May Market & Arrival News

What’s Happening in the Market:

The month of April started with trading of the May 2023 position (KCK23) at 171.  The market continued on a steady upward trend through First Notice Day (FND) on April 20, peaking on 4/18 with a close of 205.  Trading transitioned to the July 2023 position (KCN23) and prices proceeded to slowly decline through the remainder of April to finish the month at 186.  The last 5 days of trading have been in the range of 189-181.  While the rally of the first half of April was largely due to speculative buying, strong bullish concerns over global supplies have continued to add upward pressure.  One factor adding to concern during April about the global coffee supply was the increased risk of El Nino conditions in Brazil, which could cause heavy rains that damage crops right before harvest.  A reduction in Colombia production, down 25% for the month of April (year over year), and a 15% down in exports also added bullish concern for arabica supply.  A strong Brazilian Real (BRL) discouraged producers to sell and bring coffee to market, as the coffee is worth fewer BRL when the real is strong against the dollar. 

There are also many domestic economic factors within the U.S. that are bearish (which could cause the market to go down).  The U.S. has seen three bank failures recently, which could cause concern about the state of banking institutions.  The other major factor to watch is the looming deadline for increasing the debt ceiling to avoid fiscal default.  Congress only has 8 days remaining, where both houses are in session, before the debt ceiling deadline of June 1st.  As the deadline approaches, uncertainty and concern about the U.S. economy could create additional volatility in the markets.

From its origin, some areas of Brazil have begun the arabica harvest.  Conilon (Robusta) harvest in Brazil is in full swing.  In Central America, harvest has been completed in Honduras, Nicaragua, and Guatemala.  Exports of specialty and premium coffees, typically the last to be harvested due to elevation, are being prepared for shipment.  Producers in Central America are working hard on the farms to prepare for the rainy season that will be here soon.  Reports from Ethiopia are for expected delays with the current crop, as well as continued high internal prices.  War in western neighboring Sudan has brought additional refugees into Ethiopia.  A shortage of shipping containers, as well as the closures of rail stations, has impacted the export of coffee from Ethiopia. Transportation of goods is also finding difficulties due to the military commandeering trucks to use.  Due to this risk, many are holding crops back and not bringing them to market until these risks subside.  Exports are down in Ethiopia by 24% over last year. 

The market is currently trading in the July 2023 position (KCN23), with First Notice Day being June 22, 2023. 

Other News & Arrivals:

Learn more about what's happening with the Seeds For Progress Foundation and its tremendous impact on children in the coffee communities. View the annual report. 

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Our exclusive Signature Flower Series features specialty coffee from regions we hold a strong presence in which include Brazil, Colombia, Guatemala, Honduras, Nicaragua, and Vietnam. Each coffee in the Flower Series was developed to showcase the classic and distinct cup profile of the origin country, just as beautiful and unique as the native blooms they are named after. This collection of exceptional coffees can only be found at Mercon Specialty, always offering our clients classic premium green coffee, consistent all year round.

Arriving soon: Limited bags of Costa Rican specialty green coffee - connect with your sales executive to place pre-orders as there are only 35 bags total. 

Questions? Connect with our expert Sales Team!

Jolene Zehnder / Director of Sales  - jzehnder@merconspecialty.com

Michelle Dunaway / Senior Sales Executive - mdunaway@merconspecialty.com

Emily Smith / Sales Executive - esmith@merconspecialty.com

Camila Topke / Sales Executive - ctopke@merconspecialty.com

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Crystina McKenna / New Business Development - cmckenna@merconspecialty.com