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.
Ryanair, Transavia, Volotea and other low-cost airlines are feeling the financial pain from high jet fuel prices as a result of the Middle East war and are cutting flights. The closure of the Strait of Hormuz has taken a huge chunk of oil supplies off the market, sending the price of jet fuel soaring and triggering fears of shortages that could force airlines to cancel flights. Airlines are not waiting for a lack of supplies to react. “Travel alert: Airlines are cutting thousands of flights right now,” Travel Therapy host Karen Schaler said in an Instagram reel this past weekend.
MANAGING RISKS: Taiwan has secured LNG sufficient to cover 95 percent of electricity demand for next month, UBS said, describing the government’s approach as proactive UBS Group AG has raised its forecast for Taiwan’s economic growth this year to 8 percent, up from 6.9 percent previously, and said expansion could reach as high as 8.6 percent if external energy shocks are avoided. The upgrade reflects a stronger-than-expected first-quarter performance and sustained momentum in artificial intelligence (AI)-driven exports, which UBS said are providing a firm foundation for growth despite geopolitical and energy risks. Taiwan’s GDP expanded 13.69 percent year-on-year in the first quarter, the fastest growth since the second quarter of 1987, the Directorate-General of Budget, Accounting and Statistics (DGBAS) reported on Thursday. On a seasonally
The Fair Trade Commission’s (FTC) ongoing review of Grab Holdings Ltd’s US$600 million acquisition of Foodpanda Taiwan’s operations, announced on March 23, has taken on fresh urgency as industry experts warn that the transaction could embed significant Chinese cybersecurity vulnerabilities into Taiwan’s digital infrastructure through Grab’s deep ties to autonomous-driving firm WeRide (文遠知行). Less than 16 months after the FTC blocked Uber Eats’ direct attempt to acquire Foodpanda Taiwan — citing potential combined market shares of 80 to 90 percent — the emergence of Grab as the buyer has prompted questions about whether the same competitive harm is simply being rerouted
The list of Asian stocks that benefit from business partnership with Nvidia Corp is getting longer, as the region further integrates into the artificial intelligence (AI) chip giant’s business ecosystem. Just in the past week, South Korea’s LG Electronics Inc, Taiwan’s Nanya Technology Corp (南亞科技), as well as China’s Huizhou Desay SV Automotive Co (德賽西威) and Pateo Connect Technology Shanghai Corp (博泰車聯) have become the latest to rally on news of tie-ups, supply-chain participation or product collaboration with the US chip designer. Asian suppliers account for about 90 percent of Nvidia’s production costs, up from about 65 percent last year, data compiled
RSS