Welcome to May,

Autumn is in full swing in Melbourne, and as the days get colder, we expect more cups of hot coffee to be in demand to keep fingers warm.

Last month we had the pleasure of learning more about Ipanema farms in Brazil and the new technologies they have implemented at their Rio Verde farm. Thank you to all who took the opportunity to join in the virtual presentation, the feedback afterwards was most encouraging, and the insight into the upcoming harvest in Brazil was invaluable.

You can read more on what’s happening at origin below.

MARKET REPORT

It’s been a good six weeks since we last put pen to paper to talk about the goings-on in the coffee market, and quite a lot has happened since then! Back in mid-March we were expecting some price volatility ahead, and the coffee market duly obliged… and then some.

Arabica pricing rose steadily from a low of 122.50 US cents at the start of April, and peaked practically one month later on the 29th at 146.80 US cents/lb, a price level not seen since July 2017, before falling back to a strong support level of just over 140.

There haven’t been any shocks in supply (Brazil still expected to be down 30-35% this coming season), although fear there might be a shortage in washed mild coffees this season may have played a role. In any case, the Colombian Federation soon put out that fire with a report indicating their next main crop will be in excess of 14 million bags.

The main drivers for this recent spike were actually macro-related (a stronger US dollar, and higher agricultural commodity prices across the board), as well as speculative (investment funds increasing their long position in anticipation of higher demand in the near future).

On this last point, it really is taking a while for higher demand as a result of an expected successful global Covid vaccine rollout to kick in… The horrendous situations in India and PNG, civil unrest in Colombia, and a return to restrictions in parts of continental Europe should be a sign for us all in our Oceania bubble to be wary that we are not out of the woods just yet.

ORIGIN UPDATE

Brazil
As the rainy season continues to be unreliable, Brazil saw multiple flowerings through the September – November period resulting in uneven maturation on the trees in the first quarter of 2021, and some fruit not taking at all. While harvest has started in the lower altitude areas, Brazil is expecting a significant reduction in crop this year, even taking into account 21/22 is an ‘off’ season for them. Contrastingly we heard good news from Ipanema last week that they will have an increase in coffee production this harvest due to alternative cycle pruning and their innovative irrigation system.

There are still a lot of people waiting for work in Brazil as the country is still in a ‘state of emergency/quarantine’. The upcoming harvest this month will be a welcome reprieve for workers – now the challenge begins on how to safely transport them to the farms.

Colombia
Fly crop harvesting has been slow due to delayed rains causing slower than usual maturation of the fruit, estimates indicate Mitaca may be down 15% on last year. We are still continuing to see good quality cups landing in Australia, and expect next main harvest to be more fruitful. While Colombia has successfully vaccinated over 2 million people, the government is still wary of a third wave of covid cases following Easter and has placed some restrictions on residents.

East Africa
Ethiopia, Kenya and Tanzania are waiting for the setting of the fruit after flowering for the 21/22 season. Its still too early to know what the quality of the next crop will be. There is still a lot of current crop coffee to export, and while internal logistics are under control, what we have seen from Africa is an unusual amount of delay in booking vessels and obtaining suitable containers for export. Due to the backlog left by the Suez channel shipping lines are reluctant to pre-book vessels, leaving us at the mercy of the shippers. Our logistics coordinator at Bennetts is working tirelessly to ensure our Ethiopian coffees make it to Melbourne as quickly as possible.

Papua New Guinea
The season in PNG has been good, and the forecast is for a similar, if not larger crop than last year. While PNG managed to stay covid free for most of 2020, they are now seeing over 500 cases a day totalling over 5000 cases in April. Most of the covid cases are isolated to the capital and Port Moresby, leaving the farming and port area relatively unaffected. Thankfully Australia and New Zealand have donated medical equipment to assist the outbreak. We will continue to monitor the developments in PNG over the coming months.

India
Last year saw poor weather conditions during the curing (drying) works of parchment and cherry – which resulted in lower than expected cupping profiles in the current crop of Indian plantation coffees. Our QA team has been vigilant in the cupping room to ensure we select the best cupping lots for import to Bennetts. Unseasonal rains between December and February again resulted in uneven flowering and maturation for the 21/22 season, followed by a slightly dry patch, which is unfavourable for the development of the fruit. The upcoming harvest has however been overshadowed by the extremely high number of covid cases coursing through the country. While ports remain open as of today, we will be keeping a close eye on India over the next few weeks to try and handle logistic disruptions. We wish our Indian friends good health and good luck through this troubling time.

A WORD FROM THE CUPPING ROOM

In case you missed it, earlier this year we landed a great lot of excelso from Colombia – the Narino Inga Mystique – what a name you might say, well what a coffee!

The Colombian Excelso Narino Inga Mystique is a super sweet and delicate cup, with notes of stone fruit, berry and vanilla. This great coffee comes from Medina Espejo (located in Narino, Southern Colombia), a village comprised of traditional small coffee growing estates. Grown and processed by 17 producers, the coffee is a combination of Caturra and Castillo varietals. Due to the regions high altitude of 2000 masl, there is no shade to protect the crop from direct sunlight, however the characteristics of humidity, wind, temperature and soil are very favourable to producing special coffees, as well as the canyon microclimate that surrounds the farms. The coffee is hand picked and tank fermented for 12 to 24 hours. The canyon microclimate favours the drying process with parchment being sun dried in a patio courtyard for up to two weeks. The soil and climate conditions of the Narino combined with the traditional knowledge of local indigenous people contributes a cultural component to the coffee growing methods of this community – providing the cup with a mystical ancestral feature that leads to an extraordinary sensory experience.

Get in touch with your account manager for pricing and availability.