STiR coffee and tea magazine

24 STiR coffee and tea / Issue 1, 2018 (February / March) $1.1 $1.0 $0.9 $1.0 $2.0 $2.1 $1.7 $2.1 $1.9 $1.4 $1.1 $0.7 $0.7 $0.8 $1.0 $1.4 $1.4 $1.7 $1.8 $1.6 $1.9 $2.7 $2.2 $1.7 $1.6 $1.2 $1.3 13% 12% 10% 12% 19% 17% 15% 19% 16% 12% 11% 9% 8% 9% 11% 15% 15% 16% 20% 15% 15% 18% 14% 12% 11% 9% 11% $8.3 $8.5 $8.5 $8.3 $10.2 $12.9 $11.4 $11.6 $11.4 $11.0 $9.8 $8.1 $8.0 $8.5 $9.0 $9.5 $9.7 $10.7 $9.1 $10.4 $12.6 $14.8 $15.5 $15.1 $14.3 $12.9 $12.3 1990 1995 2000 2005 2010 2015 100 110 106 94 98 87 108 102 144 118 109 128 103 116 107 129 118 132 121 136 146 146 149 144 147 150 114 Coffee Trade Tranquility By Dan Bolton C Source: Dave Seminsky, Sumerian Coffee, Shanghai, China. offee will benefit as Asia asserts itself as a major hub of global trade, supple- menting traditional producers and possibly surpassing them if weather pat- terns continue to lower yields―but low prices persist. World coffee exports rose to an all-time high in 2016/17. Shipments were 122.45 million 60-kilo bags, a 4.8% increase compared to the previous harvest. Vietnam is now the world's second largest coffee exporter and China is the world's ninth largest producer of arabica. China's domestic market is projected to grow to $95 billion (¥600 billion) by 2020. Output in Yunnan province, which produces 95% of China's coffee, totaled 58,600 metric tons in 2017. The coffee exchange in Chongqing, in southwest China, reported $2 billion (¥13 billion) in trade since opening in June 2016 with $1.55 billion (¥9.7 billion) in trade in calendar 2017. Meanwhile, the new Yunnan Coffee Exchange is bringing spe- cialty grades to market at prices significantly higher than commercial grades with exports to 30 countries valued at $393 million. Peng De, general manager of the Chongqing Coffee Exchange intends to "change the existing industrial pattern" and gain pricing power by becoming the world's third largest coffee trading center (behind London and New York). In a report published by the Xinhua news service, Peng De said "advanced logistics and service, and the good quality and output of coffee produced in neighboring Yunnan Province will help the municipality realize its goal." In 2018 bears are expected to continue to outnumber bulls. Depressed coffee prices resulted in less volatility with lower prices the past two years. This stability is due to arabica trading under $1.20, down 50 or more cents per pound, a price floor that threatens farm sustainability. Global Coffee Pricing Retail vs. Cost Paid to Farmers (per kilogram) The red colored line is green coffee exported from origin indexed to 100 ICO executive director José Sette

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