Wednesday, 23 October 2024

Co-fermented coffee

 Co-fermented coffee is a specialty coffee processed by adding external ingredients, such as fruits, herbs, or spices, to the coffee cherries during the fermentation stage to create distinct and vibrant flavor profiles. 

This natural process can result in intense fruit, spice, or even candy-like notes, but it is controversial within the industry for potentially masking the coffee's natural flavor and leading to disqualifications in competitions, according to some industry professionals. 

The Co-Fermentation Process

Mother Culture Creation: A "mother culture" is created with microorganisms from coffee plants and fed a mixture of fruit juices, fruits, and sweeteners. 
Cherry Preparation: Coffee cherries are selected based on their sugar content. 
Co-Fermentation: The cherries are pulped and then combined with the mother culture in a sealed tank for a controlled fermentation period. 
Drying: After co-fermentation, the cherries are dried, often in the sun and then under shade, until they reach a specific humidity level. 

Key Characteristics and Benefits

Flavor Innovation: The primary goal is to create unique and expressive flavor profiles, such as tropical fruit or candy-like notes, that are not achievable through traditional methods. 
Natural Flavor Development: Proponents argue that co-fermentation is an authentic way to develop flavor using natural ingredients and microbes, distinguishing it from coffees with added artificial flavors. 
Increased Market Value: Co-fermented coffees can command higher prices, as they offer a way to add value to coffee beans. 

Controversy and Industry Opinion

Natural vs. Artificial: Some argue that co-fermentation, even with natural ingredients, blurs the lines with flavored or infused coffee, which is often viewed negatively in the specialty coffee community. 
Disqualification from Competitions: The practice has led to disqualifications in high-profile competitions, such as the Best of Panama, with officials stating that co-fermented coffees are considered altered from their "natural DNA expression". 
Impact on Farmers: There's concern that co-fermentation could devalue the effort of farmers who invest in traditional processing methods, as it may become easier to achieve distinct flavors through this technique rather than through careful cultivation

Monday, 21 October 2024

Japan coffee growing regions

 Japan isn’t widely known as a coffee-producing country, but it does have a few small and distinctive coffee-growing regions. Because Japan’s climate is generally too cool for coffee, production is limited and considered more of a specialty or artisanal practice.

Here are the key growing areas:

1. Okinawa Prefecture
The heart of Japan’s coffee cultivation
Okinawa has the warmest, most subtropical climate in the country, making it the only region where coffee can be grown reliably outdoors.

Notable characteristics
Arabica coffee is grown, especially Typica and Catuaí varieties.
Farms are small and yields are low, but the quality is often high.
Coffee grown here is sometimes marketed as “Okinawa Coffee” and tends to be expensive.

Major locations
Yomitan Village – One of the best-known producing areas; hosts coffee farm tours.
Higashi Village – Features agroforestry coffee (grown alongside other plants).
Ishigaki & Miyako Islands – Smaller experimental plots.

2. Kagoshima Prefecture (Yakushima & Tanegashima)
Kagoshima, in southern Kyushu, has Japan’s mildest climate after Okinawa. Coffee is grown in:

Yakushima Island
A UNESCO World Heritage site with subtropical lowlands.
Some farmers grow coffee as part of diversified agriculture.
Production is tiny and experimental, but interest has grown in recent years.

Tanegashima Island
Similar climate to Yakushima, with boutique coffee farms exploring small-batch cultivation.

3. Greenhouse / Controlled-Environment Coffee (Various Regions)
Some coffee in Japan is grown in greenhouses or botanical gardens, especially for research or novelty.

Examples include:
Shizuoka (greenhouse-grown coffee at experimental stations)
Kanagawa (Yokohama’s Koganei area has hobbyist growers)
Tokyo (Shinjuku Gyoen and botanical gardens occasionally cultivate coffee plants)
These are not commercial-scale operations but demonstrate Japan’s scientific and artisanal interest.

