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Brazilian currency hits 3-month low, impacting coffee prices

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Brazilian currency hits 3-month low, impacting coffee prices

Weak Real and increased crop estimate put pressure on coffee prices

The Brazilian currency, the Real, fell to a three-month low on Monday, which has encouraged coffee producers in Brazil to increase their export selling. Additionally, Safras & Mercado, a leading consultancy in Brazilian agribusiness, raised its estimate for the 2022/23 Brazil coffee crop to 61.1 million bags, up from the previous estimate of 58.9 million bags. These factors have put pressure on coffee prices.

Arabica futures prices decline

Arabica futures prices fell yesterday, influenced by the weaker Real and improved estimates on the Brazilian crop. In New York, the main contract for March delivery dropped 245 points to close at a one-week low of 189.50 cents, down from 194.20 cents on February 1st, which was the highest level since late December.

Ice Robusta continues to decline

Ice Robusta, another type of coffee, closed down for the fourth consecutive session. The March contract fell $49 to $3,188, down from an all-time high of $3,336 reached on January 30th.

Positive surprise in coffee crop estimates

Safras & Mercado adjusted its coffee crop estimates for Brazil’s 2022/23 season. The arabica crop estimate rose from the initial projection of 43.50 million bags to the current 43.85 million bags. This increase is due to crops delivering slightly more than expected. On the other hand, the estimate for Brazil’s 2022/23 canephora (conillon + robusta) crop was reduced from 23.15 million bags to 21.70 million bags, primarily due to lower production of conillon in Espírito Santo.

Predictions for future coffee shipments

Safras & Mercado predicts that the flow of Brazilian coffee shipments will resume in the 2023/24 season, with a particular emphasis on the growth in the participation of conillon. The projection is that Brazil will ship 44 million bags during this season. Despite good external performance, there should still be a significant amount of coffee available at the end of the 2023/24 business season, with current estimates indicating stocks above 6 million bags. This brings a more comfortable outlook for internal supply, according to Safras.

Impact on price curve

The addition of large coffee surpluses from Brazil’s 2023 crop, along with the expectation of greater production in 2024, particularly of arabica, could lead to negative adjustments in the price curve. Safras’ preliminary estimation is that Brazil will harvest nearly 70 million bags of coffee this year, with 47 million bags being arabica and 23 million bags being canephora (conillon + robusta).

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Coffee Industry and News

Revolutionizing the Coffee Industry: Schaerer Unveils Cutting-Edge Concepts at Internorga

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Revolutionizing the Coffee Industry: Schaerer Unveils Cutting-Edge Concepts at Internorga

Embracing Quality and Technology

In the ever-evolving world of coffee, Hansjürg Marti, Managing Director of Schaerer Germany, emphasizes the importance of investing in coffee concepts that cater to the increasing cost pressures in the catering industry while meeting the rising demands of quality-conscious guests.

Innovative Solutions on Display

At the Internorga exhibition in Hamburg, Schaerer is showcasing cutting-edge coffee concepts that focus on individualization, digitalization, and efficiency. From loyalty apps to automated cleaning processes, Schaerer is paving the way for a new era in coffee business.

Redefining the Coffee Experience

By integrating digital solutions and innovative self-service concepts, Schaerer is leading the charge in revolutionizing how customers interact with coffee machines. The company’s loyalty app, developed in collaboration with Geneva-based family business mia&noa, is set to transform the way operators enhance the coffee experience.

A Legacy of Swiss Excellence

With a history dating back to 1892, Schaerer AG, based in Zuchwil, Switzerland, is a global leader in fully automated professional coffee machines. The company’s commitment to Swiss values and coffee expertise is evident in its product offerings and customer-centric approach.

Driving Customer Satisfaction

With a focus on customization, quality, and customer satisfaction, Schaerer is dedicated to providing customers worldwide with the tools and knowledge to deliver unparalleled coffee enjoyment to their guests.

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Coffee Industry and News

Groupe SEB Reports Strong Financial Performance in 2023

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Groupe SEB Reports Strong Financial Performance in 2023

Positive Sales Growth Despite Currency Challenges

Groupe SEB announced a 5.3% increase in sales for 2023, reaching €8,006m. This growth was offset by a negative currency effect, largely due to the depreciation of several currencies against the Euro, including the Chinese yuan. The company’s revenue was also impacted by the integration of newly acquired companies.

Business Segment Performance

The Consumer business experienced a 3.2% growth, with improvements in all regions and a resilient Small Domestic Equipment market. The Professional business saw a remarkable 26.5% growth, driven by international expansion in Professional Coffee.

Financial Highlights

The Operating Result from Activity (ORFA) for 2023 was €726m, a 17.0% increase from the previous year. Operating profit rose by 22.0% to €667m. The net profit attributable to owners of the parent reached €386m, a 22.1% increase from 2022.

Improved Cash Flow and Debt Reduction

Groupe SEB generated a free cash flow of €805m in 2023, a significant improvement from the previous year. The company was able to reduce its net debt by €204m, leading to a stronger financial position.

Dividend and Future Outlook

The Board of Directors proposed a dividend per share of €2.62 for 2023, reflecting a 6.9% increase from the previous year. Looking ahead, Groupe SEB aims to maintain resilience in the Small Domestic Equipment market and drive growth in the Professional segment, with an operating margin target of close to 10%.

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Coffee Industry and News

American Coffee Brand L’OR Espresso Partners with Ferrari in Global Collaboration

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American Coffee Brand L’OR Espresso Partners with Ferrari in Global Collaboration

New Chapter in Racing

JDE Peet’s has announced that L’OR Espresso has joined forces with Ferrari in a new global partnership. This collaboration will bring L’OR Espresso into the world of the FIA World Endurance Championship (WEC), including the renowned 24 Hours of Le Mans.

Shared Values and Branding

The partnership is based on shared values of passion and craftsmanship, with L’OR Espresso branding prominently featured on the Ferrari 499P Hypercar and driver uniforms. The collaboration aims to celebrate the sensory experience and intensity that both racing and coffee bring to life.

Exclusive Coffee Experience

At WEC events worldwide, L’OR Espresso will be served using their Barista brewing systems in the Ferrari Hypercar team hospitality area, offering a unique coffee experience to racing team members, partners, and guests.

Limited Edition Coffee Range

The partnership will also lead to the launch of a special limited edition range of coffee and coffee brewers inspired by the shared passion and craftsmanship of both brands, bringing a taste of the racing world to coffee enthusiasts.

Exciting Future with Ferrari

L’OR Espresso will extend its partnership to the Ferrari Challenge Trofeo Pirelli, a prestigious championship uniting dream cars and passionate drivers on the world’s top tracks for over three decades.

Enthusiastic Responses

Fiona Hughes, Chief Marketing Officer at JDE Peet’s, expressed excitement about the partnership, highlighting the connection between L’OR Espresso and Ferrari in passion, intensity, and craftsmanship. Lorenzo Giorgetti, Chief Racing Revenue Officer at Ferrari, also shared enthusiasm for the collaboration, emphasizing shared values and a promising journey ahead.

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