Coffee News, Heavy and Light

© 2006 Stuart Daw

Throughout the Brazilian frost season, one is emotionally prepared to handle a two day weekend, which is a bit too short for coffee people there to manufacture grounds (pardon the expression) for coffee prices to rise. 

But for some reason three day weekends are different. That extra day provides lots of time to upset the coffee world while non-Brazilians slept or enjoyed their holidays. Of course that refers to the two three day weekends in Canada and the US when the Exchange is closed in the midst of the Brazilian harvest, early July and early September. 

 It seems uncanny that, over the many years I have been in this business, strange things have happened after going to bed peacefully on a Friday night, only to arrive at the office on Tuesday morning after a long weekend to find the coffee world in a panic. The telephone is ringing with brokers on the line warning me that “the train is leaving the station.” That was the old days of course when we all took trains and panicked at the thought of being left behind. Today it might be, “the departure gate is closed.” Either way, the message is that we had better commit immediately to some heavy buying or be left behind by clever bargain seekers less cautious that we seem to be.  

So here we are just after this Labour Day 2006 at what would normally be the end of the frost season in Brazil. But as so often has happened over the years, we arrive at our office only to hear, after “tiptoeing past the graveyard” for most of the normal Brazilian winter, which has been warm this year, that a sneaky cold front slipped in from Argentina and actually brought a mild frost in Parana in the deep south of Brazil, and the market has jumped over three cents (after a total six cent rise in the month of August). Luckily Parana is not the big growing area it used to be before the coffee culture of Brazil migrated further north, specifically due to the risk of frost. Now coffee is more heavily centered in Minas Gerais to the north.  

Such is the nervous period through which it is unwise to turn one’s back, for if it isn’t a frost, it’s the potential for drought. If there is insufficient precipitation by September 15, the prospects for next year’s crop become gloomier, and the train starts pulling away from the station again. But in fact the risk of frost is now light, and readings on rainfall are fairly optimistic, so one can hope for reasonable long-range stability in prices. And in fact in this same week cooler heads prevailed, and by Thursday the market had taken back Monday’s gain. 

One large element that has affected price trends this year is the rare problem of the robusta market becoming inverted because of the situation created by a shortfall in Viet Nam production. Inverted refers to a condition where the out months are being quoted far lower than the spot months because there is insufficient coffee available to meet immediate delivery requirements. Not only that, but the squeeze has driven robusta prices to the point of closing in on arabicas, causing a dilemma for the large national brand retailers. After all, how can they cheapen their blends when the most important tool, robustas, are priced inordinately high? 

And speaking of national brands, Coca Cola is opening its “Far Coast Concept Store” on Bloor St. in Toronto September 22, to gauge customer reaction to its new line of espressos, Chai teas, cappuccinos, and lattes that will be offered to foodservice outlets. Included will be a new coffee and tea label “Chaqua,” a name combining the Mandarin name for tea, “cha,” and the Arabic name for coffee, “qawah,” being offered to convenience stores. 

In spite of the pitfalls in green coffee buying, there is some interesting good news surfacing. A company called Smart Lid Systems has won the prestigious DuPont Packaging Award with its disposable coffee lid, which changes from dark brown to bright red when placed on a hot beverage and back to brown as the drink cools. Costing roughly a penny per lid more, it also signals when the lid is not securely on the cup. That should eliminate frivolous lawsuits over hot coffee spills, unless of course some bright lawyer realizes that one element in society has been disenfranchised; those like me who are red/green colourblind.  

But the really good news is that, according to an Austrian study, “coffee, consumed at the rate of three cups per day, could slow down the loss of mental function in men.” This report, presented at the Radiological Society of North America, is said to be the first to demonstrate a visible impact on the brain from caffeine.  

Without becoming too technical about this, the testing was also conducted in Finland, the Netherlands, and Italy on 676 healthy men born prior to 1920, for a period of ten years. While cognitive function declines naturally with age, the results of this study showed that men who had regular consumption of coffee suffered a lower rate of decline than men who did not.  

I have made this reference before, but I have always noticed that every man I ever knew in the coffee business lived to be old. And please don’t make the usual rejoinder: “maybe they just looked that way from drinking so much of it.”