Hey Coffee Roaster, are you new to Genuine Origin (GO — that’s what most roasters call us)? Maybe you’re new to roasting green coffee. Well first, welcome aboard! We’re so glad you’re here and honored to be part of your coffee journey!

We recognize that buying green coffee can be tricky — contracts, origin differences, different qualities, price swings, the C-market…you name it —make coffee buying…well…let’s say “unique” or perhaps, downright challenging. And that’s part of reason why we exist. So let’s try to unpack it all.

GO was born to demystify and simplify the green coffee buying experience for coffee roasters. Why? Because we want you to buy with confidence, so you can spend more time on your passion (ie — Roasting) and grow your business. And hopefully we can grow right along with you.

To that end, we’ve put together some resources to help you get the most out of our unique supply chain and ordering system. We’re very different from other importers, mainly in that it is a lot easier to buy coffee with us.

GO is perfect for Roasters who want to…

• Buy specialty green coffee at affordable, transparent prices
• Stock up on Roastery Essentials that we generally offer all year round (Your daily roasts absolutely MUST have consistency)
• Direct cash flow to other parts of the business instead of tying it up in large batches of green coffee inventory
• Have the flexibility to buy what they need when they need it
• Buy single 65-lb boxes of green coffee, or mix and match boxes from different lots
• Manage your entire order history by logging in to My Account on the GO website
• Enjoy tailored customer service and a streamlined coffee buying experience for roasters of all sizes

GO always guarantees…

• FREE shipping — Whether you order a sample, a box, or multiple pallets, shipping is always FREE within the continental US. We even offer palletized LTL shipments at no additional charge, unless you need a lift gate (that’s $25 extra)
• No contracts and no minimums — buy the amount of green coffee you need, whenever you need it, right on our website
• Quantity discounts — Get 5¢/lb off on 3 boxes, 10¢/lb off on 5 boxes, 15¢/lb off on 10 boxes, and 30¢/lb off on 24 boxes, applied automatically when you checkout! You can even mix and match different coffees and still get the discount too
• Buying forward for the next 90 days to lock in the coffee you want, for the shipment date you want it for, without paying for it until the coffee ships. We don’t even charge warehousing fees for it. Just select your shipment date at checkout for up to 90 days later and enjoy a predictable flow of green coffee right to your roastery

The specialty green coffee from GO is…

• Evaluated and scored by Q-graders — They also supply the flavor notes that go on every coffee available on GO’s website. Don’t trust us yet? Just look for an Order Sample link below the Buy button on any coffee page to try it yourself. Each sample is 300 grams of green coffee. (If the Order Sample link isn’t there, we don’t have any samples available for that coffee.)
• Sourced in partnership with our huge network of sister companies based in origins around the world. We follow our Volcafe Way farmer support strategy to train producers in farming as a business, providing long-term solutions and innovations for quality and productivity improvements
• Packed in 65lb GrainPro-lined jute bags or GO Green bags, then packed again in sturdy, 100% recyclable, stackable boxes with strong handles
• Stored in our East or West Coast Warehouse — All of our inventory is live on our site. If coffee is listed as Afloat, the coffee is at origin, on a boat, or in transit and can’t be shipped to you just yet.

Some things you should know about GO are…

• We’re here for you — GO is more than just a website. The coffee gurus on our team can help you purchase the right coffee for your roasting business. We’re always happy to answer any questions about our inventory, your order, or even help you set up a shipping schedule, so your roastery is always stocked with fresh green coffee. Just get in touch!
• It’s probably best to add our email address, though, whether you’re using Gmail, Hotmail, or even AOL. Even if you don’t subscribe to our newsletter, we’ll send you updates about your order, tracking info, confirmations, etc.
• We’re active on Instagram, Facebook, Twitter, YouTube, and our blog with news from coffee origins, inventory and service updates, live cupping sessions, and more. Follow us for all things green coffee

Ready to get started with GO? Start shopping for specialty green coffee now on our website, or send us a message for more information about what we do.

Green Coffee Export Terminology

Cherry vs. Parchment Coffee: In some origins, farmers sell their coffee to exporters as freshly harvested cherry with little to no processing or dried cherry. In others, the coffee is processed at the farm level. The coffee may be sold to buyers in its (wet or dry) parchment layer to protect it against fluctuations in temperature and humidity. Once the coffee is milled to remove the parchment, it becomes green coffee.

Green Coffee: Raw coffee that’s been processed and milled, but not yet roasted. Green coffee is sensitive to humidity, so it must be stored properly to avoid mold and loss of flavor.

C-Market: Green coffee is bought and sold as a commodity on the New York Stock Exchange every day. Arabica and Robusta species sell at different prices emphasizing the keen difference in consumer tastes and demand. The C-Market futures determine the global trading price of most coffee (C-Price), and big fluctuations defined by supply and demand can significantly impact the price farmers receive for their coffee.

FOB Price: The free-on-board (FOB) price is what the seller pays to get the coffee onto the outbound ship at the port. Included in the FOB price is the cost of paying the producers, local costs for milling, warehousing, transportation, fees for any intermediaries, export taxes and any other fees involved in getting the coffee onto a ship. The buyer then takes over the shipment and covers the remaining overseas shipping, insurance, and other costs incurred to get the coffee to the destination port.

FOT Price: The free-on-truck (FOT) price is what the seller pays to only get coffee onto the trucks bound for the port. In this case, the buyer covers any overland transport costs and the fees to load coffee onto the ship.

Farmgate Price: This is how much the producers actually receive for the coffee they grow, often paid by mills or exporters. It is usually between 60–80% of the FOB price, but can vary by country or region. Daily farmgate prices are sensitive to C-market prices, and volatile fluctuations can be detrimental to the stability of a producer’s livelihood. However, when coffee is contracted or bought forward at agreed-upon prices, this helps lock in a producer’s future income and makes it less vulnerable to market swings.

