We are officially in Autumn, and with the fluctuating hot and cold days in Melbourne, we cannot decide whether to have an iced coffee or a latte!
 
This month we have lots in store, from the newest trends in the coffee market, origin updates and the latest in Bennetts International travel.
 
So, grab a cup of your favourite brew, and join us as we explore the world of coffee.


ORIGIN UPDATE - GUATEMALA 

A timely visit to Central America’s Guatemala by Tom Bennett, was a great chance to meet some export partners, cup some fresh crop coffees and understand some of the factors facing the coffee industry in 2023.

The first 2 weeks of March were a myriad of meetings with exporters in Guatemala City, catching a local boat (Lancha) across Lake Atitlán to meet producers, and bouncing around in the back of a pick-up through the mountains of Santa Rosa.

In general, the industry was concerned with two main factors; a lack of labour and climate troubles. Guatemala saw up to 1 million (or 7% of the population) migrate north in search of better opportunities during 2022. This has resulted in a lot less labour available and willingness to pick coffee. Normally, 3-5 passes of a coffee tree are necessary, however pickers only did 2-3 this season. This caused a lot more over and underripe cherries to be collected which reduces qualities and quantities. AnaCafe, the Guatemalan industry association, estimates this has reduced volumes to the tune of 20% year on year.

2022’s climate also delayed the harvest season by 6-8 weeks, depending on the region. This was attributed to heavy rains that slowed down maturation of the fruits. Noticeably, it has increased physical defects, but more importantly caused a significant short squeeze on the internal availability of coffee to fulfil large roaster commitments (Starbucks, Dunkin’, Nespresso etc.). This has driven the price hike over the past few months in comparison to the other Latin American milds.

On the cupping table, Tom had the pleasure to taste some great coffees. Most notably was this season’s El Boquerón natural which showcased strawberries and cream with a dark chocolate and caramel finish. Additional to that, Tom cupped some individual producer lots from Huehuetenango that had stone fruits, cane sugar and florals throughout!

For early looks and expressions of interest in these coffees, please contact your Bennetts Account Manager. 

Red coffee cherries being harvested, Lake Atitlán Guatemala 
 

SPECIALTY COFFEE ASSOCIATION (SCA) EXPO

Scott, Jenny, and Alex Bennett from our office will be jet setting off to the USA this month to attend the SCA in Portland. At the Expo the Bennetts team will be engaging in meetings with a range of our suppliers from South and Central America, Asia, and Africa.

This will be a great opportunity for Bennetts to gain firsthand knowledge from our suppliers regarding the current and future crop/seasons, as well as share the challenges and developments occurring in the Australian coffee industry.

If you happen to be over that side of the world for the Expo – come and say hi to our team!

                                                                                              
MARKET REPORT

NY C movements and the Brazilian impact

March has seen relatively little movement in the NY C market compared with previous months. Opening at 184.70 c/lb it spent most of the month moving sideways until the end where we saw it fall. It seems market players were tentative and no-one wanted to be the first to take a strong position either way. Good growing conditions and weakening concerns about flooding in Brazil have allowed farmers to get back into the fields and apply pesticides and fertiliser. This has helped to move towards the downside. On the 29^th it broke a key support level and closed below 170 c/lb at 169.70 c/lb. This could signify that prices are set to keep declining over the next week or more as both physical traders and speculative traders position themselves to make the most of the low NY C market.
 
The Robusta market was more of a roller coaster, but as they say, you just gotta ride it. During the middle of the month, it fell to a low of 2023 US$/ MT but then climbed higher later in March. It closed out the 30^th March on 2,216 US$/ MT. Robusta has support after multinational trader Volcafe forecast the global 2023/24 Robusta coffee market would see a record deficit of 5.6m bags. As well as this, Indonesia is forecast to drop to its lowest output in 10 years, due to damage from excessive rainfall across its growing regions.

 
Certified Stocks

Part of the reason for the NY C market remaining stable during March was due to the certified stock numbers keeping steady. As of the 27^th March Arabica stocks were at 747,853 bags and Robusta stocks 75,000 MTs. This figure for Robusta is an improvement on last month’s report (67,000 MTs) which is helping to dampen the Robusta bulls stampede.

 
Commitment of Traders Report

The COT report released on 21^st March showed us that the Commercials have continued their short run and now sit at 46,236 future lots short. The Specs swapped position from the last market report and now they have taken the position of 14,820 future lots long, indicating they are expecting the NY C market to go up. Bear in mind that this was taken from the 21^st March, and since then the NY C has dropped. Those big banks certainly do not always get it right.

 
The Wider Macroeconomic Impact

The Aussie dollar has marginally weakened against the US dollar but has taken no significant movements. The US Dollar managed to hold steady despite that fact that two large US based banks collapsed. The collapse occurred as a result of the US government bonds they held, decreased in value drastically as newly issued government bonds hold a much higher payout rate due to the higher interest rates. The US Federal Reserve (FED) is now caught in a position where it would like to continue to raise interest rates to help curb inflation, but worries that if it does so it may put other large banks in jeopardy. This has helped to tame the hawkishness of the Fed. Will we see Australian interest rates make up some ground as a result of this?

 
 
 
                                                                                                   March 2023 NY C Graph 


 

STAFF UPDATE                        

Just a quick update regarding some staff changes at Bennetts this month. With heavy hearts we are saying goodbye to Marco Roberti who has been a trusted member of our Sales and Purchasing departments for the last 5 years. Marco is embarking on a new journey back home in Italy, and we wish him all the best in his future endeavors. We thank Marco for his hard work and continual support during his time at Bennetts. We are going to miss the laughter and smiles he so effortlessly provided throughout the office (and his tiramisu 😉).

However, we are excited to announce that Dave Rabbich has been guided under Marcos wing the past few weeks, and will be replacing Marco on his departure. Dave has a plethora of coffee knowledge and experience, and is bringing his talents all the way from the UK. Dave previously worked at DR Wakefield as an Account Manager, and we are thrilled to have him on board working in the same capacity. Be sure to say hi if you come across Dave at any events, on the road, or in our office, a wonderful addition to the Bennetts team.

We also have some exciting new members joining our Quality Department. Anne Cooper has recently joined us as QC Technician. Anne has been working in the coffee industry for over 20 years as roaster and QC, and more recently run her own roast consulting business. Anne brings forth a wealth of coffee knowledge and experience and we are ecstatic to have her onboard.

Finally, we welcome Nathan Dimattina to the Bennetts team who has joined us as our Marketing Coordinator. Nathan has amassed a wide range of coffee expertise, and has been working in the industry in various roles over the past 5 years. Whilst completing his studies Nathan is working part time, but we are eager to have him on board full-time commencing in July. We look forward to what Nathan can offer our business in this role and value the work and efforts he has provided us since starting.