Coffee Prices to Stumble After Surging 30% in 2021

January 28th, 2022 IndexBox Leave a comment

IndexBox has just published a new report: ‘World – Coffee (Green) – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

Coffee prices remain highly volatile. In 2022, the average annual price for Arabica is forecast to decline thanks to expected production growth, while Robusta price will go up on skyrocketed demand from consumers, preferring cheaper alternatives to more expensive counterparts.

Key Trends and Insights

In 2022, the coffee price for Arabica is forecast to drop by about -2% y-o-y to $4.2 per kg, while Robusta will rise by 2% y-o-y to $2.0 per kg, the World Bank’s October forecast states. Expected production growth in Brazil is to push Arabica prices down. The price increase for Robusta is caused by heightened demand after many consumers began to seek cheap alternatives to more expensive Arabica.

The average annual price for Arabica coffee rose by 36% y-o-y to $4.51 per kg in 2021, while Robusta went up by 31% y-o-y to $1.98 per kg over the same period. The average monthly price in December 2021 reached $5.91 per kg for Arabica and $2.48 per kg for Robusta.

Brazil, the world’s largest supplier of coffee with a 35% share of global exports, shipped 1.7M tonnes of coffee abroad from January through September 2021, which was +5.8% higher than in the same period of 2020. In monetary terms, Brazil’s coffee exports totalled $3.95B, increasing by 17% compared to the same period a year earlier. The average export price for Brazilian coffee jumped from $2.10 per kg in January to $2.77 per kg in September 2021.

Global Coffee Exports

In 2020, global exports of coffee in its unroasted (green) form declined modestly to 6.7M tonnes, approximately reflecting the previous year. In value terms, supplies expanded to $16B (IndexBox estimates).

Brazil was the key exporting country that supplied 2.4M tonnes of coffee abroad, approx. 35% of global volume. Viet Nam (1,208K tonnes) occupied an 18% share (based on tonnes) of total exports, which put it in second place, followed by Colombia (10%), Indonesia (5.6%) and Uganda (4.9%). Ethiopia (231K tonnes), Peru (213K tonnes), Germany (211K tonnes), India (206K tonnes), Guatemala (189K tonnes), Nicaragua (149K tonnes) and Mexico (105K tonnes) followed a long way behind the leaders.

In value terms, Brazil ($5B) remains the largest green coffee supplier worldwide, comprising 31% of global exports. The second position in the ranking was occupied by Colombia ($2.4B), with a 15% share of total shipments. It was followed by Viet Nam, with a 12% share.

Top Largest Coffee Importers

In 2020, the U.S. (1.3M tonnes) and Germany (1.1M tonnes) represented the major importers of coffee in unroasted form across the globe, together mixing up 37% of total volume. Italy (565K tonnes) and Japan (390K tonnes) accounted for a further 15% of global international purchases. Spain (287K tonnes), France (229K tonnes), Russia (198K tonnes), Switzerland (180K tonnes), the Netherlands (174K tonnes), South Korea (157K tonnes), the UK (156K tonnes), Belgium (146K tonnes) and Poland (128K tonnes) occupied relatively small shares of the total volume.

In value terms, the largest green coffee importing markets worldwide were the U.S. ($4.2B), Germany ($2.6B) and Italy ($1.2B), together accounting for 45% of global purchases. These countries were followed by Japan, Switzerland, France, Spain, the Netherlands, South Korea, the UK, Russia, Belgium and Poland, which together accounted for a further 30%.

Source: IndexBox Platform

Archives, EU Trade, Global Trade Daily, News

Global Decaffeinated Coffee Trade Falls with Reduced American Purchases

October 22nd, 2021 IndexBox Leave a comment

IndexBox has just published a new report: ‘World – Decaffeinated Coffee – Market Analysis, Forecast, Size, Trends And Insights’. Here is a summary of the report’s key findings.

Global decaffeinated coffee exports dropped from $1.6B in 2019 to $1.5B in 2020. Germany remains the world’s largest supplier, accounting for 48% of the total decaffeinated coffee exports in 2020. Last year, Germany saw a decrease in coffee exports, as its major trade partner, the U.S., had reduced the purchases. The average export price for decaffeinated coffee jumped by +5.6% y-o-y to $4,618 per tonne in 2020. The U.S., Spain and the Netherlands continue to lead in global decaffeinated coffee imports.