Volcafe Way: Genuine Origin takes sustainable green coffee further with Volcafe Way, our approach to setting farmers up for long-term success. We work directly with our producers through field teams to improve their coffee quality, farm productivity, and harvest yield with technical assistance and training. Volcafe Way trainings and implementations are a service provided to farmers free of charge or obligation.

Green Coffee Sample Terminology

Type Sample: This kind of sample is representative of quality and is generally not meant to represent an available quantity of coffee. Often the first sample received from a region or washing station, sometimes right at the beginning of the harvest. The sample, still in parchment, is taken from the drying beds and milled by hand, to give a general indication of what the coffee will be like for that crop. Type samples can also be taken from already sold or previous harvest lots, to introduce a new quality for consideration, which can help foster interest in the next season of coffee from that shipper/region/producer.

Offer Sample: This kind of sample is representative of both quality and quantity, from a lot available to purchase. If a buyer likes and contracts based on an Offer Sample, the lot is then spoken for and the sample can sometimes serve as a stand-in for a PSS. This sample comes from producers, cooperatives, or exporters when they offer a specific lot of coffee for sale. At this point, most of the coffee is usually still in parchment and awaiting the sorting and grading process.

Stocklot/Representative Sample: This kind of sample is representative of quality, quantity, and location. After processing (milling and sorting), coffee rests at the mill or in export warehouses while buyers and sellers negotiate contracts. These samples are taken from a selection of the bags in a single lot and are blended to create a composite sample that is used to represent the overall quality of the lot.

Pre-Shipment Sample (PSS): This kind of sample is representative of a lot of coffee selected to fulfill an agreed upon contract. After the coffee is milled and prepped for export, samples are taken from each bag in the lot before it’s shipped and blended to create a composite that represents the entire shipment. The pre-shipment sample is used to confirm that the reserved coffee meets quality expectations before they’re given the green light to proceed with shipment.

Arrival Sample (ARR): After arriving at the destination port the coffee is considered “Landed/Arrived” and is available for purchase or delivery to the final customer (and final sample approval). This sample is taken from the green coffee shipment that arrives in container(s) which is then unloaded at the importer’s warehouse. The arrival sample is the best indicator of the coffee you’ll receive when you buy green coffee with Genuine Origin.

Green Coffee Contract Terminology

Roasters can buy green coffee on-demand with Genuine Origin. You don’t need to sign a contract, and pricing is available right on the website. However, it’s still a good idea to familiarize yourself with some common terms that show up on green coffee contracts like the following:

SAS-NANS: Subject to approval sample; no approval, no sale. Buyers and sellers often draw up contracts before samples are sent out. However, the seller will only fulfill the contract if the samples are approved.

SAS: Subject to approval of pre-shipment sample.

SAPDS: Subject to approval of pre-shipment and arrival sample. This can also be referred to as, SAS, Arrival replace.

SASR: Subject to approval sample — replacement. In this case, if the buyer rejects the sample, the seller can send a new sample or offer more options to the buyer.

Green Coffee Buying Terminology

Afloat Coffee: Fresh coffee that’s on a sailing vessel. At Genuine Origin, Afloat is a catch all for coffees that are at origin, on a sailing vessel from origin, in transit from a port or traveling between our warehouses. Coffees that are on a vessel or at origin will show up on Genuine Origin’s Afloat page. You can usually pre-order these coffees or you can keep an eye on them until they reach our warehouses.

LTL Shipping: Less-than-truckload (LTL) freight shipping is when a shipment only takes up part of a trailer. The shipper only pays for the portion they use, and other shippers can fill up the remaining space.

Shipping coffee from Genuine Origin is always FREE, whether you order one box or multiple pallets. If you order ten or more boxes and prefer LTL shipping, that’s free too! We’ll palletize your coffee and put it into a truck — perfect for your loading dock. If you don’t have a loading dock and need to request a truck with a Liftgate, that’s the only time you’ll have to pay a $25 handling charge.

Buying Forward: Roasters buy forward when they want to lock in a price and/or secure a certain coffee. Most green coffee importers require Roasters to sign a contract if they would like to reserve coffee in advance. They will also charge Roasters carry / warehouse fees for coffee they buy forward.

At Genuine Origin, buying forward is a lot simpler! If you discover a coffee you love on our website, you can order multiple boxes of that lot and schedule future shipping dates for up to 90 days later. At checkout just select the shipment date and finish ordering. You’ll lock in your price, you won’t pay warehousing fees and you’ll only pay for the coffee when it’s ready to leave our warehouse. Buying forward is an excellent way to secure a stable supply of your favorite coffees without tying down your cash flow in green coffee inventory.

###

Have a question or want to know more about buying green coffee? Check out our blog or FAQ. Of course, you can always get in touch with Genuine Origin here for further information about sourcing specialty coffee for your roastery.

Beneficio de Cafe Pastores Mill, Genuine Origin’s milling operation in Antigua, Guatemala, was not originally constructed to process coffee. In fact, it was built in the 1800’s as a flour mill. Pastores bought wheat, processed it and sold it as flour until about 1910, when it was converted to coffee receiving and processing.

Today, after more than 200 years of change and adaptation to change, Pastores is adding enhanced milling and drying functionality to its arsenal.

For years Pastores relied on traditional wet-milling equipment. It was efficient in many ways, but keeping the mill running was water and labor-intensive. Cherries were brought to our receiving station where they we sent to canals to separate floaters.

The new wet mill makes Pastores more efficient. Processing cherry requires 90% less water and milling capacity has increased without any impact on quality.

