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Featuring the latest news on the coffee industry and business insight from senior members of the Bennetts team.

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Industry News.

An update on the Central and South American leaf rust epidemic and the latest production expectations from PNG, Brazil and India.

The widespread effects of leaf rust continue to blemish production estimates throughout Central and South America for the upcoming coffee year. Coffee farmers in Peru began a protest, albeit briefly, last week demanding aid to finance pesticides to combat the disease. The protest ceased the next day after the Agricultural Ministry promptly stepped in and stated that the government was prepared to offer open ended loans to farmers to finance the costs of fighting the leaf rust problems. This will be good timing, with farmers beginning to prepare for next year’s April-July harvest, to contain the infestation and should assist the farmers to bring in a reasonable crop of fine Arabica coffees for the coming year.

Agricultural producers continue to protest in Colombia, the strike now in its second week. The protesters have implemented road blocks in Boyaca causing transport chaos in certain parts of Colombia. Producers are currently in negotiations with the government; however an agreement has not yet been reached. At this stage we have not seen any negative implications of the protests on the Colombian coffee industry.

Production estimates for the current PNG coffee season continue to be below average for this time of year. The decrease in output in primarily due to crop stresses caused by a large harvest conducted two years ago. The trees produced a bumper crop in the 2011-2012 coffee year and were harvested accordingly, however they have not seemed to be able to recover from this larger yield. The stress caused by increased harvesting has continued to cause strain on the trees and as a result they are now bearing less fruit. 

Brazil has experienced unexpected rainfall during the early harvest season. Farms in the Cerrado region have reported increased rainfall during the pre-harvest and first fortnight of harvest season, resulting in good production estimates from all farms. Irrespective of the increased rainfall, cups continue to be in line with expectations. Meanwhile the Brazilian Real continues to devalue against the US dollar, reaching new eight year lows last week.

India has also seen increased rainfall of late, with the annual June-September monsoon rains in the Chikmangalur region recording nearly double the average. Farmers are mildly concerned of the effects this will have on the upcoming crop. Above average rainfall can affect yield and reduce the intensity of cup characteristics.

 
Ref: BBC News, DR Wakefield, I&M Smith, PNG Origin Partner, India Origin Partner and Brazil Origin Partner.

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