Brazil is seeing some adverse weather conditions and this is likely to add to the already negative sentiments regarding farm investment, so the cycle will change.
The mood in some origins is pretty bad to the point farmers are replacing coffee crops with alternative produce or just mothballing their estates until prices rise, willing to skips a season if necessary.
Sumatra, Costa Rica, PNG, Ethiopia, Kenya all command high differentials in the market.
Today, I pay 300+% more for a Kenyan than I do for a high quality specialty grade Brazil. Its 250% for a Sumatran and with the shortfall in Costa Rica the coming season it will be 200%.
In any market, there are segments and for quality coffee, asking prices are still high as more consumers seek better tasting beverages and roasters lift their quality metrics to adapt to the changing tastes.
When supply tightens in the quality segment, as it does around this time at the tail of the current season (Centrals) whilst awaiting new crop in few months, prices firm.
Coffee is a game of speculative supply versus demand, it’s traded in cycles that are 8+ weeks in front of where we are at today and there is a large chunk of hustling involved around definition of risks.
It’s a shame that the only part that’s reported is the bottom level commodity rate that bears absolutely no resemblance to what ships and sells in many markets, in fact it’s so far off the mark the numbers are not even relevant or realistic.