Weekly Coffee News: East Africa

General News

The world continued to turn while the List + Beisler team was in Copenhagen, wrapping up a truly fantastic WOC show.

France held elections during the weekend, and Marine Le Pen's nationalist National Rally party claimed victory in the first round. President Emanuel Macron's centrist alliance came in third after the leftish/communist mesh-up. I guess he envisioned a different result, but it looks like French voters are truly dissatisfied with the Government.??

The UK is also getting ready for the polls. The odds look bad for Rishi Sunak and his "Tories" as they might lose power to the Labour Party, which is extremely hungry for power after 14 years of opposition. Elections will take place on Wednesday, July 4.?

Also, the US election campaign is ramping up. Biden and Trump had a fierce TV debate, clearly not showing the best side of both candidates. There is still some time, but November 5 is approaching fast.?

The first hurricane of this season is Beryl, which is directed towards Barbados and other Caribbean islands. In only 42 hours, it has gained massive power, mutating from a tropical storm to a monster hurricane, and is life-threatening for islanders. The US National Oceanic and Atmospheric Administration (NOAA) warned that this could become one of the worst hurricane seasons in two decades.?

Greece is facing bushfires on the island of Serifos and near Athens. Many residents were evacuated.?

While France is getting ready for the Olympic Games, which start on July 26, the Seine River shows extreme levels of pollution. We hope for clearer waters for the swimming competitions…

This past week brought back the roller-coaster feeling to those of us regularly observing and trading the coffee futures markets. While we enter a short trading week for Arabica (US Independence Day on July 4), we will surely see more nervousness and a hectic change of directions. Multiple explanations can be found, but the most prominent remains the speculative component of very well-capitalized funds, the effects of the USD on local currencies, and weather-related phenomena such as drought, flooding, or the frost-risk period during Brazil's winter. And remember, at least in the coffee world, when Brazil sneezes, the rest of the world gets a cold!?

On Monday, Arabica prices rallied to a new two-week high at 237.55 c/lb, but momentum could not be maintained, and the market dropped to levels around 225 c/lb. It kept meandering until Friday's close, posting a marginal 0.8% gain and settling at 226.80 c/lb.

Robusta prices showed some push on Monday but started falling during a week with relatively low volatility and losing 2.3% in a week-to-week comparison. Friday closed at 4,011 USD/MT.?

You can follow the weekly development of prices on the below tables:

Origin News

Ethiopia

Ethiopia is currently in its wet season, locally called “Kiremt/Kremt”. Characterized by rainfall and cool temperatures, this season typically lasts from June to August. Across Sidamo and Yirgacheffe, all the way to Harrar, rain is forecasted, nourishing coffee plants and promoting cherry development. Harvest activities are expected to commence with warmer and drier weather, typically starting around October in the low-altitude regions.

Farmers are working in their fields, and exporters, cooperatives, and akrabis (middlemen) are trying to obtain EUDR-compliant digital data for the upcoming season.

Logistics remain challenging. The Houthis have increased their attacks on ships in the Red Sea, and together with an economic national slowdown, not enough containers are reaching Addis Ababa, causing a severe container shortage. Furthermore, two shipping lines have canceled their services to the port. Delays are massive and, unfortunately, unavoidable.

Kenya

Government plans to raise $2.7 billion in additional taxes sparked mass protests in Nairobi and other cities in Kenya. Many young protesters took to the streets, decrying the bill's tax hikes and levies, claiming these measures would worsen the cost of living. In response, the government announced it would remove several provisions, including a 16% tax on bread and a 2.5% tax on vehicle ownership. Knowing the potential for escalation in Africa, we all hope for a peaceful resolution of this dispute between civil society and the government.

Weather conditions have been favorable, with some rain. As a result, the quality of fly-crop coffees is expected to be good.

The main-crop, typically starting in November/December, is forecasted to be slightly smaller. This decline is attributed to lower yields and loss of harvested area.

No significant news has been reported from the Port of Mombasa.

Tanzania

After being on alert due to Tropical Cyclone Hidaya, weather conditions have normalized. Northern areas around Mt. Kilimanjaro and the southern regions of Mbeya, Mbinga, and Mbozi have experienced abundant sunshine.

The Arabica harvest season is starting at any moment now. Meanwhile, Robusta harvest activities have begun, with the auctions for the first season already taking place. Volumes are limited, but quality expectations are high due to favorable weather conditions. Forecasts suggest that this year's harvest in Tanzania will be larger than last year.

As for logistics, things are running quite smoothly, and there has been no major news from the Port of Dar es Salaam.

Rwanda

Rwanda will go to the polls on July 15 and choose between three presidential candidates, including current President Paul Kagame. Tragically, one person has died, and dozens were injured in a stampede at an election rally for the current president.

The harvest season is now almost complete, with over 90% of coffee cherries already picked. Washing stations are already closing, and parchment is reaching the dry mills. Overall, volumes are anticipated to slightly decrease, but the quality outlook remains promising.

Local prices for cherry continue to stay high, influenced by speculations of a smaller harvest.

Uganda

Weather conditions in Uganda have been favorable.? In Kampala, forecasts currently predict warm and partly sunny days. In the Mt. Elgon region in the east, some rain is expected.

Uganda is currently in between seasons. Arabica coffee-growing regions in the east and west typically start harvest activities in September.

As for Robusta, the harvesting season is entering its final stage. Good volumes of coffee were reaching Kampala, but the flow is slowing now. Farmers are holding onto their coffee in hopes of fetching higher prices.

According to the USDA Foreign Agriculture Service, Uganda's coffee production and exports are projected to increase in 2024/25, influenced by favorable crop conditions, targeted interventions to fight pests and diseases, and the maturation of younger coffee plants.

Coffee Production in East Africa