Ken Gabbay Coffee Ltd.

CoffeeNetwork (New York) Allegra World Coffee Portal has released their newest report, Project Iced USA 2020, which reveals iced beverages generated $10.4bn sales at US branded coffee shops during the last 12 months, achieving exceptional 7.3% growth Iced beverage sales comprise more than one fifth of $47.5bn US branded coffee shop revenues and now outpace hot coffee sales growth, which increased 4.6% during the period 91% of industry leaders surveyed believe the iced beverages sales environment in the US is positive. 92% report improved iced beverage sales over the past year.

CoffeeNetwork (New York) - Arabica prices on the InterContinental Exchange are trading higher by 3.15 based on the December contract, last seen at 99.60. Volume is heavy with 28,282 contracts for the December contract at the time of writing. Arabica futures are surging higher today, in a technical correction off of yesterday’s sharp losses. The rally is also attributed to stronger Latin American currencies. Brazil’s Real is hovering near two month highs and the Colombian Peso... also firmed ahead of the Sunday’s elections. General elections for Argentina will also be held over the weekend. In terms of fundamentals, focus still remains on the developing 2020-2021 crop in Brazil. Rainfall levels remain well below average in October but regular rainfall is expected to return next month, which should ensure proper setting of the flowers and aid in the development of the crop. The market is also digesting new estimates for the global balance sheet for the 2019-2020 crop, including Marex Spectron who forecasts a 4.7 million bag deficit and ECOM who estimates a 1.9 million bag deficit (see separate CoffeeNetwork reports). See more

CoffeeNetwork (New York) - Arabica coffee prices dropped sharply in the first two weeks of October, in both the Brazilian and the international markets, due to high supply expectations, after large flowerings in relevant coffee-producing regions in Brazil. Between September 30 and October 15, the CEPEA/ESALQ Index for arabica coffee type 6 (delivered in São Paulo) dropped 23.55 Reais per 60-kilo bag (or 5.3%), closing at 414.94 BRL (99.79 USD) per bag on October 15. According... to agents consulted by Cepea, flowers have already been spotted in almost all the regions surveyed, except for Garça (SP), where rains in the last week of September were not enough to induce a new flowering. Precipitation in the last days which should favor flower settlement pushed down prices too. However, it is worth to mention that rainfall was enough only in the Cerrado Mineiro, Mogiana (SP) and in some areas from southern Minas Gerais.

Coffee Network (Bogota)- Brazil could produce 55 million bags of 60-kg in the coffee year September 2019- August 2020 under a normal scenario but the harvest could fall further to around 50 million bags under worst case scenario, Donizetti Alves, professor at the Biology department at the Federal University of Lavbra, said today. Brazil must need to be caution when it predicts a super large coffee harvest in 2020 even though it will enter positive biennially of the harvest, A...lves told an audience attending the Café de Colombia fair. He predicts a harvest of 55 million bags of 60-kg in the coffee year 2019-2020 even though coffee growers are predicting 59 million 60-kg bags for 2020, while coffee buyers are pegging production at 62 million bags. The reason to be caution is because rainfall in August- September were below normal resulting in the loss of leaves in some coffee farms. Weather forecast for October November and December will have normal levels of rainfall. If Brazil experiences something really disastrous in weather, total coffee output including Arabica and Robusta could fall to around 50 million bags, Alves told Coffee Network.

ICO Draws Recommendations At Production, Market To Ensure Sustainability Of Coffee Sector Coffee Network (Bogota)- The International Coffee Organization said current low coffee price levels are mainly the result of overproduction, resulting in a severe crisis for the majority of coffee-producing nations prompting ICO and consultants to draw a series of recommendations at production, market, and sector governance levels to ensure the sustainability of the sector. With such low... coffee prices, the sustainability of the coffee sector is at risk. Coffee growers worldwide are struggling to cover their operating costs as input, compliance and transaction costs continue to rise. Consequently, farm incomes decline and the livelihoods of coffee-producing households, the majority of which are led by smallholders in low- and middle-income countries, are increasingly at risk, ICO noted. RECOMMENDATIONS Actions at the production level include mechanisms that can enhance farm performance (productivity, quality and resilience), promote income diversification, improve access to insurance against agricultural and price risks, encourage aggregation of growers and create added value. Measures that increase the profitability of coffee farming can have important positive, short-term effects for producers. In the long term however, these measures can create an imbalance in supply and demand. Therefore, production measures must take into account sector-level supply management strategies. In addition, greater investment in research and development (such as varieties) is needed to enhance the economic sustainability of coffee farming. The adoption of information and communication technology (ICT) innovations also has the potential to achieve transformative outcomes in farm management and efficiency and in organizing sourcing, traceability and payments. ICO also recommends price-setting mechanisms, which can be decoupled from international market prices and be defined against different benchmarks, such as the costs of sustainable production (cost-plus model) or upon income benchmarks, such as the poverty line and a living income. Prices paid to growers can also be based on considerations of fairness in line with expectations of educated consumers (e.g. ethical consumerism). Governments and governing bodies at the national, regional and international level can make use of a wide range of measures, including purchase guarantee mechanisms, price setting, stabilization funds, supply management and demand promotion.