OCTOBER NEWSLETTER

Welcome to the October Edition of our Coffee Newsletter

Get ready to embark on a coffee-filled journey as we spill the beans from our cupping room, share the latest buzz from Mexico, and unveil the exciting events we have brewing. October is about welcoming the Coffee New Year with open arms, join us as we dive into a month filled with flavour, community, and all things coffee.

A WORD FROM THE CUPPING ROOM

This month we landed our eagerly anticipated microlot arrivals from Costa Rica and Guatemala.

We were thrilled with the exceptional cupping results from both selections, which unveiled a wide array of flavour profiles and complexities. From the bright notes of passionfruit and white wine, to the delightful hints of nectarine and cinnamon, these microlots are sure to cater for all your coffee desires.

With a diverse range of options available, you're bound to find the perfect match among our selection. However, we only have a small selection of coffees, with very limited availability, so be sure to get in quick before they're all gone!

For more information or to enquire, please contact your Bennetts Account Manager!

UPDATE ON MEXICO

Grupo Terruño Nayarita (GTNay) is a society of coffee producers in the Mexican state of Nayarit. For 27 years and counting, these producers have increased their income by instituting controls to improve coffee quality and ensure complete traceability while simultaneously promoting the preservation of the natural shade canopy and sustainable agricultural practices.  

GTNay's 400+ coffee producer members work directly with Cafés Sustentables de México (CSM). CSM supplies coffee quality control services to the group. GTNay and CSM together represent a model of sustainable coffee production that have exported nearly 200 containers of internet-traceable specialty coffee with barcodes and serial numbers on every bag.

During the 2020 harvest, GTNay producers began to report lower than expected yields on their farms. The following two years were some of the smallest volume harvests in the organisation's history, and it's not just Nayarit. There's a great need in Western Mexico and beyond to restore the quality of soil after years of "green revolution" after the government pushed synthetic fertilisers and new varieties onto small producers.

In 2022, using a grant generously donated by San Cristobal Coffee Importers, GTNay and CSM built a unique "bio-factory" at their headquarters in the city of Tepic. This bio-factory runs like a micro-enterprise within the organisation, offering farmer members organic soil products to take back to their coffee farms! The manufacturing process uses resources from Nayarit's forests, such as fungi, bacteria, mycorrhizae, yeast, among other beneficial organisms, transforming them into agro-ecological products to combat pests and diseases as well as improving the nutrition of the crops and recovering the life of the soils. ⠀

During the 2023 harvest, for the first time, producers applied these products directly to the soil at the base of their coffee trees. Yields were, consequently, greatly improved! But there is work yet to be done. GTNay continues to invest in organic fertilisers that increase coffee farm yields, while simultaneously enhancing the health and fertility of the soil. We are hopeful that the 2024 crop will outpace all previous harvests and make Nayarit a regional leader in sustainable coffee production for generations to come!

We are pleased to announce that after several seasons of unavailability, we have secured three lots of this wonderful Mexican coffee, which is due to arrive in November, so please contact your Bennetts Account Manager to enquire!

MARKET REPORT

NY C movements and the Brazilian Impact

Well, the talk in September was all about weather, weather, weather. Michael Fish would have loved it. The market opened at an uncontroversial level of 154.65 c/lb. Rains arrived slightly earlier than normal into Brazil, due to the El Nino weather pattern. This prompted the trees to flower, which of course is the first stage of cherry growth. The rain then stopped and hot temperatures returned, casting worries about the productiveness of the 2024/25 crop. The market had to take this into account and we saw some upward momentum, peaking at a high of 164.50 c/lb on the 19^th.  Because the harvest of the current crop has gone well, El Nino is expected to bring plenty of rains to South America later this year and Brazil will get back to its ‘’on season’’ next year. Prices returned to the downside and with the expectation that soon the Brazilians will be singing in the rain, we closed out September at 14615 c/lb.

The London Robusta market followed a very similar pattern to the Arabica September market, but prices are still considered to be high in comparison to the historical average, sitting comfortably in the 2,400 to 2,600 US$/MT range. Worries surround the potential for an upcoming Indian drought, affecting total volume and therefore supply. The Vietnam harvest will start its flow from the farmers in December and should peak around February so we may see some respite then. Time will tell.

Certified Stocks

Arabica certified stocks are placed at nearly 442,000 bags, down from last month’s figure of 512,000 bags. Robusta sits at 42,660 MTS which has risen from 34,000 in August.

Commitment Of Traders Report

The COT, cut off the 24^th September showed that Commercials increased their net short position from -6,213 in the last report to -17,310 futures lots. Specs reduced their overall net short from -25,113 to -11,420 futures lots. Both the Commercials and the specs have had overall short positions since July.

The Wider Macroeconomic Impact

The Aussie Dollar continues to wade in the low 0.6s with forecasts that it could fall to 0.5. The US dollar Index continues to rise, reaching its highest levels since November last year. This has happened due to a weakening Yen and higher than expected increase in the Manufacturing Index, combined with rising T-note yields. To further add to the greenback’s strength, US inflation figures have remained high, and with oil prices spiking, it is looking like this could continue. Could this lead to other interest rate hikes?

To counteract the effect of the strong US Dollar making coffee more expensive for Aussies, is the weakening Brazilian Real, which always encourages farmers to sell their coffee, and is pushing the market down. The Real is at its lowest value since January this year. We have also heard that the Aussie dollar has been shorted to quite the extent. If this is the case, when the time comes for those hedge funds to buy it back and cover themselves, we could see a springy return to more desired levels.

CGLE GEMSTONE CUPPING EVENTS

This month we are excited to announce that we will be hosting 2 Café Granja La Esperanza (CGLE) Gemstone cupping events in Melbourne and Sydney. This is your opportunity to cup these amazing microlots before they go to auction later this month.  We look forward to welcoming you for some enjoyable evenings and to catch up with friends old and new.

This is a (free) ticketed event; however, spaces are limited!

If you don’t want to miss out, keep an eye on our socials for more details and to secure your spot.

Melbourne Event:

Date: 19^th of October 2023

Location: Bennetts HQ – 2/2 Walton Street Kew

Time: 4-6pm

Details: Light refreshments and drinks provided by us. Cupping will take place shortly after 4pm, so please be sure to be on time.

Sydney Event:

Date: 23^rd October 2023

Location: Leible Coffee – 1/5 Blue Street, North Sydney, NSW, 2060

Time: 5-7pm

Details: Light refreshments and drinks provided by us. Cupping will take place shortly after 5pm, so please be sure to be on time.

COFFEE NEW YEAR

October 1^st marked the beginning of the Coffee New Year, and a chance for us all to reflect on what was a very busy but successful past 12 months.

We are excited to see what the 23/24 crop brings and look forward to continuing to learn about new innovations, being involved in coffee events, and connecting with our customers and suppliers far and wide. 

Happy Roasting,
The Bennetts Team