Weekly Coffee News: Central America

General Market News:

In Europe, Britain's inflation rate surprisingly decreased in August, with official data indicating a drop in the consumer price index to 6.7% from July's 6.8% - not too much, but at least a step in the right direction. This has led the Bank of England to not further increase interest rates on Thursday. In the USA, investors remain assured that the Federal Reserve will maintain interest rates at actual levels for now. But considering the US central bank policymakers' views on the potential for an economic "soft landing", further interest hikes towards the end of the year are considered a viable scenario. Meanwhile, in Asia, the Asian Development Bank (ADB) has reported that economic growth in developing regions will be marginally below prior predictions. This is due to challenges in China's real estate sector and risks associated with El Niño. Consequently, the ADB has adjusted its growth prediction for developing Asia to 4.7% from the 4.8% estimated in July.

The international coffee market is always good for a surprise. We saw a very nervous Arabica market in New York last week. With what looks to be a spill-over effect of the high oil prices, Arabica prices jumped towards new 7-week highs but could not hold those levels and started to retrace back to the previously established comfort zone, oscillating between 145 c/lb and 155 c/lb. The week closed at 151.15 c/lb on Friday, marking a 5% minus compared to the previous week's close. The Robusta prices continued their solid, firm course but were also pulled back slightly. The week closed at 2,461 USD/MT. On a week-on-week comparison, it posts a 3.7% weaker closing. To stay informed about the ever-changing dynamics of the coffee market, refer to the table below. We update this table weekly, providing the latest insights and updates.

Central America

In Nicaragua, the government of President Daniel Ortega has seized the Jesuit-run University of Central America, labeling it as a "center of terrorism." This move on August 16 led to the confiscating of the university's property, buildings, and bank accounts. Will this turn into an overpriced shopping mall soon?

The maturation cycle of the 23/24 crop is advancing favorably across all Central American nations. Favorable weather conditions, with ample sunshine and rain, are aiding the growth of coffee cherries. The green coffee trees start to show hints of red as the cherries ripen. Pests and diseases, including Broca, appear to be well-managed. Farmers are inspecting their farms and undertaking preliminary agricultural tasks. Early predictions suggest a promising upcoming harvest, provided the weather remains favorable. Harvesting is anticipated to commence in regions with lower altitudes by early October, which is just around the corner. However, a significant challenge persists in the form of labor shortages in the rural areas of Central America. Coffee producers are in dire need of skilled workers for the demanding coffee-picking season. Some are even considering arranging transportation from major nearby cities to ensure they have enough workers for a successful harvest.

No major news coming from the ports. The Panama Canal is recovering its water levels, and more vessels are allowed to transit now. But there is still some backlash with waiting ships on each side of the canal.

Central America Production Outlook