July is upon us, and that means 2021 is half way through.
Victorians have emerged after a number of weeks of yet another lock down and spare a thought for the rest of the states in these tough times.
 
While it’s been difficult for business to continuously ‘lockdown’ and ‘open up’ across various parts of Australia, we recognise that overseas the situation is not as simple.
The ripple effects a year after the pandemic swept across the globe have come to wreak havoc on our shores. The international shipping container shortage is just one issue that is causing chaos for coffee traders (or any traded goods for that matter). While cargo ships initially grounded at the first signs of Covid in 2020, they left empty containers at ports of countries that have been economically crippled by the virus. Shipping routes concentrated on the busiest ports of countries that had been financially stable enough to keep up imports. This led to numerous ports being overlooked by shipping lines, leaving empty containers to languish, while the usable container pool became stretched thin.
 
We anticipate that this trend will possibly lead to delays in imports to Australia, as we wait for our producer partners to secure the highly sought-after empty shipping containers in anticipation of packing and shipping us their lovely coffee. While our Logistics Coordinator is working hard to ensure our contracts reach us in fastest time possible, we ask for your patience during this unprecedent time. We will endeavour to keep you updated here.
 

MARKET REPORT
 
After the excitement of April and May, the coffee market took a bit of a “breather” during the month of June. After having reaching an almost 5-year high of just under 170 US cents/lb at the end of May Arabica prices eased all the way from the high 160s during the first half of the month, to then settle into a trading range of 150-155 US cents/lb (give or take).
 
Apart from a slight easing in the Colombian deadlock, there has been no major change to the supply/demand landscape since last month, which tells us the market was a touch overcooked and in need of a correction. However, the fact that prices did not venture south beyond the 150 US cent/lb level, tells us it’s not all smoke and mirrors, and that there is in fact a new base level we need to adjust to for the time being as a result of lower global supply of coffee and progressively improving demand.
Also, while not strictly demand and supply related, another supportive factor for coffee prices is the recent strength in Brazil’s currency, the Real, which has appreciated over 15% during the past quarter. A stronger Real means you need more US dollars to buy the same amount of coffee from producers in local currency. When this happens in the country that produces 50% of the world’s arabica coffee, then local currency movements affect the international price of coffee itself.



One other factor we need to keep an eye on in the short term relates to the now traditional (and let’s be frank, quite predictable) winter-time chanting of the F word by traders and speculators alike. I am of course referring to the word Frost (although the occurrence of this F word might rapidly lead to one of a lesser family-friendly nature…). The mere utterance of the possibility of cold fronts during winter in parts of Brazil (sometimes not even close to coffee regions, or even too cold for that matter) is enough to result in price spikes and heightened volatility in a market that is already on edge.
And if large-scale frosts were to occur in Brazil’s coffee regions resulting in extensive damage to next year’s already diminished crop as a result of drought, then that would be, as we say in the trade, “not good”
 
 
COLOMBIA UPDATE
 
Since our last update in early June, some good news has started to emerge from Colombia.
The county’s largest port Buenaventura on the west coast which handles some 60% of all import and export goods for Colombia has reopened. The port is currently working at a limited capacity of approximately 50%. This has allowed imports to move out and some coffee exports to start trickling onto vessels. Many of the major shipping lines are rescheduling vessels to start calling again in early July. As time passes the port should move back to normality over the coming months, however it is going to be a slow haul.
 
We all need to appreciate food grade shipping containers are in short supply internally in Colombia. The first shipments of coffee starting to move now are shipments that should have been shipped in Late April and Early May. It is going to take a very long time for exporters to clear their back log of shipments before they can even think of shipping their commitments for July and August. The northern ports of Cartagena and Santa Mata are still seeing delays and major congestion as exporters pushed shipments north over the last few weeks to the Caribbean ports. Vessels and cargo bookings are now pushing out 3 to 4 weeks before cargo can be shipped.
 
As the month of July starts, we have been advised that the Covid outbreak is still wreaking havoc to the country. Over the last month the Colombian Medical system has seen further pressure on their infrastructure and services. ICU departments across the country are now at 100% capacity. The health system is now dealing with an average 28,000 cases a day and a death toll of some 800 patients per day which is an increase over the month of 300 people a day.
 
The president of Colombia’s helicopter was attacked and shot at during a flight to the northeast of the country late last week. Lucky for everyone on board, it landed safely and no one was hurt. This attack was attributed to an illegal crime groups.  In Bogota’ and Cali there is continuing violence and disruptive demonstrations with local authorities currently unable to quell the violence. In the areas of South Tolima, Northern Huila and Eastern Cauca in the southern part of Colombia known as the “The Axis Triangle” there is still safety concerns and many producers, coops and associations are worried about where this could lead in the future. Some of our contacts on the ground and our exporters are suggesting that these regions could become no travel zones due to security concerns like they were back prior to 2000.  With the current improvements on major arterial roads within Colombia the country is ever so very slowly making its way out of the recent disruptions. We begin to breathe a little again and hope this recent positive news continues moving forward.
 