4. Specialty Microlots & New Experimental Farms
In the last decade, a small wave of farmers across southern Japan—including parts of Wakayama, Miyazaki, and Kumamoto—have experimented with coffee cultivation, usually under protective structures or in sheltered microclimates. Production remains extremely limited but is growing slowly due to specialty-coffee demand.

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What Makes Japanese Coffee Growing Unique?

- High labor and land costs → extremely premium pricing
- Very low yields → beans often sold in tiny lots
- High quality control due to Japan’s precision-focused farming culture
- Appeal to food tourism → farm tours, on-site roasting
- Climate challenges → frequent typhoon exposure, low heat accumulation

Vietnamese coffee

Vietnam is the world's second-largest coffee producer (after Brazil), primarily growing Robusta beans in the Central Highlands, though challenges like climate change and the need for more sustainable practices are impacting the industry. Most coffee is hand-picked and then wet processed, with little focus on natural, honey.

Apart from the Central Highlands (Tây Nguyên), two other coffee producing areas stand out:
The Northwestern Highlands (Tây Bắc) including the Son La highland and Moc Chau plateau areas
and 
The Central Coastal Region (Trung Bộ)... Quang Tri and Nghe An provinces. Particularly in Khe Sanh region.

In the past, the focus was quantity over quality but this is changing.

The country is also the largest Robusta producer globally, with approximately 97% of its coffee output being Robusta, and exports are a major source of income. Recently, a decline in Robusta output has led to higher prices and has farmers exploring other crops like pepper and fruit. 

Key aspects of coffee growing in Vietnam

Dominance of Robusta: Vietnam is the world's largest Robusta producer, with it making up about 95% of its coffee output.  This hardy bean is well-suited for mass cultivation in the region's climate.

Arabica makes up about 5%. This is grown in both North and South regions of Da Lat, Dien Bien, Nghe An, Son La, and Quang Tri, which range in maximum altitude from 1000 to 1400 m.a.s.l  The most common arabica variety in Vietnam is Catimor, which is high-yielding, resilient, and grows at lower altitudes. There are also small farms growing Bourbon and Typica.



Central Highlands (Tây Nguyên): This region is the heart of Vietnam's coffee production, accounting for around 80% of the country's Robusta coffee. The climate is tropical and warm with rainy and dry monsoon seasons. The central highlands includes five provinces: Dak Lak, Gia Lai, Dak Nong, Lam Dong, and Kontum. Altitudes here range between 300 m.a.s.l. and 600 m.a.s.l.
Prominent Vietnam coffee plantation locations in the Central Highlands include: Dak Mil (Dak Nong), Dak Ha (Kon Tum), Chu Se (Gia Lai). Most notably, Buon Ma Thuot in Dak Lak province is recognized as the world’s premier coffee-producing hub.



Export market: Vietnam is the second-largest coffee exporter globally, with a significant portion of its coffee being exported to Europe. Most coffee is exported as green beans for processing elsewhere.

These are some of the northern regions of coffee growing.

Northwestern Highlands (Tây Bắc) 

Dien Bien;
Dien Bien's coffee growing areas are located at an altitude of 900 to 1200 meters above sea level, with some regions reaching up to 1400 meters. The region's mountainous terrain and cool, rainy climate create ideal conditions for high-quality Arabica coffee, similar to the soil in Brazil's Sao Paulo region. 

Son La
The Son La coffee growing area's altitude is typically between 900 and 1,200 meters above sea level, though some sources cite a broader range from 600 to 1,050 meters



Nghe An and Quang Tri are located in the Central Coastal Region.

Nghe An
The altitude for growing coffee in Nghe An is generally between 1,000 and 1,400 meters above sea level

Quang Tri
The primary coffee-growing region in Quang Tri, centered around Khe Sanh, has an average altitude of 350-500 meters. Khe Sanh’s (Quang Tri) and Phu Quy’s (Nghe An) geographical and climatic conditions better suit Catimor varieties. Catimor represents a crossbreed between Caturra (Arabica) and Hybrid de Timor (an Arabica-Robusta hybrid)

Focus on quality: Historically, Vietnamese coffee production focused on quantity. However, there is a growing trend toward improving quality, with farmers experimenting with more sophisticated processing methods for both Robusta and Arabica beans.

