Hi friends,
We want to give you an update on how our supply chains are looking and make sure you feel safe and looped in as things develop. We’re seeing a lot of speculation and fear out there, but our supply chains are unique and we want you to feel confident about buying coffee from Red Fox. Below is a rundown of our current shipment, harvest, and spot positions. If you have any questions or want to have a conversation about forecasting or managing your position over this volatile period, we are here to help.
To preface, we don’t want to give you a superficial update: we want to share everything we know and make sure that you feel empowered to make decisions and communicate openly with us as we will continue to do with you. Once again, we are always, always here—please get in touch, even if you just want to check in.
Supply, Demand, & The ‘C’ Market
Red Fox has always been able to operate outside of the scope of the C market, which is an antiquated measure of a coffee’s real value. Anything short of a massive rally would allow us to maintain continuity in our approach.
That said, we need to be prepared for every possible outcome. We’ve seen a steady climb in the ‘C’ over the past month+ settling in just over $1.20 as trading against May comes to a close next week. The current global economic climate doesn’t necessarily lend itself to confidence on either side of the coin. The slowdown could grind demand to a halt and bring the market back down below $1. Any potential port closures, or container shortages which are a larger concern at the moment, could cause the market to rally and potentially to levels we haven’t seen in over a decade due to an eventual lack of supply.
The indication we’ve received from our partners in Peru, Colombia and Rwanda is positive so far; the origins with their harvests on deck. They will be able to pick and process coffee business-as-usual as of now. Will Brasil be able to do the same? Will the medium to large producers in Colombia? Labor is very much an issue for the imminent harvests. We’ll keep you all apprised of the situation in the months to come.
Mexico
Update from origin:
The Mexican government considers coffee to be a priority product, so dry mills are allowed to continue operations during the shutdown. Both of the dry mills we work with are taking all of the necessary precautions to stay safe. One of the mills we work with is operating with fewer workers. Shipping lines are accepting bookings and we expect to have the first containers afloat by the end of April and available in the US the second or third week of May.
However, we are now getting word that several indigenous communities outside of the Oaxaca City capital, particularly in the Mixteca region, are proactively closing roads in order to prevent the spread of the virus and requiring anyone to apply for a special permission ahead of time to be on the road. This will affect a small percentage of coffee that is still stored in producers’ houses and hasn’t been brought down to the central warehouses and dry mills. We hope to see that opened up by the end of the month to be able to mill and ship the 50-75 bags we had planned to purchase from these communities that weren’t delivered yet.
Available lots:
We have a couple lots from the 2019 harvest in inventory for anyone that is looking for either a conventional or fully certified blend component. These lots are holding up well and priced to move.
Ethiopia
Update from origin:
Prime Minister Abiy Ahmed has been cautious with his mandates. As 80+% of the population relies on agriculture, and daily wages from it, a complete shutdown remains an impossibility. Roads to the countryside are closed to all other than trucks related directly to business. Government offices and public transport are closed officially. Large gatherings are forbidden. Addis Ababa itself is essentially locked down.
ECX remains open as of last week and has implemented a rotating system of buyers to maintain safe distances between people. This, coupled with the new minimum price floors instituted a couple of months ago, is causing purchases delays and the general movement of coffee between warehouses.
Dry mills are operating at a slow clip. Shipments to Djibouti are also moving at a slower clip due to the port’s pace.
Our dry mill and export partners are maintaining the safest, cleanest environments they at the moment, hence the slow down within.
Available lots:
We have multiple containers of top Agaro coffees at both The Annex CA and Continental Terminals NJ SPOT now. Our final Guji, Yirgacheffe, and Sidamo shipments are somewhere between just afloat, Djibouti, and the PSS approval stage. Expect arrivals from early May through June.
Kenya
Update from origin:
A nationwide mandated curfew is in effect from 7pm to 5am daily. The Kenyan government has effectively stopped all movement in and out of Nairobi with the exception of cargo. Coffee is still moving to Port of Mombasa which maintains a normal schedule with shipping lines. Food grade containers continue to be scarce but still obtainable.
