Happy New Year!

We're thrilled to resume our regular trading hours and reconnect with you after a wonderful break. We trust your festivities were filled with joy and warmth.

As we step into 2024, a new chapter unfolds within the vibrant realm of coffee. Anticipation brews for fresh opportunities and delightful experiences, and we are eager to embark on this journey together. Our passion for coffee continues to evolve, promising exciting offerings that we cannot wait to share with you.

Here's to strengthening connections, discovering new flavours, and nurturing our shared love for exceptional coffee over the coming year. Wishing you prosperity, and countless memorable sips.

Welcome to 2024!

MARKET REPORT

NY C movements and the Brazilian Impact

As the excitement for Christmas built throughout December, so did the strength of the of the New York Arabica C market. Off the back of the 12 c/lb rally we saw on the final day of November, the first couple of days of falling prices gave the impression the market was overbought. Opening at 185.85 c/lb it slid down to a monthly low of 175.05 c/lb.

After this however, it got back on the sleigh and Rudolph was really pulling. The market went up and on the 19^th it rose above 200 c/lb for the first time since April 2023. Due to dry weather in Brazil reducing the potential for 24/25 crop, there is belief that stocks might be tighter for next year. There’s still a while to go before the harvest starts, so no doubt the bags number will be revised again and again. The run up to Christmas can often see Brazilian producers reluctant to sell physical stocks, with a strong Brazilian Real adding to this reluctancy.

The USDA has revised its total 23/24 production down by 3 million bags to 171.4 million bags which will further push a bullish sentiment for the markets. Another factor keeping the value high, is the global shipping issues, which will be discussed in detail later. The month did lose some value on the final day as good rains were forecasted for Brazil’s coffee regions. Dropping to close on 188.30 c/lb.

Robusta found some real strength and surged to its highest ever price. The January 23 contract topped out at 3,201 US$/MT on the 21^st December. Stocks in consuming countries are reportedly at their lowest for 10 years and Vietnam’s Robusta exports for the first 11 months of 2023 are 10% down y/y.

Certified Stocks

The number of bags dropped by 8,000 from the last report to total 251,000 bags.

Commitment Of Traders Report

The COT released on the 26^th December revealed that the Commercials have extended their net short position to -66,392 future lots and the Specs upped their net long position by 17,000 since the last report to 47,799 lots long.

The Wider Macroeconomic Impact

Shipping rates are rising due to the Houthi group in Yemen disrupting trade in the red sea by deliberately targeting merchant ships passing through the Suez Canal. Around 12% of all the goods traded in the world pass through the canal. This forces the vessels to go round the Cape of Good Hope in South Africa, causing delays and adding expense to their journeys. Moreover, problems still exist with the Panama Canal not having enough water, also causing delays.

A little bit of good news on the other hand is that the AUD has been rising in value against the USD over the last 10 weeks. This helps (albeit, marginally) to bring down the cost of green coffee. The US of A has seen its currency weaken as stock markets increased in value and Treasury-Note yields declined. This isn’t likely to go very far though as ‘unsettled’ situations around the world call many back to the safe haven of the greenback. 

BRIEF AFRICA ORIGIN TRIP REVIEW

Back from their exhilarating journey through Africa, Georgia, and Julian, have returned brimming with newfound insights and a deeper understanding of the coffee landscape in Kenya, Uganda, and Ethiopia. This expedition marked our first return to Africa since 2019, making it a momentous occasion for us to re-engage with our esteemed supplier partners and immerse ourselves once again in the heart of coffee origins.

The trip proved instrumental in broadening our perspective on the evolving dynamics of farming practices, trading methodologies, and the current state of the coffee markets in these regions. Beyond the statistical trends, the invaluable interactions with local farmers, cooperatives, and communities offered a profound glimpse into the intricate processes and challenges faced within the coffee industry.