Historical context: Coffee was introduced to Vietnam by the French in the 19th century. The industry experienced rapid growth starting in the 1990s due to economic reforms.


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Friday, 18 October 2024

BSL - bluescope

 BSL Bluescope steel
05-july 2026

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ASX:BSL (BlueScope Steel) has experienced a highly cyclical five-year period. The company generated massive pandemic-era profits peaking in FY2022 but has since seen earnings decline significantly due to softer steel spreads and cyclical headwinds. Despite the downturn, BSL maintained a robust balance sheet with minimal debt. [1, 2, 3, 4, 5]
Financial Highlights over the Last 5 Years
  • Profitability: Net profit skyrocketed to a record AUD 2.81 billion in FY2022 on the back of historic steel spreads. Since then, profits have progressively tapered down. FY2024 net profit sat at AUD 804 million, before dropping to AUD 83.8 million in FY2025 due to challenging cyclical market conditions and asset impairments. [1, 2, 3, 4]
  • Debt: BlueScope has maintained an exceptionally conservative balance sheet, operating in a net cash position for much of this period. As of recent figures, the Debt-to-Equity ratio sat comfortably around 8% to 10%, with cash and equivalents exceeding outstanding debt. [1, 2, 3]
  • Return on Equity (ROE): ROE followed the broader profit cycle. It spiked to an impressive 32.2% in FY2022 before trending downwards to 10.1% in FY2023 and 7.6% in FY2024. In the most recent trailing twelve months, ROE has compressed to roughly 3.4%. [1, 2]

Recent Developments
  • Takeover Bids: In early 2026, BlueScope rejected unsolicited takeover proposals from Seven Group Holdings (SGH) and Steel Dynamics. The final revised A$32.35 per share proposal was spurned by the board as undervaluing the company. This is mostly why I own shares in this company. [1, 2]
  • Shareholder Returns and Dividends: BlueScope declared unfranked dividends of A$1.00 & A$0.65 per share (see that crazy spikes in the dividend of Jan & Feb 2026). The board indicated plans to significantly rebase returns, targeting to distribute at least 75% of free cash flow as ordinary dividends (we will see). There is zero franking, so keep this within super. [1, 2]
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PE ratios
Over the last 10 years, BlueScope Steel Limited (ASX: BSL) has traded at a 10-year median P/E ratio of 10.59. Its valuation fluctuates heavily due to the highly cyclical nature of global steel prices and manufacturing margins. [1, 2]
As of July 2026, its current Trailing Twelve Months (TTM) P/E ratio sits at roughly 54.95, driven upward by a sharp drop in earnings per share over the last couple of years. [1, 2, 3]
10-Year Historical P/E Ratio Overview
The following table shows the approximate P/E ratios for BlueScope Steel over the past decade, reflecting a mix of standard financial year-end reports and calendar year closes: [1, 2, 3, 4]
Year [1, 2, 3, 4, 5, 6, 7]Approximate P/E RatioValuation Context
2026 (Current TTM)~54.95Cyclical earnings dip; stock price remains resilient.
2025~48.13 to 128Subdued global steel demand compressed compressed margins.
202411.23 to 11.5Moderating earnings but closer to long-term averages.
20239.43 to 11.14Normalization from pandemic-era record highs.
20222.58 to 2.61Historically low P/E due to record windfall profits.
20219.27Strong post-COVID infrastructure boom boost.
2020~15.5Industrial slowdowns caused by global pandemic lockdowns.
2019~6.5Strong building and construction demand globally.
2018~9.2Steady margins across US and Australian divisions.
2017~12.8Recovery phase driven by restructuring efficiencies.
2016~18.5Turning point from previous loss-making years.
Crucial Financial Insights For BSL
When reviewing BlueScope's historical multiples, keep these factors in mind:
  • The "Cyclical Trap": BlueScope often looks cheapest (lowest P/E) at the top of its profit cycle (e.g., 2.58x in 2022) because its immediate earnings are temporarily inflated. Conversely, it looks expensive (high P/E) at the bottom of a cycle when its earnings drop but investors hold the stock anticipating a recovery. [1, 2]
  • Long-Term Medians: While the historical 10-year mean is skewed high (~24.4) by occasional low-earnings periods, the 10-year median sits at a lean 10.59. [, 2]
  • Forward Expectations: Analysts project a significant rebound in earnings over the next 3 years, which drops its Forward P/E ratio much lower than the current trailing figures. [1, 2]
charts
below $26 its a buy


