http://abcnews.go.com/International/wireStory/guatemala-declares-national-coffee-emergency-18445643
To quote a friend in the industry,
“Brokers, exporters, importers, traders, Co-Ops and just about everyone in the middle between the farmer and the roaster are doing “that dance”‘.
It’s contract exchange time again as most origins have or are in the process of harvesting and prep’ing their wares for sale.
I have no doubt the situation with Leaf Rust is quite diabolical. One of the big Oz brokers is currently over in Cent-Am at the moment checking out for sure on the ground what is happening.
Coffee prices are due for their cyclical upswing. It was in May 2010 when Colombia pressed the “red button” a.k.a. shortfall due to excessive rains and “leaf rust” that triggered a major panic situation resulting in the C almost doubling in the space of 4 months. Tracking from 160 to a peak of 300.
Of course, coffee is one of those commodities where the “man in the middle” controls the shots – dictating what price he will pay the farmer and what” cost the roaster will bear.
Arabica is at an unsustainable level currently. It’s can’t be real at 44 cents a pound spot – that’s ludicrous. Quality diffs are in the -20 and -40 range which should swing back to +20 to +60 once the full impact of Leaf Rust is realized.
Leaf Rust is a dire problem for coffee crops. You can’t treat it the same way as traditional crops by spraying on the top of the plant – it grows from the under-side. You also can’t easily “weed it out” because the spores travel like wildfire when disturbed. The treatment is quite involved.
Prices will rise and as usual they will take 12-18 months to drop again as inventories are flushed out of the system.”
