Weekly Coffee News: Central America

General News

Last week was a week of big decisions. On one side of the Atlantic, in the USA, a new president was elected: Republican Donald Trump will now rule the country for the second time. His opponent, Democrat Kamala Harris, accepted her defeat and congratulated Trump on his second term in office. The international stock markets appear to be welcoming Trump's triumph, especially shares in companies that are said to have a certain "Trumpiness". Tesla, for example, is very popular. The 130 million dollar election campaign donation from Elon Musk (founder and principal shareholder of Tesla) has already paid off several times, with the share price increase recorded in recent days. What will it be like when Musk takes over e.g. the Ministry of Finance? The first events cast their shadows ahead: Musk wants to attack the independence of the US Federal Reserve and mentions that the US president shall have more influence here. FED Chairman Jerome Powell does not take this lying down for long and reacts promptly by announcing that he will not resign. His term in office runs until the end of May 2026. Until then, the Fed will continue carefully weighing up whether to lower (or possibly even raise) interest rates. What happens after that? We will see... For now, the FED has decided to cut interest rates by further 25 points. The Bank of England and the Swedish Riksbank have also eased interest rates.?

And Trump is causing irritation in the run-up to COP 29, the United Nations Climate Change Conference in Baku, Azerbaijan: as he has done before, the USA is to withdraw from the alliance. In return, it wants to produce more and, therefore, cheaper oil. Cheaper energy prices are intended to boost the economy. Unfortunately, it completely ignores the climatic side effects. Weather researchers are already predicting that 2026 will be the hottest year in history. The global climate consequences are already taking on catastrophic proportions. In Spain, 89 people are still missing after the floods in the Valencia region. The many deaths and the damage to homes and infrastructure have prompted Spanish Prime Minister Pedro Sánchez to make 10.6 billion euros available for those affected in the region. And in Southern California, more than 10,000 people had to be evacuated because wildfires were threatening their homes. How would Trump react if his Mar-A-Lago resort was flooded? Would climate change still be a "scam"?

And while the world is moving at breakneck speed, the government in Germany is collapsing. (Still) Chancellor Scholz (SPD) has forced the dismissal of Finance Minister Christian Lindner (FDP), thus causing the collapse of the "traffic-light" coalition that he leads. The opposition is now calling for a quick vote of confidence from the Chancellor - preferably in November so that new elections can follow in January. Until new elections are held, the minority government (SPD and Greens) will not be able to achieve much. Given the global political challenges, Germany urgently needs to regain its ability to act. New elections ASAP, please!?

The international coffee exchanges in New York (Arabica) and London (Robusta) also reacted significantly to the above news.?

Arabica prices alone moved in a trading range of over 20 c/lb last week. On Thursday, there was a rally that drove the price to a new 3-week high. After the brief euphoria, prices fell somewhat on Friday and closed in New York up 4.3% at 253.35 c/lb. International Robusta prices developed similarly, after a rise on Thursday and falling to USD 4.376/MT on Friday, ending the week up 2.3%.?

The table below contains all coffee-related information. It is updated weekly:

Origin News

This week is much about football in Central America as the quarter-finals of the Concacaf Nations League (Confederation of North, Central America and Caribbean Association Football) are about to begin. Costa Rica will face Panama on Friday, followed by Honduras taking on Mexico on Saturday. Who will advance to the semifinals?

The hurricane season in the region is expected to end soon. However, concerns remain about potential hurricanes developing around the Caribbean, affecting North and Central America. Hurricanes and tropical storms could damage crops—including coffee—and lead to flooding, infrastructure damage, and power outages. This week, consistent rain is forecasted across the region.?

The harvest is progressing well in lower altitude areas, but volumes are still small. The peak of the harvest is anticipated between December and February, provided weather conditions remain favorable. In Nicaragua, Honduras, Guatemala, and Costa Rica, the 2024/2025 crop is projected to see a slight increase in yield.?

Labor shortage continues to challenge farmers across Central America. In Nicaragua, for instance, the economic and political situation has led to significant emigration, primarily to the United States, reducing the available workforce for coffee picking. As a result, farmers often face higher costs, needing to pay more to retain their limited pickers or to bring in labor from other villages. For some, it could also mean losing part of their harvest.

In general, the demand has been slow, and prices have been steady.

On the logistics front, the situation has been challenging, primarily due to a shortage of containers.?