Coffee cargoes are flooding Europe as traders rush to stock up on beans ahead of new environmental rules that are to be implemented at the end of the year.
The EU’s Deforestation Regulation (EUDR) require importers into the bloc to prove that commodities such as coffee, beef, cocoa and timber do not contribute to destroying forest land.
Coffee is especially vulnerable to the challenges of ensuring every bean is in compliance, so traders have raced to ship as much as they can to Europe before Dec. 30.
Photo: Bloomberg
Exports from Brazil to the bloc surged about 65 percent in the seven months to last month compared with last year, while Ugandan exports saw an all-time high last month, with the bulk headed to the continent.
“This crop is effectively the last crop we can export before EUDR comes in,” Ugandan coffee trader Ted Marley said. “The next robusta crop is in October, and given the 70-day vessel time past South Africa and the processing time, almost all coffee from the next crop will have to be EUDR compliant.”
Roasters want to cover any possible deficits for the first quarter of next year, Riccoffee managing dirctor Ricardo dos Santos said.
Few traders are willing to risk shipping beans after October and miss the window for transporting uncertified beans, dos Santos said.
This comes as traders are faced with higher prices. Robusta beans, used for instant coffee, have soared to the highest since the 1970s. Higher-quality arabica beans have surged more than 30 percent this year. Increased cost of borrowing, container shortages and longer transit periods are also adding to the challenges.
Even as traders try to ship as much as they can, the path ahead continues to be uncertain as the European Commission has not published all the implementation details, said Holger Preibisch, a chief executive for a German coffee association.
Some producing nations are also more unprepared than others.
“Uganda is really lagging behind as far as EUDR compliance is concerned,” Wakanda Coffee Brokerage Services coffee broker Joab Kankiriho said. “A great number of exporters did not have sustainability programs in place until the EUDR” became a reality.
Some EU countries and industry groups have called for the rules to be revised. For now, shipments are expected to taper off, because no one wants to be saddled with a delayed cargo that does not meet the regulatory requirements.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
RSS