THE BENNETTS MONTHLY MAY '2023
All things Bennetts and Coffee...
| It’s May and the weather might be cooling down, but fear not – our caffeine addiction is still burning strong. So, grab a cup of your favourite brew, settle in, and get ready to sip on some delicious coffee news and insights. From the latest trends in the green bean market, international travel, and origin updates, we have got you covered. So, sit back, relax and lets dive into the brew-tiful world of coffee. SPECIALTY COFFEE ASSOCIATION (SCA) EXPO Last week, Georgia, Scott and Alex flew over to Portland, USA to attend the SCA. Travelling half way around the world is important to us, as building meaningful relationships with our supplier partners is key to running a good business. The event was well attended despite the dreary weather, and we had the opportunity to catch up with many of our key suppliers. Re-connecting with Colombian producers so soon after visiting their facilities last year was heartening to hear that the weather events of the last two years are settling down, and they expect better climatic patterns for the rest of this season. Our Guatemalan friends also provided a positive outlook on the coming season, despite experiencing some difficulties with weather and picking staff last year. We also had the opportunity to connect with several Ethiopian producers, both new and old, and in particular, Erkehun from Yirgacheffe Coffee Farmers Co-Operative Union. Erkehun will be visiting Bennetts in early May to talk about the great things they do at this Faritrade Organic Coop. (read on below for more details). While we filled our days at the Expo with many meetings, we did get a chance to ‘walk the show floor’ and see what innovations there are in the green bean industry. Of particular interest was the ProfilePrint machine, which uses light spectrometer technology and computer learning to determine the quality of the bean… we’ll be keen to see how this tech affects the industry in the future. It was encouraging to see so many Australian representatives attend the Expo this year which gives us reassurance that our industry is returning to normality after a few turbulent years.  Jenny, Alex, Scott, and Georgia with Erkenhun from Yirgacheffe Coffee Farmers Co-Operative Union at the SCA Expo in Portland. ETHIOPIAN YCFCU VISIT (MELBOURNE) One of the largest collectives on the African Continent, the Yirgacheffe Coffee Farmers Cooperative Union (YCFCU) is renowned for consistently providing classic cup profiles in both washed and heirloom varietals. YCFCU was formed in 2002 as an association of 22 local cooperatives, who had formerly sold exclusively to local coffee boards. Located in Gedeo, southern Ethiopia, the Union utilises over 62,000 hectares in one of the most famous growing regions of the country. On average they produce 9,000 tons of washed Yirgacheffe coffee each year. The area also produces 24,000 tons of sundried coffee annually. Yirgacheffe coffee is produced in areas inter-planted with bananas which help to shade the coffee trees and are also used for local food consumption purposes. Certified by Fairtrade Labelling Organisations International (FLO) in 2003, the major aim of the YCFCU has been to secure better prices for farmers. Their mission is to promote and support the continuing development of a sustainable coffee supply, by offering producers access to the international market and promoting social and environmentally sustainable practices. Traditional Ethiopian coffee cultivation practices are still prevalent amongst YCFCU farmers. Coffee trees are managed by hand and fertilised with organic matter. Farmers choose to follow traditional cultivation practices rather than using chemical fertilisers, pesticides, and herbicides. On the 22nd May we will have the pleasure of hosting YCFCU General Manager, Erkehun at our Melbourne office, where we will learn more about the union and how Fairtrade is benefiting the farmers. We are planning on making this a public event, so please watch our socials or get in contact with your Bennetts Account Manager for more details. MARKET REPORT NY C movements and the Brazilian Impact April saw the NY C market go up, and then up a little bit more, and then up a fair bit more, before it finally started to descend. It began on April 4th vs the July terminal month at 170.25 c/lb before making its way to a high of 204.90 c/lb on the 19th. This represents a 17% increase in just over 2 weeks. As mentioned in previous market reports, the sideways movement in March seemed to show a reluctance for any market participant to take a strong position either way. When these prolonged periods of minimal movement occur, it can result in a large swing one way or another, as the Spec traders pile in. In this case, it was indeed the Specs who applied the price pressure. On the fundamental side the Arabica market has support from high rainfall in Brazil, that threatens to delay the start of the harvest. In a single week in April, Brazil’s Minas Gerais region, which accounts for 30% of Brazil’s crop, received over 450% more than the historical average. You can stand under my umbrella. Predications of an El Nino weather event occurring between August and October would bring heavy rains to Brazil and drought to India, this provides further upward pressure to prices. In the last week of April, a fairly rare event occurred, where the Robusta market drove the movement in the NY C. Usually it is the other way around. Robusta hit a 12 year high of 2,489 $/MT on the 26th April. The combination of tight Robusta stocks came from lower-than-normal exports out of Vietnam (5% down on this time last year), heavy rainfall in Indonesia and an increased demand as roasters look for ways to reduce costs to battle high utility prices and inflation. Certified Stocks As of the 25th April certified Arabica stock numbers hold at 698,868 bags, which is a decrease of about 50,000 bags from the last market report. Robusta certified stocks have 77,830 MTs, which is marginally up by 2,000 MT’s on last month’s report. Commitment Of Traders Report The COT report released on 18th April showed that the Commercials have increased their net short position, to -62,798 futures lots, which was expected as the Specs increased their net long position to 36,309 futures lots long. Overall the Open Interest is up around 87,00 lots. The Wider Macroeconomic Impact The weakening US Dollar Index is helping to support high commodity prices as fears that the continuing US bank turmoil will prompt the US Federal Reserve to cease their hike of interest rates. The Aussie dollar is continuing to drop in value against the greenback and we have even seen it touch into the territory of 0.65, last witnessed in March. Since the back end of March, the Brazilian Real has been strengthening against the USD, which usually has the effect of discouraging Brazilin famers to sell, thus reducing supply.  April 2023 NY C Graph NICARAGUA UPDATE As the final cherries were being picked and processed from the Nicaraguan mountain ranges, there was no better time to visit some producers and exporters, so Tom Bennett hopped over from Guatemala, to understand the landscape of the coffee industry in 2023.  Red coffee cherries being harvested, La Bastilla Nicaragua AUSTRALIAN SPECIALTY COFFEE ASSOCIATION COMPETITION This month Melbourne is hosting the Australia Speciality Coffee Association competitions in Coburg North. This year Bennetts is a proud sponsor of the competition, and we are super excited to have one of our own represent the company in the Brewers Cup Competition. As I am sure most of you know, we have a talented coffee roaster and quality technician by the name of Harry Ko. Harry has been working with Bennetts for over six years in the Quality Department performing QC work on our incoming green beans; including sample roasting, screening, cupping and even sales. Harry has amassed various awards for his brewing and tasting abilities, which will be on display at the competition next week! Harry has been training extremely hard, and if you would like to get down and show your support, the competition is running between the 8th – 12th of May at The Industrique (5-7 Louvain St, Coburg North, VIC, 3058). We wish him all the best for this round, and our fingers are crossed he can represent Australia at the World Competition to be showcased in Athens, Greece, in the coming months. Happy Roasting, The Bennetts Team |