The vagaries of the climate, triggered by the so-called “global warming”, and international speculation worry coffee operators, a sector which however continues to give great satisfaction to Trieste.
We talk about the situation with Massimiliano Fabian, president and CEO of Demus of Trieste, the company founded by his grandfather and leader in the decaffeination market, i.e. the “dewaxing” of green beans to obtain the production of natural caffeine. The Giuliano entrepreneur is also a teacher at the “Ernesto Illy” Master’s Degree in Coffee Science and Economics.
Furthermore, since last May, Fabian has been appointed vice-president of Ecf (European coffee federation), the European coffee federation. According to international surveys, the price of Arabica has risen by 75% since 2021, with a plus of 60% in 2023 alone. Then there was the surge in Robusta whose prices grew by 200% from the historical average value, also driven by the surge in demand from new consumers such as the Chinese. And finally there is the dollar effect, which appreciated by 10%.
Fabian, the so-called green coffee is a “commodity”, listed on international commodity exchanges (for example London and New York). It was thought that 2024 would bring stability. This doesn’t seem to be the case. Some leading companies have said they can absorb these increases by sacrificing margins. But what is the overall climate in the sector?
«It is a difficult period for food raw materials, for example also for cocoa. The shocks on the commodity exchanges have produced a roller coaster effect on the price lists, with marked volatility and an upward trend.”
In this context, in your opinion, does the climate or speculation have more of an impact?
«Both factors have their weight but I must say that, from the list graphs, it is clear that there is very strong speculation on the markets».
What impact did the Suez blockade by the Houthis have?
«Very strong in the short term, both for prices and for delays in deliveries. Then, from a purely logistical point of view, the situation stabilized a bit.”
How are stocks doing? Is it true that there is a strong decrease?
«Unfortunately we only know those of the consumer markets and not those of the producing countries. In fact, the international statistics developed by our associations tell us that the trend is towards the thinning of warehouses. And this, once again, favors volatility and speculation.”
In this scenario, are those roasters who, over time, have been able to build long-term supply contracts have an advantage?
“In a certain way, yes. Especially in terms of sustainability checks.”
What are the coffee market predictions for the near future, assuming any reasonable ones can be made?
«I can tell you that global demand for coffee is growing, although not homogeneous in all areas. For example, consumption is rising in Asia and the United States, while it is falling in Northern Europe. Of course, in the future, we will have to increasingly deal with global warming which is causing other producing countries and new qualities to appear on the market.” —
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