- GCA began publishing coffee warehouse stocks data in 1988
- Data collection was a significant undertaking, and the process was reportedly flawed
- The termination of these reports in May has driven conversation about the value of stocks data despite its imperfections
IN MAY, a crucial data point used to gauge the health of the coffee industry was lost.
Starting in 1988, the Green Coffee Association (GCA) began releasing monthly public stock reports, with some of the world’s largest green coffee trading companies included in the data. Each report showed total stocks and “certified” stocks at major US ports and warehouses.
Without public warning, GCA stopped publishing its green coffee stockpile data reports several months ago. This move has created a significant information gap for analysts, roasters, traders and other coffee professionals who need to judge supply and demand dynamics in the coffee sector.
Price is about speculation. By not having access to stock data, the market doesn’t know how much coffee sits in warehouses, and therefore doesn’t understand the reserve levels of green coffee around the world. This is a supply-side issue that could potentially lead to greater price volatility.
“Why won’t GCA issue a statement? Why is there so much secrecy around it? I feel like they should hold themselves more accountable to the rest of the coffee world,” says Neil Rosser, a researcher with over 30 years’ experience in the coffee sector.
Neil says the decision could be a reaction to claims that certified stock data was being corrupted. Alternatively, he suggests the decision might be because certain ports are linked with specific roasters, such as Seattle and Starbucks. This may have made some roasters uncomfortable with others (i.e. competitors) able to see a comprehensive overview of their stock levels.
As such, this move could be symptomatic of a paradox in today’s society: as our power to access information increases, our willingness to share it decreases.
No matter the reasons, key stakeholders in the coffee industry had come to rely on GCA’s stock data. Taking it away suddenly has been a blow for many of them.
Collecting the data is difficult
Calculating coffee warehouse stock data is an immense challenge. This is largely because of significant data gaps and issues with transparency, credibility, and accuracy. Collation is also a significant undertaking, especially when many warehouses are reportedly unresponsive when asked to share their data.
“Making these reports takes a lot of time, effort, and money,” says Albert Scalla, senior vice president of trading at StoneX. “GCA are expected to make the report, but don’t get paid. Meanwhile, they must call US warehouses, compile the data and write the report. The abrupt decision sparked many conspiracy theories, but I think the reason is simply this one.”
As such, green coffee stock data may not have been reliable for a long time. Does this make it a futile exercise, and one we shouldn’t fight to get back?
“I don’t think it’s a waste of time and resources,” says Neil. “You never get the full picture, but it was a helpful piece of information that we’re now missing. It was a piece of a puzzle, and no one else is in a position to do that work, so it’s gone.”
The GCA was one of the few organisations sharing nationwide stock reports. The European Coffee Federation also issues a report every two months, breaking down stocks by coffee type (robusta, natural arabica, and washed arabica). According to Neil, it has recently been suspended, but may resume at a later date.
Similarly, reports from the USDA’s Foreign Agriculture Service (FAS) and export warehouse reports from organisations like the Colombian Coffee Growers Federation (FNC) help value chain players analyse and speculate on supply and demand.
The International Coffee Organization (ICO) is another body which provides industry data. However, there are issues with the relevance of the figures they share.
“By mandate, the ICO can only publish numbers member countries provide to them, which are often unreliable,” says Albert. “This is a problem.”
Conversely, Neil believes that while ICO numbers may not be perfect, they still provide a starting point – which is better than nothing.
“Given their low funding and the way their budget has been cut, they do some solid work,” he says. “We can’t undermine one of the few reliable sources of regular information about coffee – on the contrary, we should support them to improve.”
Ultimately, the consensus on the value and relevance of stocks data remains blurry. The information is fragmented, which means there are doubts about how useful it is to calculate supply levels. Nevertheless, these challenges, along with the negative response the data often receives, could have contributed to the GCA’s cessation of its reporting.
Information sharing should be a two-way street
While coffee-consuming countries are becoming more protective of their data, coffee-growing countries are being pushed to provide increasingly precise information about the coffee they grow – especially in light of new sustainability legislation.
Some argue that this is a double standard as regards transparency, and perpetuates a power imbalance in the industry. The data collection and processing associated with these new laws is expensive for coffee-producing countries, but many believe they have no choice. At the same time, data from consuming countries which informs them about supply and demand is becoming less accessible.
Neil says there is a simple reason behind this dynamic: “From a UK or EU point of view, coffee isn’t that important. In Cameroon, it’s very important. So we have an interest differential that plays in the favour of consumer countries.”
However, Albert suggests there is a lack of transparency across the entire supply chain.
“Ask any origin country if they carry a stock number, and the answer will be that they don’t have any stocks,” he says. “There’s generally a lack of transparency across the industry.”
Some argue that market monopolies are to blame for this – and unless that changes, the dynamic will stay the same. As such, a balance is needed between commercial interest and the industry’s need for transparency. While a company has the right to withhold its information, doing so can make the market less transparent, which is detrimental to everyone involved.
“We’re gathering more and more data – is it going to be made available to all, or is it going to be reserved for the wealthy?” Neil asks. “We can’t silo everything off, it will have disastrous consequences.”
Ultimately, people can speculate as to why the GCA stopped sharing stockpile data, but the fact is that they were doing it on a voluntary basis, and the process was flawed in the first place. Whether or not it was reliable is a difficult question to answer.
However, as far as transparency is concerned, it feels like a step backwards – and many will claim that removing access to stocks information hurts more people than it helps.
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