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Wednesday, 16 October 2024

Costa Rica - coffee

Costa Rica produces some of the world's highest-quality Arabica coffee, benefiting from ideal conditions like fertile volcanic soil, high altitudes, and consistent rainfall. 
It sits just north of the equator.

The country is a leader in the boutique micro-mill movement, with diverse microclimates producing distinct flavors. 

Known for being rich, balanced, and full-bodied, Costa Rican coffee often has notes of caramel, honey, and dark chocolate, with unique sweet and floral aromas. 

The government's investment in technology and support for small farms have solidified its status as a major, high-quality coffee exporter. 




Costa Rica's eight main coffee-growing regions are Tarrazú, Central Valley, West Valley, Tres Ríos, Orosi, Turrialba, Brunca, and Guanacaste. 
These regions are characterized by high altitudes, fertile volcanic soils, and a distinct dry and rainy season, which contribute to the production of high-quality, well-balanced Arabica coffee with bright acidity.  

Officially Costa Rica had eight primary regions for coffee production. Now it has 7: 
Northern zone, Western Valley, Central valley, Los Santos, Perez Zeledon, Turrialba, Corto Brus,

Processing Methods Used

Costa Rica is renowned for innovative coffee processing, primarily using washed (wet), honey, and natural (dry) methods to create varied flavour profiles. The country is a pioneer in honey processing—a hybrid method leaving mucilage on the bean—alongside specialized techniques like rare hot spring fermentation to improve sweetness and complexity. 

Washed (Wet) Process: Often called "beneficios," this traditional method removes all pulp and skin before drying, resulting in a cleaner, higher acidity cup.
Honey Process: A specialty of Costa Rica, this method removes the skin but leaves varying amounts of sticky mucilage (honey) on the bean while drying.
White/Yellow Honey: Lower percentage of mucilage; lighter, faster drying.
Red/Black Honey: Higher percentage of mucilage (up to 100% for black); creates a sweeter, heavier-bodied cup.
Natural (Dry) Process: The entire coffee cherry is dried intact, allowing the bean to absorb sugars from the fruit, resulting in a fruitier and full-bodied coffee.
Innovative Methods: Some farmers use unique techniques, such as the "Hot Springs Technique" utilizing, geothermal spring water to ferment the beans.
Decision Factors: Producers decide on the process based on rainfall, with honey and naturals often chosen when conditions allow to maximize sugar content.

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Northern Zone:
Guanacaste, Puntarenos, Alajuela
The Northern Zone of Costa Rica, also known as Huetar Norte, is a region in the northern part of the country, bordering Nicaragua to the north. It is located to the northeast of the capital, San José.

It is home to popular tourist destinations like the Arenal Volcano National Park near La Fortuna, the cloud forests of Monteverde, and the Tenorio Volcano National Park with its blue Celeste river. 

The Northern Zone of Costa Rica features varying altitudes, with lower mountain ranges compared to the rest of the country, featuring peaks reaching up to 2000m 
and several, lower mountain passes between 500m
 and 100m). This region transitions from low-lying plains near the Nicaraguan border to higher volcanic terrain. 

