Our industry often forgets how important small farmers are to the work we all do every day. We can verify this every time we meet at events like the last World of Coffee in Milan, where the focus is mostly on competitions, machinery, influencers, but apparently no one realizes that without small coffee growers none of this would be possible, and they keep being ignored as they have been for 400 years. The current times are stormy, for no one in the world it should be a mystery that climate change is affecting our lives in a radical way. To no one either, it should be a mystery that inflation is hitting the pockets of the world's poorest people, and this particularly impacts coffee farmers who, despite record coffee prices, have not seen their income levels improve. Finally, due to the war in Ukraine, the shortage of fertilizers could cause a deficit of almost 20% in coffee production in 2022, in addition to the food crisis that it is already affecting various parts of Africa.
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It is frequently pointed out that Kenyan coffees are the best in the world. Also, that its cup profile is unique and that it must always be within certain parameters (blackcurrant, berries, winey, juicy), or else it would not be a good example of a good Kenyan coffee. It seems that the industry has preconceptions about what is a good coffee, and what flavors should be obtained from a certain origin; as if the production of coffee were an exact formula, similar to a highly efficient factory where economies of scale are generated and from which the same result is always obtained.
Ethiopia exported 148,882 tons of coffee during the first six months of the current marketing year from August 21 to January 22, generating $578 million, 20% more than projected, according to the Ethiopian Coffee & Tea Authority.
Germany was the major importer of the highly-sought beans for the period followed by Saudi Arabia and Japan. This is important, because there are 5 different grades that are allowed to be exported from Ethiopia, so we need to understand the difference between them. Uncertain! It would probably be the answer that most of us would have as a first option, but fortunately, we are seeing the light at the end of the tunnel in various aspects that disturbed us in 2021. We have divided them into three main themes and we relate them to what unite us, which is specialty coffee.
This month we have received many messages from roasters asking when the new coffees we have selected in Peru and Indonesia will be arriving to our Barcelona warehouse. And the answer is not easy to articulate.
We have recently read that due to the logistical problems that conflict the world these days, the American multinational Amazon is innovating in its logistics supply chain by reforming twin-engine aircraft to adapt them for cargo and leasing container ships to be able to fulfil their orders and avoid the traffic jams that we are seeing in all the ports of the five continents since last year. It is always important to remember that just 27 years ago, Rwanda was in the midst of one of the most horrible tragedies humanity has ever seen. The genocide against the Tutsi population killed almost a million people and displaced two million more. These events shook this small country and almost wiped out the entire coffee industry.
Remarkably since then, Rwanda has enjoyed strong rates of economic growth, creating new business prospects and lifting many people out of poverty. Thanks to an efficient government actively working to develop the economy and reform the financial and business sectors, Rwandan coffee has become a very important player, contributing significantly to foreign exchange earnings and the monetization of the rural economy. In 2019, agriculture accounted for 29% of Rwanda's economy, and coffee accounted for a third of this income, with 75% of the total population working in the agricultural sector. A supply shock is an unexpected event that suddenly changes the supply of a product or raw material, resulting in an unforeseen change in price. Supply shocks can be negative, resulting in a decrease in supply; or positive, which produces an increase in supply; however, they are often negative. Assuming that aggregate demand does not change, a negative supply shock causes the price of a product to rise, while a positive supply shock reduces it.
Coffee has reached record prices since 2014 this week. But how does this price increase affect coffee farmers and roasters? What is the "C" price of coffee?
The coffee commodities market, also known as the "C" Market, is where brokers at the New York Stock Exchange determine the future price of coffee contracts globally every day. By buying or selling these futures contracts, brokers place bets on the expected future value of a certain commodity. Therefore, projections about the future supply and demand of coffee will make possible multiple variations in its price in the present. Cupping coffees without having any origin info, would be nonsense, right? We can't understand a coffee if we do not know its origin and to really know an origin, we must first try to understand its culture, read its history, listen to its music and observe the state of its political system. There's no other way. It is the same with many other situations in life, everything is a consequence of something anterior, a reaction of a previous action. This "Newtonian" plot is everywhere, and no matter how hard we try to untangle it, hits our unsophisticated sense of perception like an apple falling on one’s head, preventing us from understanding its full scope and impact. Not long ago I was listening on a podcast, to a "celebrity" of the specialty coffee industry, saying that the most difficult country where to work was Kenya. This seemed nonsense to me, because without a doubt, for anyone who has worked in Africa for a sufficient period of time, will say that the most difficult origin to work is undoubtedly Ethiopia, with light years of difference. And with this I am not saying that Kenya is all peaches and cream, because is not, but what I mean is that Ethiopia is too complex. It should be noted that with this article, I do not intend to establish a cultural superiority on the part of the West to the detriment of the third world, as it is commonly called. I firmly believe that there is no culture superior to another, however they are all different, each with its positive side and its flaws. I do not agree with the kind of superiority that some feel when they come to Africa "advising" how to live, what is the best solution to problems, and even how to grow and process coffee. Africa must find its own solutions! |
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