What a start to the year! 😅

The unprecedented downpour seen across Queensland and NSW has caused millions of dollars’ worth of damage and disrupted and already strained logistics system across the east coast of Australia.

We are currently experiencing some delays in delivers through the flood affected areas - and we ask at this time for patience with regards to your orders on route.
 
Our hearts go out especially to our customers that have been hit hardest so far in Queensland. We understand the clean-up and set up of your roasteries may take some time - but when you’re back on your feet, get in contact with your Bennetts Account Manager to discuss how we can assist your business with re-stocking your coffee.
 
 
WHERE IS THE COFFEE PRICE GOING? part 2
 
A few months ago, we stressed the need for roasteries to assess their business' buying habits and budgets. With the C market in a volatile position, combined with fluctuating exchanges rates and exorbitant shipping costs, the price of coffee has rarely been higher than during these times.
 
But the demand for coffee at the consumer level hardly changed. Usually, when we see one origin increase the cost of coffee, demand for that product tends to fall, and roasters shift to comparative origins at lower prices. However, as we have seen the cost of coffee increase in every single origin globally (due to a multitude of factors) it can be expected that roasters will likely pay more for their coffee and adjust their buying habits accordingly. This means demand for coffee as a commodity is fairy inelastic - thus higher pricing doesn't necessarily equal lower volume demand. 
 
While we can’t predict the future of the market, we can recommend you contact your Bennetts Account Manager to discuss how we can help you and business make purchasing decisions.
 

MARKET REPORT

After reaching yet another 10-year high (just shy of 260 US cents/lb), as a result of a mostly speculator-driven squeeze in the run-up to the expiry of the March-2022 arabica futures contract, the C price duly lost its momentum once we were past the critical price-fixation period.
For a short while it looked like prices were going to settle in a 240-250 US cents/lb range until, as we all know, war erupted in Eastern Europe. This saw a lot of speculators cash in their coffee positions and shift them to other more lucrative prospects such as grains, oilseeds and oil. As of writing, coffee futures settled just above a very strong support level of 220 US cents/lb.

 

So, where does this leave the coffee market? Well, at this stage it’s simply far too early to tell. If we take a look at supply and demand, we still see a structural deficit that will carry through until at least the middle of 2023 (and probably beyond).
Supply will be tight out of Brazil for some time to come, with preliminary estimates showing an arabica crop size expected to be below 40 million 60kg bags (prior to last year’s devastating frosts this would have been 50-55 million). And we can now throw in Colombia and Honduras into the mix of underperforming origins this season, as they have both had less-than-optimal crop results recently. Of particular concern is Honduras, which caught pretty much everyone by surprise and sent prices soaring, resulting in many traders withdrawing from the market until such time as thing settle down.

On the demand side things seem to be slowly kicking back into gear in the US, while Europe has been on the sluggish side of things. The war in Ukraine will not help things, and with Russia (a 6 million bag consumer of coffee) being frozen out of international market (coffee included - hope they like chickory!), there might be a little less pressure on supply…

Therefore, while it’s hard to know where this market will go in the next few weeks and months, we get the feeling we’re not out of the woods quite yet when it comes to coffee prices. It’s also important to note that will the ‘C’ may be softer at present, fuel and freight costs (which directly influence the price of coffee) remain quite firm.

 
A WORD FROM THE CUPPING ROOM
 
Africa has wrapped up another great season, and we are starting to see some new crop specialties ship in to Melbourne. Arriving shortly from Tanzania we have ‘Kiboko’ coffee. Kiboko is Swahili for Hippopotamus, and the native animal will feature on the sacks. And just like the hippo this is a big coffee! Crisp plum, orange, blackcurrant, peach and lime fruits with black tea. Malic acid and rich chocolate and hazelnut finish. Due in store early March.
 
Sourced from a network of washing stations across Mbozi, Mbeya & Mbinga, in Tanzania’s Southern Highlands. Farmers process hand harvested cherry on their own farms. Individual processing methods vary from farm to farm - generally, cherry is pulped using either an eco-pulper or standard pulper and then fermented. The parchment is dried on raised beds for 14-20 days, and then rested for 2-3 months in cooperative warehouses before being transferred to mills in either Mbozi or Mbinga, districts to be prepared for export.

Coffee’s roots in Tanzania can be traced via oral history back to the Haya tribe of Northwest Tanzania in the 16th century. Following German and then British colonial rule, the Tanzanian coffee industry has undergone many transformations and adjustments in an effort to create the most equal, profitable and high-quality coffee possible. Coffee in Tanzania was grown almost exclusively in the North for a long time. The Kilimanjaro, Arusha, Tarime, Kagera, Kigoma and Karatu/Ngorongoro regions were prized for their ideal Arabica growing conditions. At the time, coffee production was so concentrated in the north that Moshi, a northern municipality, was the only hub for all coffee milling and sales.

Operations in Moshi grew to truly massive proportions in the 1950s and early-1960s. Since both Tanzania, Kenya and Burundi were under British rule in the post-war decades, Moshi was the second milling and sales hub (after Nairobi, Kenya) for British coffee production. Coffee cultivation has extended southwards in recent years. In addition to the historical powerhouse regions in the north, coffee is now also grown in the southern regions of Ruvuma and Mbeya/Mbozi. Most Southern expansion of coffee growing occurred in the 1970s and 1980s and was encouraged by two projects supported by European backers. In an ironic twist, today 75 to 85% of total coffee production in Tanzania comes from farms in the south.

 
INTERNATIONAL WOMEN'S DAY 
 

This year International Women’s Day (IWD) theme is Break The Bias, a world free of bias, stereotypes and discrimination. A world that is diverse, equitable and inclusive. 
 
On this day, we celebrate the social, economic, cultural and political achievements of all women and girls but also recognise their contribution and sustainability initiatives around the world. An event for everyone to reflect on our social responsibility to take action to break the bias in our communities and workplaces and work together towards gender equality.
 
International Women in Coffee Association (IWCA) Australia is inviting the coffee community to celebrate IWD on Tuesday, March 8th 2022 at 5:00 pm AEDT with an online sharing knowledge session about Australian-grown coffee with our own local female producer and roaster, Lucy Stocker from Crater Mountain Coffee, located in the Southern Atherton Tablelands Region of Far North Queensland in the locality of Upper Barron.
 
Lucy and her family's passion and dedication to each stage of the processing results in the production of the highest quality Australian coffee. She does experimental processing and roasts her coffee for the local and international market. Lucy’s experience and knowledge from seed to cup will be beyond doubt of benefit to our community.

This event will be held online via Zoom, please register to get the dial in details here and for more information about IWCA Australia visit www.iwcaaustralia.org and for more information about IWCA Australia visit www.iwcaaustralia.org

 Happy Roasting,
The Bennetts Team