February 21, 2022
The C Market cooled off slightly this week finishing down 5 cents today as traders prepare for a long weekend with the market closed Monday for President’s Day. The market touched an 11 year high last week, so the correction comes as little surprise when paired with recent volatility. GCA stocks and ICE certs saw a further decline with little hope for coffee to make its way to the board amidst firm differentials across all origins. Reports out of Honduras estimate the final crop numbers to finish down 20-30% below expectation, the sudden realization by the trade of reduced supply saw Honduran differentials spike in quick order. Continued negative news around logistics is surprising nobody at this point as Maersk, one of the major shipping lines declaring they will no longer take shipments out of Colombia. Domestically, the East Coast is beginning to see some of the port backups that have now become standard in the West. Where we have heard reports West Coast roasters unable to offload coffee their normal ports have resorted to sending green to an increasingly congested Houston port to be trucked to the West Coast.
Quality remains king (or queen) across tea markets this week. Prices seemed to be erratic other than chasing the brightest, well-made teas. In Kenya, there was fair demand with 12.6% unsold. This is a little better demand on this week’s 192,040 packages (12.5 mill kgs) versus last week’s slightly larger auction at 194,249 packages. Most origins need rain, the one exception being the island of Java in Indonesia. Argentina is in desperate need of rain but there is some in the forecast over the next week. The big question remains; is it enough to help the season recover. Production levels are well below par levels. Logistics continue to be issues for all origins with rates, for the moment, remaining consistent albeit, high. For the most part, the challenges facing the tea world remain this week. Cross your fingers for rain and shipment bookings.
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.