Global Decaffeinated Coffee Exports

Global decaffeinated coffee exports dropped to 319K tonnes in 2020, with a decrease of -14.3% compared with the year before. In value terms, decaffeinated coffee exports reduced from $1.6B in 2019 to $1.5B (IndexBox estimates) in 2020.

Germany constitutes the major exporter of decaffeinated coffee in the world, with the volume of exports amounting to 153K tonnes, which was approx. 48% of total exports in 2020. In Germany, decaffeinated coffee exports declined by -2.6% over the last year.

Viet Nam (24K tonnes) held a 7.5% share (based on tonnes) of total exports, which put it in second place, followed by Switzerland (7.4%), Spain (6.6%), Canada (5.9%) and Colombia (5.1%). Mexico (10K tonnes) and France (7.7K tonnes) occupied a minor share of total exports.

In value terms, Germany ($480M) remains the largest decaffeinated coffee supplier worldwide, comprising 33% of global exports. The second position in the ranking was occupied by Switzerland ($219M), with a 15% share of global exports. It was followed by France, with a 9.1% share.

In 2020, the average decaffeinated coffee export price amounted to $4,618 per tonne, picking up by +5.6% against the previous year. Prices varied noticeably by country of origin. The country with the highest price was France, while Viet Nam was amongst the lowest. In 2020, the most notable rate of growth in terms of prices was attained by France, while the other global leaders experienced more modest paces of growth.

World’s Largest Importers of Decaffeinated Coffee

The U.S. remains the largest importing country with an import of about 101K tonnes, which accounted for 41% of total imports. In 2020, the U.S. reduced its purchases by -7.8% against the previous year. Germany was the largest supplier of decaffeinated coffee to the U.S. last year.

Spain (34K tonnes) ranks second in terms of the total imports with a 14% share, followed by the Netherlands (5.6%) and Switzerland (4.6%). France (11K tonnes), Italy (10K tonnes), the UK (9.5K tonnes), Canada (5.7K tonnes), Saudi Arabia (4.1K tonnes), Mexico (4K tonnes) and South Korea (3.9K tonnes) held a minor share of total imports.

In value terms, the U.S. ($411M) constitutes the largest market for imported decaffeinated coffee worldwide, comprising 33% of global imports. The second position in the ranking was occupied by Spain ($121M), with a 9.8% share of global imports. It was followed by France, with a 7.7% share.

Source: IndexBox Platform

Archives, Global Trade Daily, Imports/Exports

Colombia Traviesa Harvest Report: La Niña Reduces Yields As Prices Soar

May 18th, 2021 Jennifer Poole Leave a comment

The previous 12 months have been among the most stable and profitable that the Colombian coffee-producing industry has witnessed for more than a decade. The internal buy rate offered to producers by the Federacion Nacional de Cafeteros de Colombia (FNC) reached new highs between Q1 and Q2 in 2020 and has stayed there ever since.

Meanwhile, there were favorable weather conditions in the crucial run-up period prior to last year’s main harvest, which helped to produce strong yields and high-quality beans. The high prices and strong yields created a much-needed windfall for many farmers in 2020, who only six months prior to this were gravely concerned about the potential impacts of COVID.

So as we enter the smaller mid-season harvest, known as the traviesa, I’ve spoken to a number of producers in Colombia to understand the expectations for this harvest and the factors that will shape it.

A Quick Look at Prices

A large proportion of commercial coffee producers, particularly those with small and medium-sized farms, sell their beans either to local cooperatives or to the FNC, rather than on the open market. These trade bodies offer producers an internal buy rate, which is a guaranteed price at which they will buy crops.

The internal buy rates offered to producers can fluctuate daily and are determined by a number of factors – beyond simply what the current open market rate is for coffee in the global commodity markets. While the end price does of course have a big impact, other significant factors include the strength of the dollar against the peso, and the push and pull between supply and demand specifically with regards to the FNC and cooperatives having to fill futures contracts.