Available lots:
Our Kenyan shipments have gone afloat as of two weeks ago and are due into port early May. Our unallocated offerings will be limited. For all those that committed to forward contracts, we have you covered and samples will be available in the next couple weeks. These lots are stunning and we’re thankful to all those who committed and made it possible for us to make a return to Kenya. Anyone who is interested, get in touch ASAP.
Guatemala
Update from origin:
Guatemala continues to be in lockdown with no civilian travel allowed between departments and curfew extended to April 20th. There are heavy fines for anyone caught without a mask. All international and domestic flights are suspended until April 30th.
What this means is that there is a real migrant labor shortage. Certain regions like Huehuetenango, which was at peak harvest when COVID hit, are seeing as much as 20-30+% of the crop rotting on the trees for lack of pickers. Mills are running at much smaller capacity due to labor shortages as well. Though coffee is deemed an essential product and therefore allowed transit, individual communities are putting up roadblocks and not allowing any traffic through. This has slowed everything down.
Back in Guatemala City, the dry mills are operating at near normal capacity. Although there have been some minor lags with having enough shipping containers available, the coffees are mostly moving quickly once they’re milled.
All that said, despite some pretty big obstacles this harvest, we expect to see Guatemala arriving in late May.
Available lots:
If you haven’t already, now’s the time to forward book.
Colombia
Update from origin:
The Colombian government has extended their strict stay-at-home mandate through April 27th as of the end of March. Coffee production, milling and exporting have been deemed essential business and exempted from the order.
Our milling and export partners are working at a reduced 50% capacity due to curfews forcing them to go home earlier in the evening than normal.
Transportation complications are reaching critical mass as availability decreases despite increased rates. Conditions are deteriorating for drivers as there are no longer stops to eat and to rest.
Ports are generally open for business as usual though some have limited hours for loading and unloading to morning time.
A lack of pickers will have significant impact on the medium to large farms.
Click here to read specific updates from groups we work with.
Available lots:
We have a diverse array of Colombia spot coffee in Continental, the Annex, and DuPuy Houston from some of our longest-standing relationships in Inza and Narino. Lots range from Producer IDs perfect for single origin menu spots to nuanced yet approachable blend-ready lots that go through the same rigorous QC process. They’re at their peak now and will hold their own for months to come—they’re a great option no matter where you’re located or what menu spots you need to fill.
Peru
Update from origin:
The Peruvian government declared a National Emergency beginning March 15th, 2020 with measures including a nationwide quarantine and the closure of regional and international borders. These measures are currently scheduled to continue through April 26th, though the ports and shipping lines are not affected and have been operating continuously. Initially, the only agricultural activities permitted were those related to the provision of food, but, as of April 3rd, the government exempted all agricultural activities—including the the harvest, transport, collection and processing of coffee—from quarantine restrictions, so long as each individual obtains a certificate from their local/community authorities accrediting that they in fact work in agriculture.
In practice most everyone in the coffee sector, including producers, day laborers, those working for cooperatives and associations, local warehouses, and dry mill operators, has been abiding by the quarantine restrictions, even though they are exempt. In some cases this is because of their own interest in preventing the spread of the virus. Another factor is the “rondas campesinas,” local peasant patrol groups that began in the late 1970s in northern Peru to protect rural communities against theft and that continue to operate autonomously in many communities across the country. The rondas (in the areas where they operate), and other rural self defense committees across Peru with similar enforcement rights, are closing local roads and prohibiting non-residents from entering to keep the virus from spreading to their communities—most of which do not have access to medical services.
What does this mean for the Red Fox Supply Chain?
While the harvest season has begun on lower altitude farms in the north of Peru and the Selva Central, the producers we purchase coffee from are still at least a month away from the harvest. 60% of Red Fox suppliers are in Southern Peru, where the harvest begins in June at the lower altitudes, and goes through October on the highest altitude farms. Even in the North, where the harvest came early this year, the majority of the farms we are sourcing from are located at over 1600 meters above sea level and the harvest is not expected to begin until the second half of May.
