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.
Restaurant chain Din Tai Fung (鼎泰豐) today announced it is to close 14 stores in northern China, completely exiting the market by the end of October. Beijing Hengtaifeng Catering Co (北京恆泰豐餐飲), which operates Din Tai Fung restaurants in northern China, said its 20-year operating license expires this year. As the board was unable to reach a consensus on continuing operations, its 14 restaurants in the region are to close by Oct. 31, it said. The company apologized for the inconvenience and disappointment the news would cause among its customers, and said it would provide compensation for its workers. “We continue to be optimistic about
EXPANDING: The European Commission has contributed 5 billion euros in state aid to TSMC’s 12-inch wafer fab in Dresden, Germany, which broke ground on Tuesday Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) on Saturday said that it has received a total of NT$62.5 billion (US$1.95 billion) in subsidies from China and Japan since 2022. In the first half of this year, TSMC received NT$7.96 billion in subsidies from China and Japan after receiving about NT$47.55 billion last year and obtaining NT$7.05 billion in 2022, financial data compiled by the world’s largest contract chipmaker showed. The company, which makes about 90 percent of the world’s high-end semiconductors, said the subsidies were used to finance its investments in Kumamoto, Japan, and Nanjing, China. TSMC owns a 12-inch wafer fab in
STRATEGIC SHIFT: Diversifying away from the volatile flat-panel industry, AUO aims to boost sales contribution from non-panel business to half of total revenue by 2027 AUO Corp (友達) yesterday said it has agreed to sell its idled manufacturing facility and land in Tainan to Micron Technology Inc for NT$7.4 billion (US$231.8 million) as the company shifts strategy to reduce the impact from the boom-and-bust flat-panel display industry. The company expects to book NT$4.17 billion in disposal gains from the sale, it said in a Taiwan Stock Exchange filing. The Tainan factory produced color filters used in monitors, notebook computers and flat-panel TVs before being shut down last year, as AUO sought to optimize its asset utilization. The company has been striving to diversify and broaden its business
Micron Technology Inc has reportedly set its sights on two facilities owned by flat-panel maker AUO Corp (友達) after Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) recently clinched a deal to buy a facility and equipment from Innolux Corp (群創), another major flat-panel maker. Micron, the world’s third-largest memorychip maker, is expected to purchase two AUO plants in Tainan to expand its advanced chip packaging and testing services and high-bandwidth memory production, local media reports said. The two plants were shut down in August last year and AUO is seeking to dispose of the facilities, the reports said. They are expected to cost Micron