Core Insights - Ethiopia has seen a significant increase in coffee exports to China, becoming the fourth largest importer of Ethiopian coffee, up from seventh place two years ago [1] - In the first quarter of the current Ethiopian fiscal year, approximately 9,470 tons of coffee were exported to China, generating a trade value of $65.49 million, which is about seven times the export value from the same period last year [1] - The rise in exports is attributed to Ethiopia's proactive market expansion strategies and the growing demand for high-quality organic coffee among Chinese consumers, particularly the youth [1] Export Data - Major destinations for Ethiopian coffee exports in the past three months include Germany, Saudi Arabia, and Belgium, with China, the USA, South Korea, UAE, Japan, Italy, and Russia following closely [2] - For the 2024/2025 fiscal year, Ethiopia is projected to export approximately 469,000 tons of coffee, an increase of 170,000 tons from the previous fiscal year, with a record export value of $2.65 billion [2]

Core Insights - Coffee prices have experienced significant volatility this week due to concerns over tightening supply from Brazil, tariff policies, and profit-taking behavior, with New York coffee futures volatility reaching a four-year high [1] - Arabica coffee, the preferred variety for chains like Starbucks, saw prices approach historical highs due to drought conditions in Brazil and U.S. tariffs on Brazilian coffee, potentially increasing costs for roasters and consumers [1] - Following a peak, algorithmic traders began to take profits, and with exchanges raising maintenance costs, coffee prices subsequently fell, with Arabica coffee experiencing its largest single-day drop since 2008 at 9.1% [1] Price Movements - The 60-day historical volatility indicator for coffee prices has risen to its highest level since October 2021 due to the recent trading fluctuations [1] - On Thursday, coffee prices briefly increased by 1.5%, reaching $3.8135 per pound, before the gains narrowed [1] Market Analysis - Gnanasekar Thiagarajan from Commtrendz Research noted that coffee prices were pressured downwards by profit-taking, while expectations of rain in Brazil's main coffee-growing regions provided some support [2] - Thiagarajan indicated that after the price peak, a technical correction could see prices dip to the $3.45 to $3.25 per pound range, although some bottom-fishing buying has emerged [2] - Harry Howard from Sucden Financial Ltd. suggested that coffee prices may continue to fluctuate, with support around $3.50 per pound and resistance near $4.00 per pound [2] Weather Impact - Traders are closely monitoring weather conditions affecting Brazilian coffee crops, with forecasts predicting intermittent rain in key coffee-producing states, although some areas may remain dry [2]

Core Viewpoint - Brazil's Vice President stated that the country will need to seek alternative coffee markets or collaborate with the United States to address tariff issues [1] Group 1 - Brazil is facing challenges in its coffee market due to tariff issues [1] - The government is considering partnerships with the United States as a potential solution [1] - There is an emphasis on the need to explore other coffee markets to mitigate the impact of tariffs [1]

Core Insights - Coffee is the second largest beverage globally, with an average daily consumption of approximately 2.25 billion cups, playing a significant role in the world economy [1] Group 1: Origin and Historical Context - The origin of coffee traces back to ancient Ethiopia, where a shepherd named Kaldi discovered the energizing effects of a plant with red fruits [2] - Coffee spread to the Arab world in the 6th century, where it was cultivated and named "qahwa," meaning "Arabian wine" [2] - A theft of coffee seeds in the late 17th century led to the establishment of coffee plantations in the Netherlands, marking the beginning of global coffee trade [3] Group 2: Brazil's Dominance in Coffee Production - Brazil is the largest coffee producer and exporter, expected to produce 58.81 million bags (each bag weighing 60 kg) in the 2024-2025 season, accounting for 33.3% of global production [4] - The introduction of coffee to Brazil in the early 18th century led to its rapid expansion, with the first Brazilian coffee entering the European market in 1818 [4][5] - Brazil's favorable climate and government support have significantly contributed to its coffee industry's growth, making it a key player in the global market [5] Group 3: Economic Challenges and Coffee Crisis - The coffee industry in Brazil has faced crises due to price volatility influenced by international factors, leading to significant economic challenges [6] - The "coffee crisis" in the late 19th and early 20th centuries saw Brazil's overproduction lead to a market collapse, prompting government intervention to stabilize prices [7] - The outbreak of World War I and the rise of coffee production in Central America further exacerbated Brazil's coffee market struggles, resulting in a decline in its market share in the U.S. [8]