June 13, 2022
Down slightly overall there wasn’t much to report from what has become a reliably choppy market that seems to be waiting for a solid fundamental indicator to pick a direction. This time of year, cold weather in Brazil and the corresponding threat of frost tend to be the big market mover. The market’s lack of action this week reflected the current non-threat in the nearby forecast. Physical business remains slow overall. Despite prices that are attractive from a historical perspective, Brazilian producers who are midharvest have largely held out from selling in hopes of better pricing basis a tightness in supply and demand. Colombian suppliers only offer from the lackluster mitaca midcrop when they have coffee in hand. The constant rains in the country have led to a crop that is smaller overall and one that has come in at a trickle, differentials have firmed accordingly. The Central American crop is well sold at this point, suppliers who shorted the Honduran crop are now replacing with Mexican and Nicaraguan coffees bringing differentials firmer across the region. Shipping complications at high cost remain an issue for the industry, with many hoping that Shanghai opening up may improve container balance on a global level.
Much of the same this week with weak demand overall and quality was slack as well as many buyers are leaving the poorer quality teas at auction. North India has been a bright spot with good quality and production being seen so there is a positive sentiment that total production in 2022 will be at similar levels to last year with North India helping to compensate for down cycles in other origins. The elephant in the room remains the question of what forward demand will look like given the current and specifically what will become the new normal out of Russia and parts of the Middle East. It does look like global demand is shifting towards higher quality teas overall so it remains to be seen how quickly the market will shift to meet these demands from the market.
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.
- Choosing a selection results in a full page refresh.