The slope and angle of the receiving station was modified to allow a better flow of cherries. The new Pinhalense depulper uses almost no water in its process. The cone size shape depulper has layers which remove the cherry skin according to the size as they go down the tube. The separators sort the cherries by density replacing the long canals that were previously used.

Patios were replaced with an enhanced brick that was specially designed to absorb humidity. Unlike regular concrete patios, the new brick does not damage the beans when the sun is too intense. Its humidity absorbing material keeps the brick relatively ‘’fresh” while the sun removes water from the surface area.

The new wet mill operation puts Pastores a cut above its competitors and is definitely an upgrade. But behind Pastores quality and innovation is an adherence to traditional hand-sorting. The mill boasts about 100 sorting desks. Each sorter is capable of producing roughly one 69 kg bag of exportable green coffee per day. The process is slow, but the highly detailed process ensures an extremely low defect rate — perfect for specialty coffee buyers. Finished bags are stored in the Pastores warehouse before being dispatched to their final destination.

###

Check out Genuine Origin’s freshest coffees from Beneficio de Cafe Pastores Mill and other Guatemalan favorites at https://www.genuineorigin.com/guatemala

The price of Green Coffee generally gravitates around the regulated futures exchanges which, for both Arabica and Robusta, used to operate with real-live humans in New York and London respectively but now exist virtually!

Arabica prices are quoted in US cents/lb and the standard contract refers to 37500 lbs of exchange certified arabica coffee (or 283.5 bags of 60 kg).
Robusta prices are quoted in USD/metric ton and the standard contract refers to 10000 kgs of exchange certified robusta coffee (or 166.67 bags of 60 kg).

Market Participants

Many thousands of market participants, some of whom are actually involved with the physical commodity, but most of whom are not (other than as coffee drinkers), ensure that the futures markets maintain liquidity — i.e., at any one time, there are buyers to match the sellers — and the yearly traded exchange volume exceeds physical coffee consumption many times over.
The futures markets are used by physical coffee participants (coffee producers, traders and roasters) to manage their price risks and to act as a ‘sponge’ — soaking up excess production or releasing stocks when fresh beans are scarce.

The markets are also used by managed money and speculative funds seeking returns on capital. Within the last 30 years the total value of funds seeking investment returns has grown exponentially, and a very small percentage finds its way into the coffee markets.

“One of the main purposes of the future markets is to serve as a hedging mechanisms for producers,” noted Mauricio Jimenez, General Manager at Genuine Origin. “The reality is that, even in the 21st century, over 90% of the producers don’t have the means to hedge their price risk due to economies of scale, liquidity needs and misinformation.”

Price Volatility & Its Impact

Over time, futures markets come to reflect the basic underlying economic principles of supply and demand, but often with spasms of price volatility which can be caused by disruptive shock events (eg — a frost in Brazil) resulting in large price swings in both directions as shown in the below chart.

Other macroeconomic factors can also determine longer term underlying trends. Global recession, for example, can indicate an overall reduction in consumption and hence initiate a move to lower price levels. Exchange rate movements in some important coffee producing origins, ie. Brazil, also have a significant correlation to the underlying futures prices

Unlike oil, coffee supply cannot be turned on and off like a tap. Periods of higher prices attract additional investment into production which generally takes two or more years to realize, resulting in a time-lagged price cycle which, together with natural on — off crop cycles, can accentuate market swings.

Differentials

The evolution of the regulated futures exchanges and its widespread use as a price risk hedging instrument for the commercial actors in the trade — ie. producers, traders and roasters — resulted in the development of the price differential — simply put, the difference between the outright price of the physical coffee to the underlying worldwide price indicator (the Arabica and Robusta futures exchanges.).

The differential price is also expressed in US cents/lb for Arabica and in USD/MT for Robusta. Differentials are quoted by physical trade participants through their offer lists, for nearby and forward positions, and the expected difference between the highest and the lowest quote reflects the different costs and opinions from the various actors.

The general assumption was, and still is, that differential price movements — and hence risk — are considerably less than the underlying coffee price movements. By creating price differentials, does it become possible to manage price risk more effectively ? Maybe…

Differentials add another layer of complexity — each quality from each country trades at its own differential — Brazil mainstream naturals tend to trade at a negative differential, Colombia Excelso and Kenya AB FAQ at a positive differential. The simple chart below, focusing on only the most standard quality from each of these three origins, shows how volatile some differentials can trade over time. In the case of Kenya, differential price moves alone can be greater than the level of the underlying futures price.

Differentials principally reflect the origin specific Demand / Supply picture. A larger crop, for example, would tend to put pressure on the differential price, and vice versa. Any form of supply shock — eg. protest and strikes in Colombia or a national election in Uganda — is likely to increase the differential price of that specific origin beyond its borders, although not necessarily within its borders. Currency de/revaluations can also influence differential prices dramatically.

To summarize, the final price of any green coffee consists of the sum of

1. The underlying world coffee price — as quoted by the relevant futures exchange
2. Its differential price — as determined by country specific factors

Both can be volatile, although it is generally accepted that, for most coffees, the differential price changes less frequently from day to day.

Volatility and Market Movements

In these weeks following the frost in Brazil, no better time than the present to reflect on the price movements of the last 40 years — and their underlying reasons — to appreciate the historic challenges at both ends of the coffee value chain.

