September 2017

Green Coffee Quality Report

Review and Expectations


Brazil:  Harvesting is virtually finished. Some high and cool lands are still under the final process but the picking is practically all done. Farmers are now under cleaning procedures to leave coffee trees ready to get the flowering. By the way, many photos of flowering are circulating. Indeed those areas that got good rains 7 to 10 days ago got good flowering. Parana and Alta Paulista got the main flowering with about 70% coverage. Mogiana also got reasonable rains therefore got flowering that covered at least half of the tree potential. However South of Minas, Cerrado and Zona da Mata areas had irregular or no rains at all therefore got small or no flowering yet. Those areas that had good flowering coverage will need rains soon to confirm the fixing. The other areas that received few rains and irregular flowering will need good rains as well to trigger flowering. Weather lately has been ideal for natural drying thus improving cup quality at the end of the season. CONAB released their final 2017 crop estimate. They reemphasize that total crop is at 44.7 Mio. bags planted into 2.2 Mio. hectar. Arabica production in their survey was 34.07 Mio. bags while Conilons was 10.77 Mio. bags. Although usually CONAB´s figures are on the low side of the estimates, this forecast is not that far from some other available private estimates.
Brazil’s roaster association (Abic) stated that its members are having difficulty obtaining raw material due to high levels of beans affected by the coffee-berry borer, forcing them to buy higher quality beans. Political scandals are in the spotlights with many top politicians been accused by corruption acts in all levels. From ex-president Lula till president Termer and ministers.

Colombia: The flow of parchment is about to increase now by every week. The Mitaca has finished and pickings of the main crop are 15 days away. Main crop flow starts slowly.

Costa Rica: The weather retains its spot in the headlines, flooding reported in San Jose without significantly affecting the coffee areas, but supporting pest breeding conditions. Business is slowing down, producers not in a rush to sell and are not attracted by prices.
The Costa Rican coffee crop in the HB region is at least 1 month behind due to late flowering experienced this year by end of March 17. Also, a fact is that this rainy season has been stronger (in volume and intensity) than the previous 3 seasons which have slowed or delayed the proper ripening of coffee cherries. There are some players that used to sell coffees for late shipment each crop and these players always count on the entrance of the new crop to facilitate the mixing and exporting of coffees. However they have not been delivered with their contracted purchases from 3rd parties mills / coops or their wet/dry mills are not receiving the normal amount of early pickings this crop 17/18, to properly support those late crop 16/17 shipments. Costa Rica coffee is an every year case study with different situations and complications each harvest. However and to the contrary of their neighboring countries in the Central American region, Costa Rica always sells all its coffee; at least so far…………………….
About 28% of the new crop are already committed. ICAFE released the 2nd. crop estimate raising it by 13.6% over the last estimate to 1.63 Mio bags.

Mexico: The 16/17 Crop estimate remains at 3.25 Mio. bags, quality has been very good compared to last year with nice bean size. Renovation is completely visible this year as well, with government projects financing seeds and nurseries.

Nicaragua: The crop is already coming in the lowest part of the country (ej Waslala). If it keeps on raining, the last phase of ripening might be slower. Indeed, the country is still receiving daily heavy rains. The accumulated daily mm which used to be spread during the day is now pouring in 45 min. There is enough luminosity though in the farms and producers are busy regulating shade in order to avoid an increase of humidity which would favor the development of rust and fungus.
Two concerns for this crop now are:
1. The workforce. As exports have excreased over the past couple of crops, there are not enough pickers around. This translates in higher costs of harvesting for producers.
2. Roads up in the country side are in bad shape due to the heavy rains and some regions have been isolated. Farmers have already sold abt.10-12% of their and production for 17/18 is estimated at 2.30 Mio. bags which is similar to what we have seen in 16/17.

Honduras: The crop looks promising, fueling expectations. First beans are coming in from the lowest regions. Weather continues to be favourable for the new crop.

