Coffee Market Update July 2022
By Raihaan Esat and Jesse Matthews-Cooke from International Coffee Traders (ICT)
The coffee market has experienced a lot of ups and downs lately. For coffee roasters, it’s time to get smarter about how we source coffee. In our July update, Rai and Jesse cover the best ways to protect your business from future volatility. Watch the full update here.
Green Bean Market Overview
All eyes on Brazil
The major focus of our attention right now is on Brazil. We’re hoping to see them produce a good harvest without any major disasters, like the previous frosts. This outcome will really help settle the market price and return some confidence to the industry.
The reliance on Brazilian coffee really is critical – any instability here will drive insecurity and a “scrambling mentality” from buyers.
We have been super proactive over the last six months, stocking up heavily on key origins such as Brazil, Colombia and Indian coffees (like Robustas and Arabicas). These are coffees we just don’t want to run out of so that our clients can have some consistency.
A declining dollar
The next critical consideration at the moment is the Australian dollar. This has been trading quite low against the US dollar (at around 68 cents), which makes all imports more expensive. On average, we are expecting any imports coming in over the next one or two months to be 10 to 20 cents higher per kilo than we anticipated.
What this means for our clients
For coffee roasters, the best way to protect your business is to buy strategically. While the traditional model is to purchase coffee week to week or month to month, consider looking at contracting your green beans in advance.
We strongly encourage you to talk to your current importer, whether that is us or another provider, to see what you can plan for the next six months or longer into 2023.
We’ve been conducting some research into the roasting industry and we’ve uncovered the two biggest challenges that business owners are facing:
1. Lack of time. As a business owner, you are overseeing everything from accounting to operations. That leaves you without enough time to focus on looking ahead.
2. No growth plan. Growing your business is something that we’ve found is a major challenge for roaster owners/operators, and most businesses do not have a strong growth plan.
In both of these situations, the answers are not simple, but The Coffee Commune can help to identify key areas in the business that can free up your time, improve efficiencies and make some cost savings.
What’s coming up
Join us in August for an exclusive seminar with Phillip Di Bella and the team, where we will run through the numbers to help your coffee business. This seminar will shed light on the new industry trends, the biggest challenges that business owners face, and analyse strategies that you must adopt to be successful in the new coffee market.
International Coffee Traders and The Coffee Commune are here to help accelerate your business potential.