HELLO MARCH!

Down here in Melbourne summer never really kicked off. and it’s already drawing to a close. But we didn’t it mind this year … have you tried wearing a face mask in the heat!?!?

    
 ORIGIN UPDATE

On the 1^st of October 2020, Papua New Guinea introduced a new Coffee Grading system to the origin. The upgrade is effectively a change to the naming convention of coffees, and as such we do not anticipate any variations to the standard qualities from the region.
As we enter the new season of PNG contracts arriving into Australia, here’s a list of the changes you can expect to see: 

• Formerly “PSC” grade will now be “B” grade followed by the reference of the screen size (excepting in the case of AX grades or running screens) . eg. B-17 will replace PSC A and B-18 to replace PSC AA.
• Formerly “Plantation” grade will now be “A” Grade, and in the same way, be followed by the numerical screen sizing (excepting in the case of AX grades or running screens). eg. Tungei A to replace Tungei Plantation AX, and Tungei A-18 to replace Tungei Plantation AA.
• Y grades remain unchanged.

 You will see these naming conventions change on our website and invoices over the next few weeks. If you have any concerns, please contact our Quality Manager for more details.


RAINFOREST ALLIANCE CERTIFIED

You may be familiar with the RFA products on your invoices and our website product listing – however with the merger of Rainforest alliance and UTZ last year, a new naming convention has been implemented for the joint organisation. Now called Rainforest Alliance Certified, you will see we are updating our database to reflect this. From now on you will see the full name Rainforest Alliance Certified listed on your invoices, and the abbreviation RAC on our website products. For more information about RAC – follow the frog here



COMING SOON
 
We have 20/21 Crop Ipanema Premier Cru Microlots touching down next month and to celebrate their arrival, we will be arranging a special live online presentation and Q&A session with Ipanema direct from Brazil. We will have nine uniquely processed lots packed in 10Kg nitrogen flushed vacuum packaging available. Stay tuned for more details on this exclusive event next week.


MARKET REPORT

What a rollercoaster the past month and a bit has been for coffee prices. After trading in a limited range during the eight weeks running up to mid- February, arabica prices bounced off the low 120s like trampoline and managed to peak at just over 140 US cents/lb towards the end of month, before promptly retreating to a strong support level in the low 130 US cents/lb range.



Now, not a lot has changed in terms of supply, as the shortage expected in next year’s Brazilian crop is now well baked into pricing. With no other major origins expected to produce any surprises for the time being, we don’t expect much change in this regard at least until Brazil begins the new crop harvest and we know exactly what is coming off the trees, both in quantity and in quality.

The demand side of the equation is what had some influence on the market this time, with a bit more optimism (or at the very least, wishful thinking) that vaccine rollouts in Europe and North America are finally going to result in a reduction in restrictions and therefore increased consumer confidence.
However, what really fuelled the sharp price spike was on the macro side, as the trillions of dollars in cash being injected into the US economy by the Federal Reserve resulted in an expectation that inflation in the world’s largest economy will increase in the near future. As a result of this, traders and investors flocked to buy futures across a range of commodities in order to secure lower prices.

Ultimately, the sharp price increase in the coffee market flushed out some origin selling, leading to a price correction which seems to have resulted in prices settling in a trading range above 130 US cents/lb. All this action would seem to indicate that higher prices are here to stay for the time being. Sooner or later global demand is bound to recover, and roasters who have been reluctant thus far to commit to purchases beyond a hand-to-mouth timeframe, will start to re-emerge from their bunkers with renewed buying appetite. There is bound to be a fair bit of price volatility in the coming months, so buckle up, as there’s certainly some turbulence ahead.