2016-2017 HARVEST
At this time activities consist of weed control and fertilization.There are still inventories of parchment coffee in the hands of producers, intermediaries and some exporters.
2017-2018 HARVEST
Harvesting in lower producing areas is in full swing. The first deliveries from the lowest areas are expected to arrive in a couple of weeks although current price levels don’t force producers to hurry. Very strong rains in the southern regions causing some damages.
According to ANACAFE’S specialized staff, the production forecast at this time for the 17/18
crop is 4 Mio. quintals, another estimate will be made at the end of the month.
According to ANACAFE, 70% of coffee plantations in Guatemala are affected by Roya.

Peru: The action is now in the husbandry side as trading remains quiet. High altitude harvest keeps on going on in Cajamarca. San Martin and the center is over. Peru s expecting to produce 5 Mio. bags this year, a 13% more than previous year.

Nicaragua: Exports of 16/17 continue to be strong with July reported at 22% higher. Low grades are still available in good amounts in the country and in the hands of both, intermediaries looking to sell it and traders carrying it. Climate has been favorable for next cycle with regular rains. Young and renovated parcels are in very good shape though, especially in Jinotega area.

El Salvador: Farmers have sold approximately 18-22% of the 17/18 crop. Production for 17/18 is estimated at 0.7 Mio. of 60kg. this represents an increase of 10% from the previous crop. In general the 17/18 productions is developing well with better flowering at farms, a good raining season.

Rwanda: With the 330,000 bag 16/17 crop behind us, the 17/18 crop is estimated to be down to 250,000 bags mostly due to seasonality/down cycle. Weather has been good and quality expectations have improved. Logistics remain good and politics remain stable with Kagame firmly in power (official results give him 98.79% of the votes!)

Ethiopia: Plenty of coffee is available for sale at ECX, but not much is changing hands. Similar situation on the export market which is almost at a complete standstill with no new export sales being registered. Prices for naturals continue at a high premium to their seasonal lows at ECX. While the expectation is there that they will be trading lower as arrivals continue to flow, most exporters are currently struggling to cover their shorts at decent levels.

Kenya: The country is currently in the tight grip of election fever - the repeat polls are set for Thursday 26th October and is draining the energy and meagre resources out of an already weak economy. Business has noticeably slowed down and is expected to remain on a low level until the new year. The effects of the drought on food prices and general agricultural production (incl. export crops like coffee and tea) are considerable. Harvesting of the late crop has started, especially in Western Kenya, and is expected to flow into the market in November. The anticipation is however for a smaller production both from western and central areas thanks to an off-cycle and drought. Reports of continued planting of new seedlings in western Kenya are however providing some hope and optimism for improved production in following seasons. Rains have been forecasted from the middle of October and are expected to be heavy, with landslide alerts already given for the slopes of Mt. Kenya. Any rain would be a real blessing. Logistics appear to continue smoothly. The transition from one railway operator to the parastatal seems complete but not without issues, at least containers are getting to port and on to the ships in good time !

Tanzania: The weather continues to be favorable for coffee harvesting and drying across all the regions.

Internal flow in Mt. Elgon is steadily increasing and the crop is in full swing. The weather is generally still wet but with enough sunny intervals to sundry the parchment properly.
Prices continue to be very firm, especially for ordinary quality coffees. Volume and quality are picking up as a result. Drugar prices are very firm at the moment as there is fierce competition in the field for the little good quality available. The internal flow in Rwenzori is starting to improve on both, Drugars and Parchments. The harvest in Erussi is gaining momentum however at a slow pace
Robusta: The Central crop is developing normally and will start in October. Central crop is about to start. Processing units are waiting for the 1st deliveries. Government is ready to actively monitor the drying process.

India: Off-season with very little activity. Heavy rains in all coffee growing regions helped to catch up with the below average rainfall of the last months. Exporters focus on emptying their warehouse keeping differentials attractive. New crop prices vary widely.

