This Week in Coffee: ICO global coffee report, Mercon bankruptcy & more
We hope that everyone is doing well as we close in on Christmas. This time of year the news tends to slow down as companies have rushed to have their products out in time for the Christmas period.
In April 1930 the BBC news bulletin was read out: "There is no news". This week we have not quite reached 'no news' but instead have a few choice morsels for your delectation.
The Big Two
ICO release 2023 Coffee Report & Outlook
The International Coffee Organisation has released its annual report and I've put together a summary below:
International, coffee production (by volume) is essentially flat. However, consumption (by dollar value) fell by 2% at the same time. Overall not a great period for the industry at large (specialist coffee has been on a different trajectory though).
In 2023, production shifted somewhat from Asia and Africa and towards South America.
The amount of warehoused coffee has fallen as companies used their stock during a period of high costs and high interest rates.
Production is expected to be up strongly in the 23/24 season. The expectation is this will result from considerable increases in Africa specifically for Arbica beans.
Mercon (one of the world's largest coffee traders) files for bankruptcy
There have been rumours about problems at Mercon for a while and they've now come to a head as the company files for bankruptcy in the United States.
The principal impact will be in Nicaragua where the company is effectively the largest single exporter however Mercon also has considerable operations in Vietnam, Honduras, Guatemala, and Brazil. In the medium and long term, other companies will be able to move into these markets and fill the gap but I assume there will be serious short-term complications in each of these markets.
It's been a difficult period in which to run a successful coffee trading business. Covid caused serious disruptions to supply chains which cost the company millions and then a difficult growing season in Brazil made matters worse.
Other news :
Is a £96 cup of coffee actually worth it? I travelled 5,000 miles to find out via The Telegraph (paywall)
Cuban coffee coming to the UK via This is Money
McDonald's begins opening cafe-styled locations in the US via Time