Okay, I admit it. I drank the Kool-Aid. I believed the coffee market would hit $2.50. Now of course since the coffee market has gone south we are sitting at $1.65 we are a bit far away. What has changed since we hit a high of $2.19? Well to be truthful, nothing. That’s right, zero, zip, zilch.
Here’s The Skinny
Here is what we know (I think at least). It looks like drought will cut the Brazil crop to about 52 million bags, down from 58 million in January’s estimates. There was more damage in Zona da Mata, in parts of Minas Gerais and in the southern regions. These were the hardest hit areas. The total area affected by the drought is around 70% and about half of the impacted areas will lose 20% of production. The current outlook also is for smaller bean size all across Brazil. This is coupled with no news from Vietnam, the current Roya situation in Central America and spotty reports from Colombia.
Our Takeaway
What’s this all mean you ask? Make sure you book your coffee to secure the qualities that you use. The days of buying high quality Centrals in June/July are over. As far as pricing, this may look like a great buy at $1.65 market, but then again speculative investors and the funds may push this down even further. It all depends on the biggest behemoth – Brazil.
Remember the old saying in commodities “There is a Bull & Bear around every corner”. This holds true for the coffee market in the foreseeable future.
Next month a coffee report on my trip to Guatemala. Until then hold onto your wallets.
Yours In Coffee,
Andrew
Visit Us In Westlake Village
There’s always an open invitation waiting for you to join us at our cupping table in Westlake Village. To view a full listing of our coffees please visit our coffee offerings page.
Feel free to email us anytime or call to speak with our friendly staff M-F, 8AM – 4:30PM PST about our coffee market reporting and how we can help improve your roasting business. 800.761.JAVA