April 2020 was the previous peak of the buy rate offered by the FNC – with prices per carga (125kg of parchment coffee) at one point hitting COP 1,315,000(USD $352). And while the price has naturally fluctuated a little since, it’s reached new heights in April 2021, with COP 1,340,000 (USD $359) being the highest ever daily price offered to growers.

As Manuel Londono of Las Brisas told me “the price has been very high [since the beginning of the harvest], with cooperatives and the FNC now offering incentives to growers to sell to them.”

The FNC buy rate also acts as an unofficial peg for prices offered by local cooperatives and private buyers. Sara Marquez of El Deseo explained that “the Cooperativa Los Andes generally pays a little more than the FNC, [and so far during March of this harvest] the price has been good, between COP 1,150,000 and COP 1,200,000, with private buyers paying slightly above this still – depending on the quality.”

A Very Wet Wet-Season

Colombia’s coffee-growing regions have experienced far more rainfall than usual this year. This is due to the effects of La Niña – an irregular climate event that started last September and is forecast to continue until the middle of 2021 – which causes higher than average rainfalls in the region.

This is going to negatively impact yields, as reduced levels of sunlight during prolonged rainy periods limit growth. Sara Marquez of El Deseo explained that, “last year we had a very big harvest in volume and quality, but because of the rain, there has not been a good flowering this year.

But a decrease in sunlight isn’t the only problem that the prolonged rains bring. As Paula Concha of Finca Santa Helena told me “these precipitations also decrease the availability of nutrients since the fertilizers are lost by leaching and runoff and the plants close their absorptive processes and therefore the quality of the bean is also affected.”

However, La Niña does have one silver lining in that the rains have kept the destructive crop beetle la broca at bay, with every grower I spoke to confirming that this has not been an issue during the harvest.

A Hangover From the Last Harvest

Aside from the impact of La Niña, yields during this traviesa are being curtailed for another reason; the impact of last year’s main harvest. This was a bumper harvest for many producers, thanks to favorable weather conditions across the country, with just the right amount of rains, followed by a good dry season.

As Elkin Arcila of ASCAFE explained, “This traviesa is smaller in volume than last year’s – at the end of last year we had a very good harvest so the plants didn’t have the time to recover in time for this harvest.”

This was echoed by Sara Marquez of El Deseo who said “the traviesa production is reduced this year as coffee behaves in a similar way to a bi-annual crop and last year we had a very big harvest in both volume and quality.”

La Niña is no doubt compounding this, with heavy rains and a reduction in sunlight further reducing the growth of plants that haven’t had time to recover from last year’s main harvest. But unlike the impact of La Niña which is being felt across the industry, the impact of the last harvest is only being felt by those producers who had bumper yields. For others, this will not be an issue.

Competition for Workers

A major concern for many smallholders during last year’s traviesa was getting enough workers to complete the harvest, due to COVID-related travel restrictions making it difficult for workers to travel to farms. However, among the producers I spoke with, none of them cited COVID as a major concern this harvest with regards to sourcing workers, as while there are still some travel restrictions and lockdowns or curfews, they are far less onerous than this time last year.

But that’s not to say that labor shortages aren’t causing headaches this year as well. Competition for workers within the wider agricultural industry has been fierce this year. Most notably, the stiffest competition is coming from hass avocado producers, as production is now booming in Colombia, thanks to recent trade deals with the US and China.

As Elkin Arcila of ASCAFE Tamesis explained “the workforce has been limited, with hass avocado harvesting affecting our recruitment.” Inevitably, this is leading to higher wages for workers, but the general consensus is that these wages have dropped slightly from last year, when COVID-restrictions were being felt far more severely and therefore limiting the mobility of labor.

Looking Ahead to the Main End-of-Year Harvest

The traviesa is usually a sign of what’s to come in the main harvest each year, which takes place between November and January. In which case, the outlook is mixed.

On the one hand are prices. The consistently high prices since the beginning of last year have defied expectations. There was a sharp jump in prices at the beginning of the pandemic, in response to the large gains the dollar made against the peso. However, even as the peso has recovered some of its value, prices have remained high and as of the end of April 2021, have reached record highs once again.