Looking back at the history, severe climate events such as frost and drought across Brazil have led to significant coffee price increases. The recent events are no exception. However, the current price situation is more complex and unique extending beyond Brazil, we can’t recall a similar situation with the current combination of events happening in the past:

1. Drought, followed by frost, followed by potential additional drought in Brazil: after two back to back episodes of frost in July, the country is now awaiting rainfall from September to November in order to bring about blossoming. Parts of the arabica growing regions in Sul Du Minas and Mogiana were already impacted by a harsh drought which began from October last year impacting the current crop (which has now finished it’s harvest period), while the damage caused by frost has had an impact on the coffee trees that will be harvested in May next year. The damage from the frost can be very visible immediately as farmers usually start to prune and stump severely impacted trees. However, in the medium term the total damages of both drought and the frost combined are noticeable only after the flowering occurs — which may see further pruning and tree stumping taking place if the blossoms fail. Brazil now needs good rains to end November. Without rains to encourage flowering and then also timely follow up rains to “set” the flowering, coffee agronomists expect a serious loss to next year’s harvest potential, which is an “on-cycle” crop. The more erratic the rainfall the poorer the flowering and ‘set’, and hence the more volatile the upcoming price movements.
2. The adverse weather situation in Colombia: As the second largest producer of Arabica coffee worldwide, Colombia is facing a complex situation — somewhat opposite to that in Brazil’s arabica growing regions. The weather across Colombia’s coffee growing regions have faced above average rainfall preventing adequate heat stress on the trees which is requisite to a good flowering. Less flowers essentially mean less cherries. Added to the internal crisis that the country experienced some months ago, where strikes and road closures affected coffee exports, disrupted and reduced coffee supply feeds price volatility.
3. Mild Arabica deficit overall: Many East-African and Central American coffee producing origins have seen little investment in production over the past three years due to years of low coffee prices. This, together with off-cycles in several origins, will result in a statistical deficit of Mild Arabica in the coming season.

The futures price exchange reacts to the events effecting supply and demand, especially in the world’s largest producing countries. When the supply outlook is below expectations or simply disappointing, underlying prices appreciate. While the frost in Brazil has come and gone and the damage is more or less evaluated, the coffee market is heavily dependent on good flowering across Brazil to compensate for the upcoming Mild Arabica deficits. With so much uncertainty and weather playing such a key role, coffee prices will almost certainly remain firm and very volatile.

*********

This article was originally published by Genuine Origin’s sister company, Volcafe Select in a three-part newsletter and adapted as a single blog post.

The 2021 harvest season in Guatemala came to a close earlier this year with some hurricane-induced delays, but also with exciting improvements in yield and cup quality. We received an update from our sister company, Volcafe Guatemala, about what they’ve been experiencing on the ground recently.

Guatemala Green Coffee Harvest 2021

Last year, Guatemala was hit by two hurricanes at the beginning of the harvest season in November, displacing people across 21 municipalities in key coffee departments like Alta Verapaz and Huehuetenango. Eta and Iota destroyed around 945 Ha of land in an estimate by ANACAFE. Severe weather aside, road closures and local travel restrictions compounded additional delays in the coffee harvest from late December to early January, inflating internal coffee prices as exporters scrambled to secure supply.

“Everyone was desperate to get coffee, and competition was a bit fierce. Luckily we have our loyal clients and producers in programs and projects that give us the certainty that we will have coffee delivered to us with prices that won’t fluctuate as much because of internal market rallies,” says Carlos Umanzor, Specialty Coffee Trader at Volcafe Guatemala.

The rainy season in Guatemala these past two years has been more stable and plentiful, starting earlier in April and ending later in December. “The rain led to good cherry development and big grains in the farms,” says Carlos. “The quality from this past harvest is even better than last year, across the board.”

Due to the harvest delay, internal prices skyrocketed, and producers were able to reap the benefits. “With the market going up, producers were able to sell their coffee at much better prices than the past four years. In some cases, we saw people selling at 50% more than they did two years ago. It was a relief because we’ve had some really bad years,” says Eduardo Cabrera, Purchasing Manager at Volcafe Guatemala.

COVID-19 Update

After a recent surge in virus cases, Guatemala is tightening restrictions to limit outdoor meetings and public events. However, the country’s vaccination program has barely made any headway, with only 5% of the population vaccinated with their first dose.

The local harvest labor force in Guatemala traditionally migrates back and forth from north to south. With the pandemic, producers in areas like Huehuetenango found themselves paying 30–40% more for pickers due to travel restrictions and a lack of available labor.

What’s New with Guatemala Green Coffee

Genuine Origin received the latest containers of fresh crop Guatemala 20/21 recently, and a sizeable percentage was already pre-sold through forward buying. We’re always excited to receive green coffee from Guatemala, and cup quality continues to exceed expectations year after year. In our webinar from May last year, we particularly enjoyed seeing improvements in the livelihoods of our partner producers as our relationships grow.

Genuine Origin has always been a service-centric green coffee supplier, and our sister company, Volcafe Guatemala holds the same values. “We recognize that the younger generation is entering the coffee business, whether they’re entrepreneurs, roasters, or importers who are taking over,” says Carlos. With an active social channel on Instagram, Volcafe Guatemala enjoys sharing everything they experience with their audience, especially with origin trips still out of reach.

“We [at Volcafe Guatemala] want to let them know we’re friendly and welcoming and can be reached anytime via Instagram, Facebook, Zoom, Whatsapp, etc. At the same time, we’re also working this inwards to our producers,” says Carlos. Volcafe Guatemala is constantly reaching out to farmers and helping them improve their implement best practices with Volcafe Way. As a Trader who’s often in the field, Carlos constantly engages producers in conversations around their coffee and gives them as much feedback as he can.

“When farmers give me samples of their coffee, they’re giving me part of what they harvested and planted, and I have to treat it with care,” he says. “I get a lot of questions about what varieties to plant, where we send our coffee, etc., and they know me as the specialty guy whenever I’m in the field. We want producers to know we’re open to trying new varieties and processing methods and want to know about all the weird stuff they’re trying so we can show it to our clients and stay ahead of the curve,” he adds.

