The World Market
C-Market Analysis
Source: Tradingview
Since the beginning of May the C Market has traded in a narrow range between $1.83 and $1.89 with some peaks and valleys in intraday trading. This period of relative stability comes after the rally to $2.05 which ended on April 18. The market’s current prices are lower than we saw from October 2021 to October 2022, down 13% compared to this time last year. However, the $1.80 range is still above the long period of low prices experienced between 2015 and 2021, including several months in 2019 during which coffee prices fell below $1.00 per pound. Currently we will have to see if the market can sustain this $1.80 support level and potentially climb back toward the $2.00 mark, or if the support fails leaving the market to slide again to lower levels.
Global Coffee Industry Statistics
Sourced from the International Coffee Organization unless otherwise noted. Read their full April 2023 Coffee Market Report here.
- The ICO Composite Indicator Price (I-CIP) for coffee increased by 5.0% in April 2023, reaching an average of 178.57 US cents/lb.
- Average prices for all coffee group indicators rose in April 2023, with Robusta coffee showing the highest increase at 8.7%.
- Certified stocks of coffee showed a significant decrease in April 2023, declining by 7.9 to 0.74 million 60kg bags, reflecting tightening supply conditions and potential implications for future market stability.
- Global green bean exports in March 2023 decreased by 9.6% compared to the previous year, affected by various factors including climate, socio-political issues, and seasonality.
- South America's coffee exports declined by 17.3% in March 2023, with Brazil and Colombia experiencing decreased shipments.
- World coffee production is expected to bounce back by 1.7% to 171.3 million bags in 2022/23, while consumption is projected to increase by 1.7% to 178.5 million bags, resulting in an estimated deficit of 7.3 million bags for the year.
At Origin
Harvest in Numbers and Statistics
All statistics sourced from Instituto del Café de Costa Rica (ICAFE) unless otherwise noted.
As Costa Rica’s harvest wraps up and coffees begin to sail to their destination warehouses, reports indicate a 14.7% increase in production this year compared to the 2021/22 coffee year, resulting in an estimated 1,864,928 fanegas of green coffee produced, equivalent to approximately 1,243,285 bags of 69 kg. These results come as a surprise to many after experts speculated that the country’s industry would see a dip in volume due to the greatly increased cost of fertilizers and the resulting decrease in their usage by some Costa Rican producers.
The year’s increased production has been met with lower than usual demand, resulting in an atypically high amount of 218,162 bags of 69 kg of green coffee still left unsold. This number represents 17.5% of the country’s total production for the year. “Broadly speaking, and as I have heard from several producers, it has been a slow harvest,” says Central America Buyer Abraham Castro. “This indicates that demand and sales have been slow and not at the usual rate.” This slacking demand has driven down differentials in the country, further reducing sale prices for producers on top of the lower level of the C Market this year compared to last year. Sale prices for all grades of coffee have averaged approximately $2.46 / lb this year in Costa Rica, compared to $2.52 during the last harvest year despite greatly increased costs of production in 2022/23.
Coffee flowers in bloom at Aquiares Estate in Turrialba, Costa Rica.
In the specialty coffee sector, anaerobic fermentation and other experimental processes are on the rise, with seemingly 2–3x the number of these lots available compared to recent years. While these processing methods have the potential to increase the sale price for a coffee, it is yet to be seen if the demand for these lots will keep up with the increased supply.
Trip Report
In early May, members of our quality control and sourcing teams gathered at our Costa Rica office to reconnect, calibrate, and visit some of our producer partners at their facilities. In attendance were Mimi Borgskog, EU Sample and Lab Manager, as well as Omar Felipe Molano, part of our Colombia sourcing team, who wrote about their experiences to share their trip with us!
On our first day in Costa Rica we had the opportunity to visit Los Durán. They struck us as a really humble farm; they first received us in their home which they mentioned has improved little by little each year thanks to the coffee sales they have with Ally. We then visited their wet mill, which has also been improving over the years, and they showed us how they do their process focusing on black honeys and long fermentations which results in their very rich and interesting profiles we all love!
Mimi Borgskog and Omar Felipe Molano at Los Duran in West Valley, Costa Rica.
We also had the opportunity to visit Aquiares, which we felt was a life-changing experience. The attention to detail that Diego Robelo gives to coffee is truly impressive. From the very start the seedlings are carefully selected and grafted with stronger varieties to ensure that all the trees will grow resistant and withstand climate conditions, and they have to do this manually for the tens of thousands of trees in the farm! Once the seedlings start growing, Aquiares supervises that each plant gets enough nutrients in their nursery, moving them accordingly as they grow until they’re ready to be on the farm.
The amount of projects that Aquiares has are impressive, everything from processing all the coffees to taking care of the land. The ones that really stood out for us were how they give back to the elderly community by letting them use the space between the coffee trees to plant beans, which gives nitrogen to the soil and also offers the people a way to use their time and an additional income.
Cupping at Aquiares Estate. Left to right: Bram De Hoog, Specialty Sourcing Manager; Diego Robelo, Aquiares Estate Owner/Producer; Mimi Borgskog, EU Lab and Sample Manager; Armando Jara, Aquiares Estate Head of Quality; Abraham Castro, Central America Sourcing; Omar Felipe Molano, Colombia Sourcing
Ally’s visit happened right after Specialty Coffee Expo in Portland, which gave us the opportunity to try a couple of different origins roasted by different roasteries, as well as some new varieties Aquiares is working with and a couple other Costa Rican farms like Juanachute, La Chumeca, Tio Juan and others. It was a great and fun way to learn and get different perspectives.
Finally, visiting Costa Rica to calibrate with the team and learn more about how different origins work was a really insightful and inspiring experience that helps us understand and get ready to move the volume we expect to move from Costa Rica this year, which is around 3000 bags!
Ally Coffee in Costa Rica
This harvest season we’ve been glad to continue growing our relationships with our Costa Rican partners and to help create connections directly between them and coffee roasters around the world. This is our second harvest in our Tarrazú sourcing office, and as time goes by more and more producers have visited the office to cup coffee with our team and receive feedback on their work. Leo Mora of Placeres del Llano Micromill was one of those visitors, and he shared this with us recently, “For us as a microbeneficio, having the opportunity to have an office like Ally Coffee in the Los Santos area is very important because it helps us a lot to be able to expose our coffees outside the country. They open up the possibility of improving day by day, thanks to the help of Abraham and Emanuel, who make us feel at home every time we visit them in the office. In advance, I am very grateful for the support and help given, since they give us the possibility of growing hand in hand with the company.”
Leo Mora preparing to cup at the Ally Coffee Costa Rica office, plus scenes from his Placeres del Llano Micromill.
"I continue to extend the invitation to all producers and roasters who want to visit us; the doors of the laboratory are open for when you want to have quality control of your coffees,” said Abraham Castro. “The coffee industry is small and we all have to help each other.”
Our first containers from Costa Rica are afloat now to warehouses across the globe. Get in touch with your account manager to find out which lots are headed to your region!