August 9, 2019 Coffee and Tea Market Report
Basically, an unchanged market on an uneventful week for the coffee market. Reports are showing the Brazil crop 87-93% harvested for the 2019/2020 crop, this is significantly higher than the 84% five-year average for this point in the season. Overall crop volumes out of the world’s largest coffee producer are looking healthy, however it is quality that is concerning many in the trade. Numerous flowerings due to inconsistent rains have led to trees that have cherries in various levels of development. The same branch will have unripe green, red, and black cherries, all of which will be harvested at the same time and contribute to inconsistent quality in the cup. Elsewhere, Central American remains well sold with differentials firm as we have ever seen. On the macro side, the trade war with China is generating some inquietude in markets and has led to a decline in other commodities. The devaluation of the Chinese Yuan to its lowest level since 2008, and subsequent labeling of currency manipulation did not help the situation as well.
Demand is back around the tea world. There was good demand for a slightly smaller auction in Kenya this week. There were 140,000 packages at auction this week with firm prices. Low crop levels are pushing buyers to buy good quality tea while it is available. An amazing feat was seen at an Indian tea auction this week when 2kg of an Assam Golden tea sold for a world record price. Only 35kg of this rare tea was produced this year and only 2kg were brought to auction. But this 2kg was purchased by a European buyer for $2,035 (US dollars). But as a whole, Indian auctions saw good demand for well-made teas. On a different note, a 7.4 magnitude earthquake rocked Indonesia this week that caused panic over a potential tsunami. More than 10 million people went without electricity for around 9 hours from Sunday into Monday. In some areas of Vietnam, serious rains have caused issues. These rains were caused by hurricane Wipha. Some growing areas have reported up to a 20% crop loss due to the The National Weather Forecast Centre predicts 7-8 more hurricanes this year.
For further insight and analysis on current coffee and tea market data, take a look at the weekly report from S&D’s commodities team.