Guatemala’s coffee landscape is changing. Our team reports that there is more activity than they have seen in decades. “We’re starting to see the sons and daughters of producers bringing new ideas and interests. It’s good for the country because you start to see that people who work with coffee achieve some sort of status. As exporters, we need to be very active and offer them something they can’t get on their own,” says Eduardo.

What Coffee Roasters Can Expect from Genuine Origin

If you’ve watched Genuine Origin live cupping sessions on Instagram, you’ll know how excited we are to taste the latest crops from some of our favorite Guatemala projects like La Morena, Candelaria and Cubulco, as well as micro-lots such as Pastores Mill Antigua Natural.

La Morena is a very versatile coffee with many application opportunities like single origin espresso, cold brew, blend components, and more. Black cherry notes add a level of complexity to the cup, along with flavors of milk chocolate, nougat, red fruit, and almonds.

In 2016, Genuine Origin imported 32 boxes of this one-of-a-kind La Morena coffee produced by women-owned farms, and now in 2021, we’ve increased supply to a full container. “We started with small batches and four producers, and now we have 23 women producers bringing in 35–50 bags each,” shares Carlos.

Maria Renee Morales, Assistant General Manager at Volcafe Guatemala, launched the official La Morena bracelet project in partnership with Wakami Guatemala to maximize the impact of this coffee on the livelihoods of women artisans in the country. Roasters who buy a box of La Morena coffee will also receive a bracelet to commemorate their involvement in advancing gender equality in coffee production. “La Morena has a special place in my heart,” says Jen Hurd, Genuine Origin’s West Coast Sales Manager. “Knowing that we’ve been able to grow that, get more producers involved, and have the bracelet project alongside of it is super awesome.”

The Baja Verapaz Cubulco 2021 is another coffee to benefit significantly from Volcafe Way efforts in the Cubulco area. “It’s not an area that’s well known for specialty coffee, but when three producers from Cubulco knocked on Volcafe Guatemala’s door years ago, we began a partnership that grew from 1–2 technical assistants in the field to more than 10 in the department,” says Carlos. “We went from micro-lots to full containers for GO, and we’re seeing more coffee being produced in the same amount of land and more jobs opening for the local communities.”

For a consistently solid Guatemalan coffee, the Los Huipiles SHB EP 2021 now comes in an organic lot with the same fruity flavors that are part of the Huehuetenango coffee legacy. The Los Huipiles line brings together the best in the region to create an approachable and well-balanced coffee, complete with traditional Mayan patterns and bright colors symbolic of the cultures that make up the area.

Find more about our Guatemala green coffee collection at Genuine Origin’s Guatemala portfolio on our website: https://www.genuineorigin.com/guatemala

From a peak of over 30,000 new COVID-19 cases daily in Colombia last month, the country is now seeing closer to 7000 daily reported cases. ICU occupancy rates have also fallen from their critical peaks. The National Government as well as local ones have announced a lift on most restrictions to reactivate the economy.

With regards to the protests and street violence that ripped through Colombia in May and June: in the last 30 days there have been isolated cases in the South part of Bogotá and Cali. However, terrorist threats are a growing concern. A well planned murder attempt on Colombian President Ivan Duque was executed during a visit to the Northeastern city of Cucuta. Dissident former FARC rebels with the aid of a former Military Captain and leaked information from the President’s security staff led to an attack on the President’s helicopter while landing at Cucuta’s airport.

Months of strife have made the coffee-growing regions of Huila, Cauca and Nariño harder to visit. Our partners report that getting coffee from farms to dry mills and ports has become increasingly complex.

“We are still seeing challenges and delays in logistics from Colombia”, said Juan Manuel Alvarez, Genuine Origin’s Operations Manager. “Although Colombia has cleared their port backlog in Buenaventura, Cartagena and Santa Marta, equipment availability remains an issue. The balance of empty containers for exporters is not yet at normal levels.”

Domestic prices in Colombia have seen record levels. This is a combination of the recent C-market spike, a devaluation of Colombian currency against the dollar and a strong domestic farm gate differential. The currency’s weak performance against regional peers (such as: Peru; Chile; Brazil; and Mexico) reflects the investment downgrade by Moody’s and Fitch as well as the effects of the protests and roadblocks that paralyzed most of the export flow of goods.

Tolima is now entering the later part of the harvest. Huila, Cauca and Nariño approaching mid-harvest. Santa Marta is expecting an early start in October, with good volumes in sight.

###

Copyright Genuine Origin

Find out more about our Colombian coffee collection on our website — https://www.genuineorigin.com/colombia

In late July a severe frost hit the coffee growing regions of South de Minas and Parana. Yet another cold front hit the following week. These events caused extreme gyrations in the C-Market — the coffee futures market. The market roared up past 200 cts/lb, but has since dropped back down to 174.60 ct/lb (as of the writing of this post). These fluctuations are affecting all market participants: producers; roasters; green importers and speculators. Ultimately, these price changes will impact coffee drinkers.

With the market swinging and prices changing quickly, Coffee Roasters need answers and guidance. We asked Mauricio Jimenez (MJ), the General Manager and Green Buyer at Genuine Origin, to help us understand what’s going on and how to react to the market.

GO: The C-Market went way up, then retracted. What happened?

MJ: The frost in Brazil in late July led to a surge. Part of that surge seems like it had to do with the frost that was to follow. When the new cold front was not as bad as initially expected the market collapsed.

The market is always looking forward, when the first cold front hit in July the market went from the 150–160 range to 180–190. Then the second (late-July) cold front was severe; it took us to 215. But the second cold front was a classic “buy the rumors, and sell the news”. Once the second frost passed the market went back down.

GO: What is the role of speculation in the C-market? What is open interest and the role of futures contracts in all of this?

