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The latest news and views from the Bennetts team

Featuring the latest news on the coffee industry and business insight from senior members of the Bennetts team.

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THE BENNETTS MONTHLY OCTOBER '21

All things Bennetts and Coffee...

 

Happy Coffee New Year!
The 1st of October marks the start of the ‘Coffee Year’ and no coincidence that today is International Coffee Day! Cheers to you all, we hope you enjoyed a delicious caffeinated (or decaffeinated if you prefer) beverage to celebrate today.
 

GLOBAL SHIPPING
 
Unless you’ve been living under a rock, you should know by now that the global container shortage crisis continues to have an effect on all imports into Australia.

From Colombia, the ports of Buenaventura and Cartagena coffee storage capacity has exceeded capacity and is now overflowing the port area. During the strikes of April and May, a lot of cargo was moved to the port of Santa Marta in an attempt to move export goods – however the smaller port was not prepared to handle large volumes of coffee. This back log and severe lack of containers will surely cause booking disruptions for the coming months.

     


MARKET REPORT

The month of September was relatively “quiet” on the pricing side of things, with the NY ‘C’ price trading within a 20 US cents/lb range, as the trade responded to alternating reports of rain and no- rain across Brazil’s coffee country (much as predicted last month). With all the excitement of the past couple of months, a 20-cent spread could almost be considered the doldrums… 

      

The top of the current range is a very firm 200 US cents/lb, while the bottom is at 180 US cents/lb, and the rains could be the key to breaking through one of these… Fortunately for consumers, there are now more and more reports pointing towards more than adequate levels of rainfall occurring across large areas of Brazil’s coffee regions during most of October. Of course, we’ll need rain in November and December to help set the fruit, and for it to develop, and so forth, but this will hopefully take the heat out of the market for a bit.

But will prices break below 180? Maybe… but if they do, we shouldn’t really expect them to go much lower; and definitely not below pre-frost levels as the factors listed in last week’s report haven’t just magically disappeared … that ship has sailed well and truly.
And speaking of ships and rain, the big storm hammering ports across the globe continues to be that of the international shipping crisis, which shows no signs of abating any time soon…  (Who would have thought 18 months ago that buying Evergreen and selling Evergrande would be the genius move?) But not to worry, our intrepid logistics team is working tirelessly to get coffee onto boats and into your hopper, come rain (hopefully) or shine!


FAIRTRADE
 
In celebrating International Coffee Day, today we are raising our mugs to the more than 760,000 Fairtrade coffee farmers around the world.
We are proud to be Fairtrade Certified and to be celebrating that our coffee is part of a FAIRER future for women, children and the environment.
 
From cherry to cup: 8 steps to make a fair coffee
Fairtrade coffee is grown by farmers around the world from the mountains in Peru to the valleys of Papua New Guinea. Here are the eight steps to make a fair coffee.

     

  1. Your Fairtrade coffee is grown by farmers around the world from the mountains in Peru to the valleys of Papua New Guinea.
  2. Luscious red coffee cherries are picked by the skilful hands of men and women, who have generations of coffee growing expertise
  3. The next step in this coffee’s journey is to a nearby regional town where it’s transported to exporters who pay the coffee farmers a FAIRTRADE price. This stable price means the farmers can plan for their future and provide for their families.
  4. The green coffee beans travel across the seas to your favourite coffee roaster who pays the exporter that same fair price but also pays the farming cooperative an extra FAIRTRADE premium for the community to spend on what they need.
  5. The extra money might be spent on a new hospital or school, technology to help the producers farm sustainably or fresh water pipes for the region’s villages.
  6. The farmer’s Fairtrade cooperative, and the whole community, become empowered. Children are free to go to school, women become part of the decision-making processes and all of the farmers are supported to improve their coffee and take care of the environment.
  7. Those special beans are then roasted with care to bring out their unique origin flavours – perfect for your morning pick-me-up.
  8. You sit back and enjoy your coffee, knowing that this simple purchase has been part of a system that makes the future FAIRER for both the planet and its people.
 
 COLOMBIA UPDATE

Much like Australia, the Colombian national vaccination program has been delayed as a result of late arrival of vaccines from the different manufacturers to the Country. 51% of the population has received at least one dose of vaccine and 33% are fully vaccinated. New Covid-19 cases in Colombia have dropped significantly in recent months to 1600 daily reported infections on average in the past week and 40 daily deaths. While some larger companies continue to promote working from home, most of the country has gone back to face to face commerce, as well as most schools.

As you might recall from earlier this year, there was a failed attempt from the Government to pass a tax reform that ended in the resignation of the Finance Minister. While the new Finance Minister has since been successful in, in passing a $15 billion COP (U$3.9 billion) tax bill through Congress. This dollar figure shows you how small Colombia's economy is. As mentioned previously, the structural problem in Colombia is that only less than 5% of the country’s labour force files income tax, which means that 20% of the total income tax collection comes from individuals and 80% is corporate! A sharp contrast with other OECD member countries.

Within the coffee sector, individual coffee producers do not file income tax. At times of price booms, such as the current climate, where coffee growers’ incomes are high, it makes sense for the Government to attempt to expand the taxpayer base. Besides this macroeconomic point, overall security in main cities has continued to deteriorate with daily street crime cases dramatically increasing. The early stages of next year’s presidential election continues to heat up now with over 40 precandidates, a phenomenon not seen in previous elections. This means that through February – March 2022, we’ll see this crowded group narrow down to the left, centre and right favourites. We’ll keep you updated with further news on the Colombia situation though the year.
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