Our experiences in each country were nothing short of enlightening. From witnessing the unique harvesting techniques in the coffee farms to engaging with the vibrant coffee communities throughout, every encounter deepened our appreciation for the resilience and dedication of those at the forefront of coffee production.

Moreover, this trip emphasised the significance of nurturing long-standing relationships with our supplier partners. The conversations held and the shared experiences not only strengthen our ties but also reinforce our commitment to ethical and sustainable sourcing practices. The knowledge gained from this journey will not only refine our approach to sourcing but will also echo in the quality and story behind each batch of coffee we offer.

We look forward to sharing a more detailed report from our trip in the coming weeks, so be sure to keep up to date with our socials and newsletter to find out more!

A WORD FROM THE CUPPING ROOM

On our recent trip to Ethiopia, we had the pleasure of visiting some washing stations from the Yirgacheffe Coffee Farmers Cooperative Union (YCFCU). Every process at these Organic and Fairtrade Certified coop stations are thoughtfully considered to help reduce environmental impact.

Driving out to the Yirgacheffe region through the eucalyptus plantations, you could think you were in rural Australia. The locals use the fast-growing eucalypts for building houses alongside other infrastructure.

Arriving at one of YCFCU’s 28 cooperative washing stations, we saw the techniques used to pulp the freshly picked coffee cherry and wash away the mucilage in the water channels. From here the waste water is sent to a wetland of Vetiver grass to start purification, removing the sugars and pulp. The water is then flowed to a lagoon to bio ferment any remaining microbes and sugars, before being released into grasslands for filtration through the soil.

The beautiful parchment is sun dried on raised beds, and turned every hour to ensure consistent drying. Defective beans are also removed by hand at this time so they do not contaminate any of the good beans during the processing.

We currently have two delicious lots from YCFCU in our warehouse;

Fairtrade Organic Ethiopia Yirgacheffe Adamegorbota Gr1 (YCFCU) Washed

This complex cup held notes of lemongrass, chamomile, cinnamon, and honey up front. A sticky body paired with a lemon acidity carries through to an apricot, and coffee blossom finish.

Fairtrade Organic Ethiopia Yirgacheffe Cherbenta Gr1 (YCFCU) Natural

This coffee cupped with notes of orange peel, boozy red wine, rich caramel, and toffee throughout. A coating body and citric acidity carry through to a long finish of plum and stone fruit.

Contact your Bennetts Account manager to get your hands on these before they disappear.

UPCOMING ORIGIN TRIP

Our travels continue this month as some of the Bennetts Team are departing our HQ for an exciting trip to Origin. Georgia and Alex will be making their way to India, and Sri Lanka. It will be our first trip back to these beautiful countries since 2019. We are eager to see how things have changed, and to get some first-hand knowledge on the current coffee and tea markets.

Our previous expeditions have been invaluable, offering profound insights into the intricate farming and trading practices within the rich origins of Sri Lanka and India. These journeys provided an unparalleled opportunity for our team to glean wisdom about the current state and future projections of the coffee and tea industries in these regions. We deeply treasure the experiences shared and the wealth of knowledge imparted during our travels, thanks to the warm hospitality extended by everyone we encountered.

From the verdant landscapes of Sri Lanka's Tea Estates to the vibrant and tightly-knit coffee communities in India, our passage through these extraordinary lands have always been incredible.

We look forward to visiting our supplier partners, and continuing to foster long standing relationships and memories.

Keep an eye out for updates from our trip this coming month.

PUBLIC HOLIDAY CLOSURE

Dear Valued Customers,

Please be advised that our office will be closed on Friday the 26^th of January, due to the Australia Day Public Holiday.

There will be no despatches on this day. Please ensure your orders are placed by 12:30pm on Thursday the 25^th January, for despatch on Monday the 29^th of January.

If you have any queries, please contact your Bennetts Account Manager, or our office on (03) 9853 0328

Happy Roasting,
The Bennetts Team