Origin Report - Thailand

Our June origin report looks for the first time at Thailand, departing from the Americas and Ethiopia which we have focused on previously. Thailand may not be the first country that many people think of when they think of coffee production, but Thailand is home to both Robusta and Arabica coffee, as well as nurturing an established and growing specialty coffee and cafe scene. We spoke with Fuadi Pitsuwan, Co-Founder of Thai coffee exporter Beanspire Coffee, and Noon NutRada Kunavivattananon, International Spokesperson for the Specialty Coffee Association of Thailand, to get their insight into the coffee year in Thailand.

The World Market

C-Market Analysis

C Market candlestick chart
Source: Tradingview

The month of May saw significant upward movement in the C Market, beginning with a jump from $1.40 to $1.54 over May 5–6. The rest of the month would bring three more single day gains of more than five cents, eventually closing May at $1.62. This $1.62 mark is the highest the market has seen since November 2016. As of June 15th, prices for the month have fluctuated between $1.62 and $1.56, which still represents prices higher than any we’ve experienced since the end of 2016.

Global Coffee Industry Statistics and Analysis

  • The International Coffee Organization’s monthly market report indicates a 10.4% rise in the composite indicator price of coffee, marking the highest monthly average since February 2017
  • Total exports in the first seven months of coffee year 2020/21 totalled 77.52 million bags of 60 kg, a 4% increase over the previous year
  • Cumulative exports for the last 12 months (May 2020–April 2021) are down 0.48% compared to the same period in the previous year
  • World consumption projections are up 1.9% from the previous year at 167.58 million bags, which falls 1.2% short of estimated global production
  • With consumption projections rising and production estimates falling, projected consumption could outpace production in the 2021/22 coffee year

See the ICO’s full summary with specific figures below for more details.

In May 2021, the ICO composite indicator rose by 10.4% to 134.78 US cents/lb, the highest monthly average since the level of 137.68 US Cents/lb registered in February 2017. A firm upward trend of coffee prices over the first eight months of coffee year 2020/21 seems to confirm a net recovery from the low price levels that began in coffee year 2017/18. The price performance has been driven by an expected reduction in production in key exporting countries like Brazil for the 2021/22 season. Moreover, the brighter prospects for demand as the covid-19 pandemic-related lockdown measures are being removed in major consuming markets with the covid-19 vaccine programmes is generating greater confidence of consumers in an economic recovery and return to normal. Prices of all four groups of coffee have recorded a substantial increase, particularly the groups of Arabica coffee. In terms of market fundamentals, shipments by exporting countries to all destinations totalled 11.40 million 60-kg bags in April 2021, compared with 11.29 million bags in April 2020. As a result, total exports over the first 7 months of coffee year 2020/21 amounted to 77.52 million bags compared to 74.49 million bags over the same period in coffee year 2019/20. Cumulative exports from May 2020 to April 2021 are estimated at 130.40 million bags, a small decrease of 0.48% compared with the 130.97 million bags recorded from May 2019 to April 2020. World consumption for coffee year 2020/21 is projected at 167.58 million bags, an increase of 1.9% on its level of 164.43 million bags in coffee year 2019/20. Total production for coffee year 2020/21 is estimated at 169.60 million bags, representing a 0.4% increase on 168.94 million bags in coffee year 2019/20. Although world consumption is increasing, it remains 1.2% below world production. However, with prospects of lower production in Brazil for coffee year 2021/22 and the reductions in other countries, world consumption is likely to exceed world production in coffee year 2021/22.

ICO Composite Indicator Daily Prices
Source: ICO Coffee Market Report, May 2021

At Origin

Harvest in Numbers and Statistics

According to data from the ICO, crop year 2020 yielded 500,000 bags of 60 kg for coffee producers in Thailand, which makes Thailand the 20th largest producer of coffee in the world. This represents a 3.4% decrease from the previous year. Harvest ended in April this year, and early estimates suggest another small crop for 2021. The harvest was without rain and frost however, which promises high-quality coffee for producers. The year also sees a continuing trend in decreasing Robusta production numbers in Thailand, with growing Arabica numbers in the country. Coffee shipments for export are expected in mid-July and August.

Thailand exists in a somewhat unique position as a producing country; in-country consumption outpaces production, creating an environment which keeps a significant majority of coffee in Thailand for domestic consumption. The small amount of Thai coffee which gets exported, representing around 5% of production by some estimates, is exported with the intention of sharing their work with the world rather than with the need to create economic opportunities for producers.

Coffee cherries in Chiang Rai, ThailandCoffee cherries in Chiang Rai, Thailand

Coronavirus Impact

Thailand is currently experiencing a wave of COVID-19 infections which began in early April 2021, totalling a 7-day average of 2,768 new cases daily as of June 14.

Throughout the pandemic, impacts on the coffee industry have been felt in both consuming and producing contexts. Wholesale roasted coffee sales dropped by an estimated 40%, which was offset somewhat by a significant increase in retail coffee sales as people adapted to drinking coffee at home instead of in cafes. Travel in-country has been a challenge for coffee exporters and other professionals who typically would travel to farms to be more involved in quality control practices, processing, and other production stages. Farm labor has also been short this crop year as migrant workers have been unable to travel for work.

Coffee storage in the Beanspire warehouseCoffee storage in the Beanspire warehouse

Future Outlook for Ally Coffee in Thailand

We’re happy to continue our partnership with our exporting partners Beanspire Coffee into its third year, and are looking forward to bringing Mae Kha Jan Washed back to the US. Visit our blog post “Thailand’s Specialty Coffee Production” to learn more about Beanspire Coffee and coffee production in Thailand.

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