Open interest refers to the total number of contracts that are open. In a futures contract you need a buyer and a seller. When the open interest grows it means that more people are interested in a market. Speculators are not necessarily the ones to blame for everything. Speculators serve a function: they provide liquidity, but sometimes they are trend followers. Their actions can exaggerate the market moves, but, at the end of the day ,the market will always find an equilibrium

The nature of coffee always generates exaggerated moves to the upside, and the downside. You don’t destroy demand by increasing prices a few days as prices take days to reach final consumers, and producers can not cut down their trees immediately as soon as the price goes below the cost of production… in a sense you need extended periods of low, and high prices to curve demand, and supply, and balance the complicated global supply chain.

GO: How high and low could the market go in a 6 month period?

MJ: Prices are cyclical. In the last 12 years we have seen the market break the 200 cts/lb mark during 3 periods, and the 300 cts/lb mark only once. On the low side, the market only went below 100 cts/lb once during this period. The market sometimes needs extreme swings to curve demand and supply of coffee.

GO: Do you expect more market volatility in the coming weeks or months? And are there any signals roasters should look for that precipitate those swings?

MJ: The market is going to keep us busy in the coming weeks. I wouldn’t be surprised to see more volatility. During the next few weeks and months market players will be looking at:

• How many hectares the Brazilian producers prune as consequence of the dry weather and the frost
• Rains during the next few months
• Flowering for the next harvest
• We also need to pay attention to the global logistics situation, and the demand behavior.

GO: Will Genuine Origin’s prices fluctuate with the market — whether it goes higher or lower?

MJ: Like most importers our prices will fluctuate as we continue to buy new coffees. If the C-Market goes higher or lower this will impact prices. That said, we try to minimize the changes because we understand that our customers value stability. But we need to balance competitive prices with paying higher market prices.

GO: What can roasters do to protect themselves against market shifts?

MJ: Roasters need to understand their business as much as possible. That means forecasting, planning, and acting accordingly. I would recommend buying as you go. Take advantage of GO’s free shipping with no minimum program and stock up as needed.

I also would not be afraid to raise your prices. Inflation is real, supply chain issues are real, market gyrations are real. If necessary, take the conversation to your consumers; explain to them that you are have to pay more to your suppliers — ultimately, the suppliers of your coffee are the farmers.

Finally, don’t panic. The market is dynamic. It is always changing and prices at current levels are healthy for producers, which, in the end, should result in a stronger coffee supply chain.

GO: How are the farmers and families in Brazil doing after the frost? Will they be ok economically?

MJ: A coffee farm is kind of like a coffee roastery. You don’t build it for a few days. You invest in it for the long-term. Many producers will have to start from scratch and are not going to have a income from coffee during the next 2–3 years.

Many people think that coffee in brazil is only produced in large estates, and that is far from true. Many families are hurting, and on top of losing their production they have open contracts with exporters, cooperatives, and input manufacturers that they are not going to be able to fulfill for delivery in 2022, and 2023.

The Brazilian government just announced loans for coffee producers. Let’s hope it helps those farmers.

###

Copyright Genuine Origin

Find out more about our Brazilian coffee collection on our website — https://www.genuineorigin.com/brazil

On Tuesday, July 20th a severe frost hit Brazil, primarily in the growing regions of Sul de Minas and Parana. Whereas Parana is a small producer, Sul de Minas is a major coffee-growing region.

The first frost - which hit the same regions - struck in late June; it was significant but only caused minor damage. The C-market price increased roughly 8 cents in two days with a subsequent sell off when it was discovered that the scope was limited to a few hundred thousand bags. The frost that struck on July 20th was severe in scope.

After the second frost, the C-market has rose roughly 50 cents in just six days. However, the market can be difficult to understand. Mixed in with the rise might be fears of a third frost which is due to hit Sul de Minas and Parana on July 29 and/or 30th. We have not seen three frost conditions before, so the effects here are not totally known.

While it is still early to have a firm grasp on the extent of the damage, most experts are estimating that this will affect millions of bags. For roasters it generally means higher prices on most of the green coffee they buy. After flowering happens in Brazil in a couple of months, we’ll have a better understanding of the damage, but for now, we are all living through the damage and volatility.

Genuine Origin asked Mauricio Jimenez (MJ), General Manager at Genuine Origin, and Ryan Delany (RD), Chief Analyst at Coffee Trading Academy to help us understand what is going on in the market, how producers are being affected and how roasters should source green coffee in this period of volatility.

The pictures from the field teams in Brazil look terrible. Are the coffee plants dead?

RD: It is likely that some of the younger trees have died, but in general frost does not kill a coffee plant. Frost attacks the areas of the plant with the thinnest membrane so it is primarily the leaves and what’s called the “new growth“.

These are both relevant, let’s look at the new growth first. The new growth is the green shoot that comes out of the end of the branch during the harvest and this is where the buds and flowers appear that will become the following year‘s harvest. So frost damage does not impact the current harvest but it reduces the next year‘s harvest.

One of the challenges in forecasting the damage is that there are still many variables between now and next year‘s harvest. For example the weather has been quite dry the last few months (this actually facilitates frost because it gets colder in dry weather), but if we have good rains and weather over the next couple of months the plant will recover a lot of the lost volume.

However the farmers may decide that the damage is so severe that rather than trying to encourage the tree to grow a small crop this year they may just prune so that they have a better crop in 23/24.

Other factors include farmer care, more frost damage and the price of coffee.

The other thing we have to look at is the damage to the leaves. The 2nd frost burned many leaves off. If the leaves are sufficiently burned, then they fall off. This makes the trees more vulnerable.

The leaves form an insulation barrier for the core of the plant. Now that those leaves are lost, the tree is “naked” so to speak and even more vulnerable to the next frost predicted this week. We haven’t had 3 frosts in a row strike coffee before so the effects here are not totally known. The fear is that since the trees have already been burned, the frost may penetrate deeper into the plant and actually kill the tree.