It would be impossible to predict with certainty if prices will remain this buoyant by the time the year’s main harvest arrives. However, if the effects of la niña continue well into the second half of the year, then production could be significantly down in Colombia’s neighbor Brazil – the world’s largest coffee exporter. There, they face the opposite problem to Colombia – drought. The Brazilian government’s agricultural agency Conab has said the harvest could shrink by a third in a worst-case scenario. A reduction in output anywhere near this would be bound to keep prices high in Colombia.

But on the other hand, low yields could be a feature of the main Colombian harvest too. The increased rains have stunted plant growth, while continued heavy rains would exacerbate the problems being experienced now with poor flowering and the washing away of nutrients. However, it’s far better to be facing uncertainty when you have near-record prices, which thankfully, the industry still has.

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Written by Jennifer Poole, the co-founder of Colombian specialty coffee supplier Those Coffee People. Based in Medellín, Colombia, Jennifer spends her time traveling to remote towns and villages in search of the best specialty coffee the country has to offer.

Archives, Global Trade Daily, International Trade

U.S. Imports of Roasted Coffee Substitutes Posted Record Growth to Reach $6.5M in 2018

October 24th, 2019 IndexBox Leave a comment

IndexBox has just published a new report: ‘U.S. – Roasted Chicory And Other Roasted Coffee Substitutes – Market Analysis, Forecast, Size, Trends And Insights’. Here is a summary of the report’s key findings.

The revenue of the roasted coffee substitutes market in the U.S. amounted to $164M in 2018, surging by 12% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). The market value increased at an average annual rate of +1.5% over the period from 2013 to 2018; the trend pattern remained consistent, with only minor fluctuations over the period under review. The most prominent rate of growth was recorded in 2017 with an increase of 13% y-o-y. Over the period under review, the roasted coffee substitutes market attained its maximum level in 2018 and is likely to continue its growth in the near future.

Market Forecast 2019-2025 in the U.S.

Driven by increasing demand for roasted coffee substitutes in the U.S., the market is expected to continue an upward consumption trend over the next seven-year period. Market performance is forecast to decelerate, expanding with an anticipated CAGR of +0.1% for the seven-year period from 2018 to 2025, which is projected to bring the market volume to 40K tonnes by the end of 2025.

Production in the U.S.

In 2018, approx. 38K tonnes of roasted chicory and other roasted coffee substitutes were produced in the U.S.; increasing by 7.1% against the previous year. The total output volume increased at an average annual rate of +1.6% over the period from 2013 to 2018; the trend pattern remained consistent, with somewhat noticeable fluctuations being recorded throughout the analyzed period. The growth pace was the most rapid in 2018 with an increase of 7.1% year-to-year. In that year, roasted coffee substitutes production reached its peak volume and is likely to continue its growth in the immediate term.

In value terms, roasted coffee substitutes production stood at $170M in 2018. The total output value increased at an average annual rate of +3.9% from 2013 to 2018; the trend pattern indicated some noticeable fluctuations being recorded in certain years. The growth pace was the most rapid in 2014 when production volume increased by 19% y-o-y. Over the period under review, roasted coffee substitutes production reached its maximum level at $201M in 2017, and then declined slightly in the following year.

Exports from the U.S.

In 2018, the exports of roasted chicory and other roasted coffee substitutes from the U.S. totaled 172 tonnes, jumping by 71% against the previous year. In general, roasted coffee substitutes exports, however, continue to indicate a drastic descent. The most prominent rate of growth was recorded in 2018 with an increase of 71% y-o-y. Over the period under review, roasted coffee substitutes exports attained their peak figure at 442 tonnes in 2015; however, from 2016 to 2018, exports stood at a somewhat lower figure.

In value terms, roasted coffee substitutes exports amounted to $759K (IndexBox estimates) in 2018. In general, roasted coffee substitutes exports, however, continue to indicate a drastic descent. The most prominent rate of growth was recorded in 2014 when exports increased by 67% year-to-year. Over the period under review, roasted coffee substitutes exports reached their maximum at $2.4M in 2015; however, from 2016 to 2018, exports remained at a lower figure.

