Coffee Market  

After seeing a modest bound from eighteen-month lows last week, things were somewhat stagnant this week coming off a Thanksgiving holiday in the US. Volume was extremely light as many producers and roasters alike are waiting to see how the Brazil crop unfolds in the early part of 2023, and rightly so after the wild volatility we’ve seen over the last couple of years. Industry coverage can hold out until demand becomes clearer but that could change if the bumper crop projections continue to trend downward as news begins to trickle out of Brazil. Differentials remained stable this week with the lack of trading and the only macro-news of note is around worker’s strikes with the US Congress passing a bill to keep the Railway Unions from striking and in Colombia seeing multiple worker strikes blocking the roads in to the port of Buenaventura. The looming railway shutdown was particularly concerning as this could potentially cripple an already fragile logistics situation within the US. 

Overall, things remained quiet this week but there is still opportunity for prices to push toward 180 in the coming weeks so current levels to present some value if layered coverage is needed. Many in the industry will look to remain sidelined until the Brazil crop begins to take form so barring any significant news, we could see the market stay within a tighter range than we’ve come accustomed to in the last few months. It will still be important to monitor any changes in action and news as we get closer to the end of the year.

Tea Market

As winter begins to set in for India the production is beginning to decline in these areas while it’s ramping up in Argentina. More rain is still needed in both Argentina and Africa as the crop cycle draws closer but overall, the crop looks to be in good shape for production. The markets were relatively quiet with demand continuing the trend of following quality, even with the below par crop estimates and a delay in Argentina. Expect a quiet end of the year until the holiday season wraps up and people get back in the market for 2023 where the overall outlook should start to get clearer as things shake out in terms of quality and demand. 

For further insight and analysis on current coffee and tea market data, take a look at the weekly report from the Westrock Coffee commodities team.

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