MJ: Although the photos are abysmal there are some reasons to be hopeful. Coffee trees are hardy. Younger plants tend to be more vulnerable to cold than older plants because they have fewer leaves. Frost makes the leaves turn black and fall off.

Because a plant without leaves will not yield, producers will prune to encourage the growth of new branches and leaves. Pruning is a viable option, but it could take years for a pruned coffee plant to produce at its full potential.

Why is the frost having such a strong impact on the C market?

RD: Brazil is the world’s largest producer of coffee and the largest producer of Arabica by far. Every year the coffee consuming world relies on Brazil to produce the bulk of the coffee. If that production is meaningfully compromised, the market must reprice to reflect the shortage. Think of how the price of hand sanitizer skyrocketed when there were shortages during Covid; the same thing happens to coffee. When Brazil sneezes, the coffee world catches a cold.

Why is this affecting the price of coffees that are already listed as in stock on GO’s site?

MJ: We raised prices on 2021 coffees to protect ourselves against these price shocks and the impact it is having on sourcing. We needed to raise costs now in order to mitigate the effects in the future. Our prices are based on current market rates and the cost of replacing existing stocks.

What are the Genuine Origin field teams witnessing on the ground?

MJ: People often think of Brazil as a big coffee grower. They think of industrial scale production. What we forget is that behind all of that coffee and those farms are families. Many farmers have sold a good percentage of their crop for the following year.

How long do you think higher prices will last? Will it go up, down, stay put?

MJ: No one has a crystal ball. In my experience, coffee tends to exacerbate market swings. A producer needs to see high pricing for a lengthy period of time in order to produce/plant more. Coffee isn’t something you plant and then forget about. You’re developing a plant that will/should for the next 20 years.

RD: This is a changing picture. What we know for sure is that we will see volatility. Most analysts — myself included — were anticipating higher prices for the second half of this year even before the frosts. Now that the frosts have materialized, it seems likely that we are in for a pretty intense bull market.

A lot will depend on how this frost plays out this week. If it is as bad as the last frost, the market will be in panic mode. If not, then the market may decide that we are overvalued here and that prices should be lower.

Prices may also be affected by currency fluctuations, ongoing assessments of the frost damage and the weather during the flowering in Brazil over the next few months.

Should Roasters put off purchasing coffee?

RD: It depends on the needs of the roaster. If the roaster is able, they should have a price risk management plan and follow it. I have some introductory videos on hedging on coffeetradingacademy.com and also a training course available.

Beyond that, the roaster should stay informed on what’s happening in the market. They can sign up for a free or low cost subscription on my website to get my views, and they should be in communication with their suppliers.

MJ: We’re in the middle of two cold fronts, so now isn’t the greatest time to make long-term plans. Most Roasters have never seen this kind of market volatility. However, Roasters have to purchase coffee — it’s what they do.

I advise roasters to examine their operations and think critically before making any rash decisions. Definitely don’t become desperate. You can always use GO and order what you need — in 65lb boxes — when you need it.

Is there going to be a correction, or are we in for further shocks?

MJ: I’m not sure if we’ll see a correction anytime soon, but the market will always find a way to return to equilibrium. We will probably witness massive volatility if the next frost has the same power.

RD: Yes, there will be many corrections, especially if the price continues to rally hard. One thing to note is that the market tends to accentuate position vulnerabilities. So if everyone gets very long, the market tends to correct lower. If everyone is very short, the market tends to rally.

How can roasters safeguard themselves from future jolts?

RD: Having a hedging plan and staying informed are key here. There is a Chinese proverb that the best time to plant a fruit tree is 10 years ago, the 2nd best time is now.

MJ: The key, in my opinion, is to understand your business. The more your flexibility, the more pivoting and adapting you can do to minimize the impact on your organization.

Can you, for example, blend several origins in order to reduce your reliance on a single coffee? Can you rotate your single origin menu so that clients always get excellent value?

Why is the price of coffee from different origins affected by the frost in Brazil and what impact will this have on farmers in Brazil and other countries?

RD: For those farmers in Brazil affected by the Frost, it is of course a disaster. Some may be forced to default on commitments and suffer economic damage. For those farmers not directly affected by frost, they will benefit from higher prices.

MJ: Farmers in Brazil will be hurt by this. Many producers sell ahead, ie, — they sold before the frost at a lower price and now have to fulfill those commitments when they don’t have as much coffee to sell.

Producers in other areas of the globe are experiencing record prices, but many will miss out on this immediate spike in prices since they don’t have coffee to sell today. A coffee producer in Guatemala or Honduras only has coffee to sell during the harvest, and prices must remain high until at least December 2021 for them to benefit from this market increase.

###

Copyright Genuine Origin

Find out more about our Brazilian coffee collection on our website — https://www.genuineorigin.com/brazil

Harvest in Brazil is on and we’ve received a comprehensive update from our sister co, Volcafe Brazil.

•• Fruit Maturation
The overall fruit maturation has been slow this season which stems back to late 2020. At that time, the blossom in October had a poor fixation due to adverse weather (limited follow up rains) followed by below average rains in March and April which reduced the cherry filling potential. Those two weather episodes resulted in a delayed harvest, in what is already considered an off-cycle crop. The lower than usual amount of cherries reduce the pressure on farmers and their facilities to quickly harvest and process the coffee.

•• Pandemic
Fortunately, the COVID-19 pandemic is, on the whole, not affecting the harvest activities in the countryside and people can move freely. Unfortunately, the sanitary rules are not always respected by harvest workers, as they face strong economic pressure. In their opinion, the sanitary rules would reduce their productivity / mobility and result in loss of income. However, when harvest workers show signs of flu symptoms, they generally stay off the working site and quarantine.