Key Elevation Features in the North:
Mountain Passes: Several key passages exist between 
500m and 1000m.
Peak Elevations: Mountain ranges in this area peak at around 200m.
Lowlands: The northern plains near the border are much lower, descending toward sea level.
Volcanic Influence: Areas surrounding features like the Arenal Volcano rise abruptly from the surrounding, lower-lying plains. 

This region generally has a lower and more broken terrain compared to the southern pacific and central highlands, affecting its local climate


West Valley: A crucial growing area with microclimates, fertile soils, and the ability to harvest cherries during the drier summer months. 

Coffee in Costa Rica's West Valley region is generally grown at high elevations, ranging from 1,200 to 1,900 meters above sea level (masl). This area is known for producing Strictly Hard Bean (SHB) coffee, typically cultivated between 1,200–1,700 masl, ensuring dense beans with rich flavor profiles like papaya, honey, and citrus. 

West Valley Altitude Highlights:
Primary Growing Range: 1,200–1,800 masl.
High-Altitude Specifics: Specific micro-lots and top-tier farms often operate at 1,600–1,700+ masl.
Key Locations: Many farms are located in areas like Llano Bonito de Naranjo. 

The region's sloped terrain, rich volcanic soil, and high altitudes contribute to a highly regarded, dense coffee bean. 

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Central Valley: 
The Central Valley of Costa Rica is located in the central highlands of the country and is the most populated region, containing most of the large cities and government centers. It is a highland valley defined by low volcanic hills and is divided into basins drained by rivers like the Reventazón. The valley includes the capital city, San José, and other provincial capitals such as Cartago and Alajuela. 

Coffee is well-balanced & high-quality, known for its chocolate, fruit, and honey notes, thanks to its rich volcanic soil and ideal climate. 
Coffee from this region is often a blend of Strictly Hard Bean (SHB) varieties, meaning it's grown at high altitudes where it matures slowly, resulting in a denser, higher-acidity bean. These beans stand up well to roasting, producing a strong, flavorful cup.  
Grown at altitudes from 1,000 to 1,200 meters, but is also highly produced at elevations up to 1,700 meters.
 The region has a well-defined wet and dry season, and a consistent temperature that allows for slow maturation of the coffee beans. 
Bean characteristics:
The slow maturation process makes the beans "hard" and dense, which contributes to their vibrant acidity and complex aromatic features. 
Varietals:
While many varietals are grown, some Bourbon and Caturra varietals are still cultivated in the Central Valley. 
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Tarrazú: A specific area within the Central Valley, known for producing some of the country's finest Arabica beans. 
Dota Tarrazu coffee refers to premium coffee grown in the Dota region of Costa Rica's Tarrazú mountains, known for its high altitude, volcanic soil, and the Coopedota cooperative. The coffee is celebrated for its bright, clean acidity, and complex flavors, which include notes of citrus, stone fruit (like peach and apricot), honey, and chocolate, with a smooth, full body and sweet finish. It is a versatile coffee, excellent for both espresso and various filter methods like Aeropress or V60, and is often available in light to medium roasts that highlight its bright, floral characteristics. 

Costa Rica Tarrazú coffee is cultivated at high altitudes, typically ranging from 1,200 to 1,900 meters (roughly 3,900 to over 6,000 feet) above sea level. These high-elevation, volcanic soil conditions in the interior mountains are ideal for producing dense, premium-quality, and complex coffee beans. 

Key Altitude Details for Tarrazú
Common Elevation Range: 1,200–1,800+ meters (approx. 3,900–5,900+ feet).
Specific High-Grown Areas: Many premium producers harvest at 1,500 MASL (meters above sea level) or higher, often classified as Strictly High Grown (SHG).
Location: The town of San Marcos, a key town in the region, sits at around 1,350 meters. 

Common Usage/Synonyms
When searching for Tarrazú coffee, the altitude is synonymous with terms indicating high quality due to slow bean maturation: 
SHG (Strictly High Grown): The standard classification for coffee grown above 1,200–1,400 meters.
SHB (Strictly Hard Bean): Used interchangeably with SHG to denote density.
High-Altitude Coffee: Emphasizing the cool, steep terrain that enhances flavor profiles. 

