Hot Espresso Goss
The market is a yo-yo at the moment…from lows last month of sub $1.50 / Lb, the market has erratically traded all the way back to $1.90 or more – With trading ranges varying widely from day to day, in mainly thin volumes
It’s a mugs game……but certainly one, for the time being, where coffee and the coffee trade have little influence…
Drivers today are far distant and from the reality of the coffee world….It’s down to macro economics…the € zone crises and general investor and speculator concerns around a basket of soft’s. For example, a recent spike in the coffee market, was driven by concerns over weather conditions in the US grain growing regions…!
What we do know is that exceptional rains in Brazil have massively affected this year’s crop quality…The monsoon type conditions physically ‘knocked off’ up to 20% of this year’s cherries….and instantly made a fine or good cup a bad cup! We can therefore expect differentials for the better qualities to firm and increase!
At the same time Reuters reports that Brazilian yields per hectare have now officially doubled in the last 10 years to 22 60 kilo bags / hectare. Many will argue that prices below $1.50 / Lb will undo all the good husbandry work which has delivered this improved yield… the pragmatists may however view increased yields, as simply a precursor to a pre eminent Brazil, fuelling rapidly growing global coffee demand whatever the price…!
We also know that Robusta quantities are up and this is a surge lead by Vietnam – forecast now to produce plus 25 m bags this year – All for sale to a ready Western industrialised market hungry for Robusta in soluble and cheaper fresh coffee articles
This was exemplified by the recent trade gossip that Nestle has fixed 2013’s Robusta requirement for ‘Gold Blend’ with Vietnam Grade 2’s at +$150/ Mt over the terminal market…Interesting vibes and an indication of the roller coaster ride the risk averse corporates fore see over the coming months!
I suppose if you look at USDA forecast stocks piles…even despite a record 2012 > 13 crop of 148m bags ( +7% year on year) they still estimate stock piles by end September @ 24.1 m bags…. the lowest since 2001!
Link this with the fear that funds will revert to their earlier 2010/11positions – that corresponds to 10 m bags of coffee – and we start to see how the current over supply sentiment, which has dragged prices down, could quickly flip into a full scale supply scare!
Don’t look to Colombia to bridge the gap anytime soon, still reeling from disease, rains and a disastrous replanting programme, volumes will be pegged at c 7 m bags ( vs recent historical highs of 12.5 m bags) similarly important players such as India at 5.1 m bags and Indonesia at 9.7 m bags are minnows when compared the all conquering Brazilian demigod!
So you know what to do, don’t you dear reader…..? Yes – that is it – precisely nowt… Othan stock up on your Aromo of choice and enjoy perfetto espresso, or filter candy from our Senseo pad range, safe and secure in the knowledge that all the trading and other difficult bits are down to us…all you need to do is prepare and enjoy- hard life eh?!
Guru ( Andy Grelak) writes for Aromo Coffee – They are coffee experts focussed on providing convenient and tasty ways for the caffeine addict to take their medicine. Aromo supplies excellent ESE Coffee pods and superlative Senseo pods, both of which offer the espresso and filter connoisseur a no mess, no fuss, super fresh and environmentally conscious method to make stunning coffee… the guys at Aromo also have a range of Dualit branded capsules which make a brilliant and economic alternative to nespresso capsules