Dear Coffee Partner
You may have noticed in the main stream media some talk of international shipping and production issues, we will look closely at current coffee, coffee futures and the major growing countries.
As you are no doubt aware, Omicron is causing significant disruption, in particular global supply chains.
I stated in September 2021 newsletter that we don’t see supply chains stabilizing until at least second quarter of 2022, I still stand by that.
- Manufacturing lockdowns around the world are resulting in raw materials shortages, commodity prices increasing coffee, sugar, cocoa, milk powder & packaging materials.
- Major global shortage of shipping containers causing delays as a result shipping costs have risen dramatically.
- Port lockdowns and restrictions on ships entering ports causing shipping delays 12 & 16 weeks.
Costa Rica is well-known as a very environmental-friendly country. The country's national coffee institute, ICAFE, reports on a series of public and private projects that have substantially reduced greenhouse gas emissions in coffee production. The International Coffee Organization ICO's last official production numbers refer to the 19/20 crop, totaling about 1.5 million bags.
The harvesting activities of the 21/22 crop are well underway and are approaching their end now. First counting and ICAFE's statistics indicate a relatively small crop, surely not exceeding the usual volumes of the past seasons. Logistics continues to be a true challenge. There is a general shortage of food-container supplies.
The election of a new attorney general is going to take place. This is a powerful position in fighting corruption and drug trafficking. The current attorney general has been classified as being undemocratic and corrupt. The international community follows this election closely, hoping for a more adequate candidate.
The harvest is progressing well and is approaching its peak. Good amounts of coffee has been picked in all major coffee producing regions of Huehuetenango, Antigua, San Marcos, Cobán, Atitlán, Nuevo Oriente, Acatenango, and Fraijanes.
Nonetheless, it seems complicated to find enough hand-picking workforce to collect all the cherries. With almost ideal weather conditions and a high-price situation, everybody is trying to collect as much coffee as possible, originating a good competition for hiring coffee pickers. The forecasted production for the 2021/22 crop moves around 4 million bags. Guatemala is undoubtedly no exception to the complicated and tedious logistical situation around the globe. Delays to be expected.
A fistfight between the main political parties has started in Congress right before the official introduction of the new president-elect Xiomara Castro. The swearing-in ceremony is planned to take place on today.
Production statistics for the 21/22 crop range between 5.9 to 6 million bags. The National Coffee Institute (IHCAFE) has updated the coffee export estimates for the 21/22 crop by 2% to an expected total of 5.8 million bags. This is pretty much in sync with the exported amount of the previous season.
The harvest is progressing slowly but steadily. Some beans are still maturing on the trees. Warm and dry weather conditions help fastening the ripening process. It's pretty hard to access appropriate containers, and the logistics are slow and complicated.
President-elect Daniel Ortega has been officially sworn–in on January 10th for his fourth consecutive term in office. The election process was highly controversial as all other aspirants were either jailed or fled the country, fearing for their lives, gotta love Nicaragua! The United States and the European Union have imposed sanctions on the newly elected government.
All major coffee-producing regions in Nicaragua, Nueva Segovia, Matagalpa, Jinotega, and Madriz, are well underway with the current coffee harvest. Expectations for the new crop range around 2.6 and 2.8 million bags. So far, logistical operations are running relatively smoothly, although it is expected that complications will arise once more coffee volume needs to be shipped in particular with the sanctions imposed by the United States and the European Union.
No change in Brazil situation the world's largest producer of coffee beans is in drought, with a lack of rainfall in Brazil this is the worst dry spell in 91 years. The National Weather System (NWS) issued a water emergency alert for Brazil the lack of rain may reduce coffee tree flowering and further curb coffee yields. Water availability in the soil in Minas Gerais is already at critical levels between 0% and 30% when the minimum level for crop development is 60%. The international coffee exchange has seen Brazilian arabica tripling in price in the last 8 months.
Until next time, stay safe, stay caffeinated
Green Commodities Pty Ltd
King Carlos® Coffee Rosters