Usage Example: "A top-tier Tarrazú SHB washed coffee from 1,700 meters
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Tres Ríos: Located near the Pacific Ocean and the capital city of San José, this region produces distinct, bright, and sweet coffees. 

Tres Ríos, located in the La Unión canton of Costa Rica’s Cartago province, lies at an elevation of approximately 1,345 meters (4,413 feet) above sea level. This mountainous region is known for its coffee-growing altitude and lies between San José and Cartago. 
Elevation Details: 1,345 meters (approx. 4,413 feet).
Location: 12 km east of San José, 11 km west of Cartago.
Context: It is part of the central valley highlands characterized by high-altitude coffee cultivation.
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Orosi: A region known for its lush landscapes and high-quality coffee production. 
 Based on regional data for the Cartago Province where the Orosi Valley is located, the altitude in the area typically ranges from roughly 1000m to over 1500m in surrounding hilly regions. 
The Orosi Valley itself sits lower, creating a lush, subtropical microclimate suitable for coffee cultivation, while nearby peaks like Irazú rise to over 3400m. 

Key Altitude Details and Context
Location: Orosi Valley, Cartago Province, Costa Rica.
Average Elevation: The surrounding Cartago province has an average elevation of 
1374m.

Usage Examples: The high-altitude, cool, and humid environment (often above 1000m) is primarily used for specialized agricultural production, specifically high-altitude Arabica coffee farming, which thrives in this climate.

Regional Topography
Lower Valley: The town of Orosi is located at a lower elevation along the Orosi River.
Surrounding Mountains: The area is bordered by mountains, including portions of Tapantí National Park, which contribute to rapid increases in elevation.
Nearby Volcano: The nearby Irazú Volcano reach maximums of over 3400m.

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Turrialba: A fertile area with winding rivers and thriving coffee plantations, also recognized for chocolate. 

The Turrialba Volcano summit reaches an altitude of approximately 3,340 meters or 10,958 feet above sea level, making it the second-highest active volcano in Costa Rica. The town of Turrialba sits lower, at roughly 2,119 feet (646 meters). The area is known as the "Central Highlands," characterized by high altitude, lush landscapes, and active volcanic activity. 

Key Altitude Details for Turrialba:
Volcano Summit: 3,340–3,350 m 
Town Elevation:646 m.
Crater Depth: The volcano has three main craters, with the largest having a diameter of 50m 
Location: The town lies roughly 45 minutes from the volcanic summit. 
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Brunca: Another of the country's distinct coffee-growing regions. 

The Brunca region in southern Costa Rica is characterized by a wide range of altitudes, generally spanning from sea level up to high-mountain areas, with coffee cultivation typically occurring between 800 and 1,700 meters above sea level (masl). 

Key Elevation Details for Brunca:
General Coffee Range: 800–1,700 meters.
High-Altitude Coffee: High-quality lots are often found at upper elevations, such as 1,400–1,800 meters.
Lower Elevations: Some areas in the region, particularly near the coast (Osa, Golfito), are at or near sea level, but these are not the primary areas for specialty coffee cultivation.
Key Coffee Sub-regions: Coto Brus and Pérez Zeledón are the primary coffee-producing cantons in the region, with elevations varying significantly, including some at roughly 1,500 meters.
Topography: The region is bordered to the north by the Cordillera de Talamanca, which includes Chirripó, the highest peak in Costa Rica at 3,819 meters, allowing for steep elevation gradients. 

Coffee Profiles by Altitude in Brunca
High Altitude (1,400–1,800m): Produces higher-quality coffee with more acidity, featuring notes of stone fruit, green apple, and complex flavors.
Lower Elevation: Generally produces higher volumes but is often used for, or blended for, its mild character.

Guanacaste: One of the eight official coffee regions in Costa Rica

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