Exports by Country

China (27 tonnes), Canada (18 tonnes) and Viet Nam (16 tonnes) were the main destinations of roasted coffee substitutes exports from the U.S., together comprising 35% of total exports. China, Hong Kong SAR, France, Guyana, Russia, Aruba, Venezuela, Australia, Switzerland and the Philippines lagged somewhat behind, together comprising a further 36%.

From 2013 to 2018, the most notable rate of growth in terms of exports, amongst the main countries of destination, was attained by Switzerland (+134.7% per year), while the other leaders experienced more modest paces of growth.

In value terms, the largest markets for roasted coffee substitutes exported from the U.S. were Russia ($121K), Canada ($108K) and China ($90K), with a combined 42% share of total exports. France, the Philippines, Australia, Venezuela, China, Hong Kong SAR, Switzerland, Aruba, Viet Nam and Guyana lagged somewhat behind, together comprising a further 20%.

Among the main countries of destination, Switzerland (+80.0% per year) experienced the highest growth rate of exports, over the last five years, while the other leaders experienced more modest paces of growth.

Export Prices by Country

In 2018, the average roasted coffee substitutes export price amounted to $4,408 per tonne, reducing by -25.4% against the previous year. Over the period from 2013 to 2018, it increased at an average annual rate of +3.0%. The most prominent rate of growth was recorded in 2014 when the average export price increased by 25% year-to-year. Over the period under review, the average export prices for roasted chicory and other roasted coffee substitutes reached their maximum at $5,911 per tonne in 2017, and then declined slightly in the following year.

There were significant differences in the average prices for the major foreign markets. In 2018, the country with the highest price was Russia ($18,124 per tonne), while the average price for exports to Guyana ($42 per tonne) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of prices was recorded for supplies to the Philippines, while the prices for the other major destinations experienced more modest paces of growth.

Imports into the U.S.

Roasted coffee substitutes imports into the U.S. totaled 2K tonnes in 2018, increasing by 21% against the previous year. The total import volume increased at an average annual rate of +7.6% over the period from 2013 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded in certain years. The pace of growth was the most pronounced in 2015 with an increase of 23% against the previous year. In that year, roasted coffee substitutes imports attained their peak of 2K tonnes. From 2016 to 2018, the growth of roasted coffee substitutes imports remained at a lower figure.

In value terms, roasted coffee substitutes imports totaled $6.5M (IndexBox estimates) in 2018. The total import value increased at an average annual rate of +7.0% over the period from 2013 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded in certain years. The most prominent rate of growth was recorded in 2018 when imports increased by 22% y-o-y. In that year, roasted coffee substitutes imports attained their peak and are likely to continue its growth in the immediate term.

Imports by Country

In 2018, France (905 tonnes) constituted the largest roasted coffee substitutes supplier to the U.S., with a 46% share of total imports. Moreover, roasted coffee substitutes imports from France exceeded the figures recorded by the second-largest supplier, Thailand (350 tonnes), threefold. The third position in this ranking was occupied by India (218 tonnes), with a 11% share.

From 2013 to 2018, the average annual growth rate of volume from France totaled +4.7%. The remaining supplying countries recorded the following average annual rates of imports growth: Thailand (+174.1% per year) and India (+27.6% per year).

In value terms, France ($1.6M), Thailand ($1.3M) and Germany ($1.1M) appeared to be the largest roasted coffee substitutes suppliers to the U.S., with a combined 63% share of total imports.

Thailand (+237.8% per year) experienced the highest rates of growth with regard to imports, among the main suppliers over the last five-year period, while the other leaders experienced more modest paces of growth.

Import Prices by Country

In 2018, the average roasted coffee substitutes import price amounted to $3,303 per tonne, remaining stable against the previous year. In general, the roasted coffee substitutes import price, however, continues to indicate a relatively flat trend pattern. The growth pace was the most rapid in 2016 when the average import price increased by 22% y-o-y. The import price peaked at $3,393 per tonne in 2013; however, from 2014 to 2018, import prices remained at a lower figure.

There were significant differences in the average prices amongst the major supplying countries. In 2018, the country with the highest price was Germany ($10,404 per tonne), while the price for France ($1,766 per tonne) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of prices was attained by Thailand, while the prices for the other major suppliers experienced more modest paces of growth.

Source: IndexBox AI Platform