•• Quality
At this stage, with the harvest being delayed, it is a bit early to fully evaluate quality. What has been delivered to coops and warehouses so far tastes promising. And the bean size has been good — better than average.

•• Water
São Paulo and Minas Gerais have saw lighter rain in late May / early June. The potential negative impact on the new lots is still unknown, but we expect very minor quality issues if any. Light rain typically occur this time of the year, so this is not such an abnormal phenomenon.

The lack of water and below average rains since the start of the year however is becoming more problematic in many growing areas. Farmers now have to start thinking about building irrigation systems in the arabica growing regions. Current estimates suggest that only about 30% of total arabica growing regions have irrigation systems. Implementation will take time and will be a big change. Farmers from Cerrado and São Paulo seem more inclined to this new technology as in other regions. It’s also worth noting that irrigation systems are not an option for many farmers.

Many farmers accumulate a mulch layer on soil to retain more water, some try new techniques that boost the growth of the coffee tree roots…. In general, coffee farmers try to maintain good husbandry so that the trees would be better prepared to face adverse weather ahead.

• New variety
We are seeing a strong demand for the Arara variety, a great tasting cross between Catuai and Abata. The Arara is a yellow fruit coffee with high resistance to rust and good productivity. While its ripening cycle tends to be late, it is also more resilient to water-stress than the traditional Catuais and Novo.

###

Copyright Genuine Origin 2021 — Original story published by Volcafe Select

Find out more about our Brazilian coffee collection on our website — https://www.genuineorigin.com/brazil

On April 28, protests broke out in Colombia in response to the introduction of a new tax reform that critics said would disproportionately increase financial burdens for the country’s middle and working classes. Although President Iván Duque withdrew the tax bill four days later, the protests have escalated into a movement over larger issues surrounding inequality and police violence.

Genuine Origin is in close contact with suppliers and sourcing partners in Colombia for weekly updates on the current situation. In our most recent report earlier this week, Lohas Beans, one of our suppliers based in Bogotá, communicated a general return to normalcy, albeit tensions still running high.

Mass protests, roadblocks, and strikes have disrupted economic flow throughout the country, significantly impacting the protest epicenter in Cali and cutting off food and gasoline supplies to isolated areas like Nariño. Large rallies demanding health and educational reforms, police reform, and guaranteed basic income have been spattered with violence, with dozens of deaths ensuing from clashes with riot police.

“Constitutionally, roadblocks and barricades are prohibited, and the participation of organized crime, drug traffickers, and guerilla groups in the protests to destabilize the government has caused great harm and needs to be stopped…We have seen an increase in terrorist activities not only in major cities but in rural areas, including those where we work with our partner associations in the south of Tolima and north of Huila. We hope the security conditions will not deteriorate and threaten the coffee producers in these regions,” says Juan Pablo Campos, Founding Partner of Lohas Beans, in an update earlier this month.

As the rest of the world is cautiously reopening, it’s a different story in South America. Colombia alone is facing over 25,000 new cases and over 500 deaths from COVID-19 each day in a surging third wave. What’s different in this wave is the age range of patients — more young people are dying because it’s young people who attend the protests, according to The Guardian. Earlier this week, protest leaders agreed to pause mass marches in consideration of the overwhelmed hospitals. Despite the third wave of infections, Colombia has gone ahead to relax social distancing measures in an attempt to reactivate the economy.

The Impact on Colombia Coffee

In late May, the Federación Nacional de Cafeteros de Colombia (FNC) reported only 20% of the usual coffee volume made it to shipping ports, with an estimated backlog of 580,000 bags. Buenaventura, one of the most important gateways in the Pacific, faced a severe reduction in volume down to 10–15%. With reports of trucks en route being attacked by protestors or stopped at blockades, coffee exporters like Lohas Beans celebrate every successful arrival of coffee to their mill.

Now that most blockades have been cleared, port warehouses face another crisis in the sudden increase in traffic to fulfill delayed contracts. Shipping containers are still scarce, and warehouse capacity is limited. Lohas Beans estimates that Colombia will need another 4–6 weeks to catch up with the coffee shipment backlog.

From the perspective of a local private business like Lohas Beans, Colombia is facing one of the most critical situations in recent history, a sentiment echoed by healthcare experts who view the government’s response to the pandemic and the civil unrest as catastrophic. ICU occupancy is at 97%, and Colombia is struggling to cope as the country with the 10th most COVID-19 cases in the world.

“Colombia’s middle class doubled to 32% from 2002 to 2019. Since the COVID-19 pandemic began, we’ve lost 2.7 million Colombians that had grown into this middle class, back to a low-income class…It will take no less than five years of hard coordinated work between the government and the business community to regain track and return those 2.7 million Colombians back to a growth trend. This is the magnitude of the impact we will see from 15 months of COVID-19 and the recent protests,” says Campos.

Coffee prices are at a record high due to a combination of lower yields in Brazil and supply chain disruptions. Although areas of Colombia are experiencing high rainfall that complicates road logistics, there is no specific effect on coffee quality or volume so far in the smaller harvest season from June to July.

Lohas Beans’ Agroeco Mill in Santa Marta, where Genuine Origin sources coffee from the Coogracol co-op in Huila, is back at 75% of their normal flow, and everyone is working around the clock to secure shipping schedules. Genuine Origin will continue to monitor the coffee export and shipping updates closely with the help of our partners in Colombia.

As we await further news, check out Genuine Origin’s Colombia portfolio for coffee that has already arrived in our warehouses across the US.

###

Find out more about Genuine Origin on our website — https://www.genuineorigin.com/

Written by Tigger Chaturabul, copywriter for Curious Typhoon about all things coffee and beyond. Copyright Genuine Origin