There is some concern in Peru about labor for this harvest season. Many producers rely on migrant workers to help with the harvest, and most people suspect that the regional borders will be closed well past the end of the quarantine period. We do not expect our suppliers to be particularly affected by this. Red Fox does purchase coffee from some producers who hire migrant workers, but the vast majority are smallholders whose farms are family operated. In the South of Peru, the concept of “Ayni” is common. This Andean work system practiced by Quechua and Aymara cultures is founded on the principle of reciprocity, and community members take turns helping each other to harvest and perform other farming activities rather than hiring outside help.
March and April are usually the months when our suppliers renew their Fair Trade and Organic certifications, and all of the certifiers have suspended their audits for recertification. The producer organizations we work with have been in communication with their respective certifiers to reschedule their inspections and/or renew their certifications virtually, and anticipate they will have their certifications in place by the time we begin shipping coffee in September.
We are in regular communication with all of our core suppliers in Peru, and they share the same concerns and feelings of uncertainty that many of us do. They worry about demand, prices, financing, and contracts. We are reiterating our commitment to work together, to purchase as much coffee as we can this coming season, and to continue to pay the highest prices possible for their coffees.
While our operations in Peru have not very been affected by this pandemic thus far, our sourcing team and our suppliers will no doubt need to be agile and creative as we navigate this coming season.
Click here to read specific updates from groups we work with.
Available lots:
We only have a handful of lots left in NJ, but these are some of the nicest Producer ID lots we saw all harvest, many of which are from the Valle Inca group in Calca. We have some stunning lots available left in the Annex and are offering a flat palletized rate country-wide out of that warehouse to support widening your selection process. We have lots available from Cajamarca to Puno and all our major producing partner groups: Coopbam, Santuario, Valle Inca, Aromas del Valle, Pangoa, Cecovasa, Huadquina, and more. Please get in touch if you would like support in narrowing our selection and making recommendations.
Rwanda
Update from origin:
The government in Rwanda instituted a nationwide lockdown on March 21st, one of the earliest in East Africa. International borders are closed, except to goods and cargo, and internal travel is not permitted. Only essential shops and markets are allowed to operate. Coffee is considered an essential commodity, and washing stations and dry mills are operational with strict social distancing and sanitation measures in place. The peak of the harvest is approaching and cherry picking continues, albeit at a slower pace. Farmers have delivered less than 15% of their cherry to date meaning May will be the peak of harvest. We hope to see the first samples from Kanzu in early June.
Available lots:
With only a bag or two uncommitted, reach out to your rep if you have interest. We may be able to work some magic, especially if you’re open to pulling from the Annex.
Ecuador
Update from origin:
The Ecuadorian government has put in place a strict nationwide quarantine. There is no financial help at this time, except for small loans. Agricultural production has been deemed essential businesses, but cargo loads have limited movement around the country. The borders have been closed, with only the exception being cargo trucks.
This year’s harvest hasn’t begun yet, although it is expected to begin a little earlier this year. Harvest in the Pichincha area is estimated to start in May and peak in early July, about three weeks earlier than last year. It is difficult to predict the available labor once harvest begins, but with so many left unemployed from the crisis, local leader Arnaud Causse believes there won’t be a shortage of labor. He is reporting that farms are looking good and that projects on the land are continuing as planned.
Available lots:
We have just a few lots and a few bags left to offer from this season’s harvest but still have some nice offerings from core producers Hernan Zuniga, Arnaud Causse, and Gilda Carrascal.
| Interested in sourcing coffee with us? Reach out at info@redfoxcoffeemerchants.com. To learn more about our work, check out our journal and follow us on Instagram @redfoxcoffeemerchants, Twitter @redfoxcoffee, Spotify, and YouTube. |