market Report July 2021. Retrieved from https://www.ico.org/documents/cy2020-21/cmr-0721-e.pdf

Picture credits: if not otherwise specified, the pictures were purchased by the ArtOn Café director