Mixed weather conditions with temperatures between 24–27 degrees which is good for final
stages of cherry development. Growing of cherries is in the last steps. Some areas are expected to see the harvest starting late October.

Indonesia: The local situation keeps dominating the market. Domestic industry keeps on buying and therefore internal prices remain high with the consequences that FOB market is too expensive. Weather so far favourable for the new crop and exporters hear that the low land had a good flowering. The season moves towards to the wet season and rains are expected to start in October.

PNG: Coffee activity remains subdued in most parts of the highlands. Cherry activity in the
Western province has slowed down strongly, some wet mills will close operations during the quiet off-season. Following an acute off-cycle year exporters now see additionally an early finish of the season. There are expectations of a small increase in flow during November and December. Intermediary suppliers have to travel into remote, outlying areas to source the small volumes available.

Vietnam: The weather in the coffee belt has been favorable for the crop so far. Good rains have well moistened soil, supplied plentiful water to lakes, streams, rivers and benefited to cherry growth. The vietnamese crop 17/18 is expected to increase 10% and can be harvested a bit early at the beginning of Nov instead of middle of Nov as previous years. Thefirst 1-3% of the cherries have been harvested but quality is low. The North has been hit by typhoon Doksuri.

Hawaii: Coffee was introduced to the Hawaiian Islands in the early 19th. century on the island of Oahu. The first plants came from Brazil and were planted in the Manoa Valley. The bourbon variety was brought to the Big Island of Hawaii around 1828, followed by Typica in the early 1890s. Today, coffee is produced on five islands – Kauai, Oahu, Molokai, Maui, and Hawaii. Coffee is the fifth largest crop in the state. However, Kona coffee is the one that garners the most fame. Kona coffee is produced in the north and south Kona districts of the Big Island. This area is about 30 miles long and 2 miles wide, and is situated on the slopes of the Hualalai and Mauna Loa volcanoes.  Only coffee grown in this area can be called “Kona” coffee.  In recent years, the coffee berry borer (CBB/broca) has appeared on the Big Island and in the Kona district. This has created big challenges for the coffee industry in Hawaii. While coffee prices remain high, the infestation varies from one farm to the next. Roughly 600+ farms produce coffee which can be classified as Kona and the average farm size is 2-3 acres (roughly one hectare), with a small number of larger estates with 50 acres or more. Annual Kona production is around 15120 bags of 60kg. Most of Kona is the Typica variety, which uses the washed process. All coffee is handpicked and dried on patios or mechanical dryers. Elevation ranges from 500 to 2500 masl. The harvest runs from August to February. Latest figures for 2016/7 production estimate it to be at 36.4 million lbs. of cherries, up 5% on the previous year.

Jamaica: The Coffee Industry Board (CIB) of Jamaica, like the FNC in Colombia, grades and cups every batch of Jamaica Blue Mountain (JBM) before it is put into barrels for export. On the vertiginous slopes of Jamaica, a significant portion of the crop is smallholder coffee, although there are also some very famous estates. It is always worth checking if the coffee sold is coffee grown on the estate or whether the coffee has been grown near the state and processed by it. Often brand names and estate names can be mixed together. Most of the coffee on the island is Typica, although more and more Geisha has been planted as farmers want to capture more value with this variety. The harvesting period is long, ranging from October to June. Good quality coffee is handpicked, pulped, washed and then sun dried. Coffee typically rests in parchment for at least 8 weeks before being dry milled and sent to the CIB in Kingston for quality checks before export. The coffee is packed in barrels of 15, 30 or 70kg size.

Various: Indian instant coffee exports continued its strong performance. Total permits issued for Indian instant coffee exports till 22th Sep were estimated at 38,057 MT, which is about 111% increase over previous season.

Sources: Volcafe, Flavour, Atte, ICONA, Wakefied. Taylor Winch

Herbst 2016

Carlo Delfs im Interview für den Lyreco Pausenmanager 3/2016:

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