2024 SCTA Recap by Jamie White

At the SCTA gathering in Basel, the coffee industry buzzed with the latest updates. Jamie White, Trader with Sucafina SA and SCTA Next Gen Council Member, gave us an update, including: 

• Discussions on the potential delay of the European Deforestation Regulation (EUDR), divided opinions on whether the time and money spent in preparation were worthwhile or could have been delayed. 
• Critical focus on Brazil's rainfall and its impact on coffee production. 
• Key topics included the challenge of maintaining coffee's appeal to younger consumers, potential price increases on supermarket shelves, and the overall negative sentiment toward consumption trends. 

This was definitely an interesting SCTA for everyone, as the news of a potential European Deforestation Regulation (EUDR) delay came right as most were arriving in Basel. The industry was also on edge waiting for news of rains in Brazil, and there was a weariness that has become somewhat commonplace due to the current price environment. If you attended SCTA last year, you might remember that a poll at one of the panel conversations showed a majority of respondents predicting a 120-170 range for 2024 – how far we’ve come!  

As expected  (even before the news from the European Commission), EUDR was a hot topic of conversation. Though for most a welcome announcement, news of a potential delay did seem to divide the attendees. While some see the preparation for EUDR up until now as a good investment of time and money towards an inevitable implementation,  others feel the resources could have been allocated more effectively for the time being. The potential delay is raising questions for both sides of the trade: Can suppliers make offers with EUDR optionality? Can premiums be returned? Should premiums be returned? Most of us remain in a holding pattern until we have more definitive news.  

In terms of consumption, the overall sentiment was negative. Coffee currently on the supermarket shelves have yet to see full price increases. We know consumers will have to pay more, but the question that remains up for debate is, how much more and what will that do to demand? In addition to becoming more expensive, coffee also faces the challenge of remaining attractive to younger generations, who seem to prefer energy drinks more and more. This is, however, largely informed by the European perspective. On a more promising note, demand is still expected to be increasing in Asian destinations, which have arrived to the coffee shops a bit later than the rest of the world.  

For production, a too-hot Brazil is still the primary concern, but discussion around the timing and quantity of rains remained hopeful. It is still too early to assess the true extent of crop damage as a result of the recent dryness in the country.  

Adding to the challenges of regulation, market price, and softening demand is the pervasive executional issues that have plagued the industry over the last year. Roasters are seeing delays in the pipeline of up to one month or even more. In addition to exasperating the hand-to-mouth environment we currently exist in, these delays skew supply and demand data. Coffee held at destination or remaining afloat for longer than average periods have created two extremes - too much or too little coffee at any given time. Sentiments around these challenges were not particularly positive or hopeful, with many expecting container shortages and increased transit times to remain the reality for the foreseeable future.  

For Sucafina, this year’s SCTA was another great chance to gather with our team and our industry partners. We were happy to host a successful party and to sponsor the 2nd annual SCTA Next Gen Sustainability Contest. And we saw more than a few people walking around with a Sucafina tote bag – if you didn’t get one this year, make sure to visit us next time! We’ll be happy to see you!  
  

Jamie is a New Jersey expat currently located in Geneva. She has been with Sucafina since 2021 and works on the green coffee desk with clients primarily from Central and Northern Europe. She holds a master’s degree in commodity trading from the University of Geneva, and is currently an SCTA Next Gen Council Member.