 
A WORD FROM THE CUPPING ROOM
 
Overseas reports show that Brazil’s harvest is about 40% complete now. Typically the season wraps up around September and we start seeing 21/22 crop hitting our shores later in October/November.
 
But! You don’t have to wait that long for great Brazilian coffees! In stock now we have five lovely coffees from our friends at SMC… you may have tried the Monte Alto 100 year old bourbon before… but have new to our range are:

• Brazil Fazenda Cruzeiro Maragogype Natural. Big bold beans with sweet warm spice and notes of blackcurrant, leather and orange. A coating mouthfeel carries a rich dark chocolate finish.  Farmed by Mr. Carlos Alberto Paulino Costa, an expert in Maragogype cultivation, skilfully maintaining the family farm that is over 100 years old. 
• Brazil Sitio Mae da Providencia Natural. Crisp green apple and grape acidity. A full texture carries a long sweet chocolate liqueur finish. Produced by Edenilson Aparecido de Carvalho on his 3.2 hectare farm in Caldas. Edenilson stives for perfection in the cup, and as winner of the 2019 Cooxupe and SMC Brazil Specialty Coffee Competition, his coffee speaks for itself.
• Brazil Fazenda Pedra Redonda Natural. A smooth bodied coffee with notes of chocolate, nectarine, malt and almonds. Crisp citric acidity lingers. Second generation farmer Beto Santana focuses on ecologically sustainable farming, preserving large areas of his farm for native forest and water preservation. More recently Beto has installed solar panels, which supply the entire farm with renewable power.
• Brazil Fazenda Sao Joao Natural. A smooth silky cup carries notes of cherry, plum, toffee, vanilla and dark chocolate. Third generation Italian farmers, the Bachião family immigrated to Brazil in 1914 and sought out the best land for coffee cultivation. Being the first producer to establish coffee farming in Nova Resende, they can truly be called coffee pioneers of Brazil. With the fourth generation now learning about the farming technique, coffee runs in the blood of this family.   

 
 
 
AICA AWARDS
 
The Royal Agricultural Society of Victoria (RASV) is pleased to announce that entries are now open for the 2021 Australian International Coffee Awards (AICA).
First held in 2013, the AICA are recognised as Australia’s premier international coffee roasting and cold brew competition seeing support from across the globe. Providing the world’s best roasters with the opportunity to credibly benchmark their products, receive invaluable industry feedback from a panel of more than 40 leading industry experts and drive immediate sales.
 


Overseen by a highly skilled Industry Advisory Group, the AICA is shaped by the trends in the coffee industry and consumer demand for style and variety. RASV Manager, Category Growth and Development, Damian Nieuwesteeg was thrilled to announce that the Coffee Awards would be going ahead in 2021.  “With the Royal Agricultural Society of Victoria successfully staging the Australian International Beer Awards last month, we are confident that the Australian International Coffee Awards too can be delivered safely for participants and the judges. To minimise the potential impact of ongoing COVID-19 restrictions, in particular interstate travel, the panel will comprise mostly Victorian-based coffee experts who will bring the skills, knowledge, experience and, most importantly, a passion for celebrating excellence in coffee roasting and cold brewing”, Damian said.
 
The AICA is overseen by a highly skilled Industry Advisory Group, with members including Melissa Caia from the Coffee Academy at William Angliss Institute, Dean Slade of Xtracted Espresso Solutions, coffee consultant Adam Metelmann, and Georgia Major from H. A. Bennett & Sons.
The Industry Advisory Group works closely with RASV to develop and shape the future direction of the AICA and have this year introduced some innovative changes to the program.
 
Roasters whose product is scored highly by the judges earn the right to display an Australian International Coffee Awards seal of excellence and gain access to an exclusive medal winners’ marketing and promotions toolkit.
Judging will take place from Monday 9 August – Wednesday 11 August Melbourne Showgrounds in Victoria, with the trophy winners to be announced on International Coffee Day on Friday 1 October in the MasterChef Pavilion at the 2021 Royal Melbourne Show.  We encourage you to get your entries in before the 16^th of July to be part of this prestigious program.
For more information or to enter online visit the RASV website.
 

CAFESMART
 
We are heartened to see the hospitality industry rebuild and strengthen after such a difficult year – and particularly in Melbourne. This year CafeSmart runs fromting poverty, hunger, social disadvantage, and homelessness in our vulnerable communities. For more information or to sign up, visit the streetsmart website.
 

 


Happy Roasting,
The Bennetts Team