brazil decaf coffee bag


Brazilian exports of green coffee fell by 29% in September, according to Reuters, compared with the same month a year earlier, to 2.74 million 60-kg bags, exporters association Cecafe reported last week. On the year to date, overall exports are down 4.1%

According to the Council of Coffee Exporters of Brazil (Cecafé), billing increased by 0.5%, from 515.4 million dollars to 518.2 million dollars, bolstered by record prices, and up 6% on the previous year.

In terms of foreign sales, arabica coffee accounts for 80.1%, followed by robusta (10.1%) and soluble (9.7%).

The constrained supply of available containers was cited as the main contributing cause. The economic situation is quite unique in that normally it is the supply and demand, of a commodity that drives prices and influences monetary policy.

This time, however, producers who rely on logistics are finding a new part of the equation to consider – the critical long-term capacity of shipping and ports.

 Exports of Robusta fell by a hefty 51% to only 326,045 bags during the same period.

The drop in Robusta seems significant but was held up to some extent by Brazils domestic roasters who have started to use more of it as the prices of Arabica increased. At Bartalks, we have also noticed roasters in the UK starting to trial Robusta blends.

But if you can get beans loaded into a container, the problems don’t stop there. Hundreds of container ships have been sitting off the coast of California waiting their turn to dock, and the UK has seen container ships diverted to the Netherlands due to lack of availability at British ports. Will traders continue to buy coffee if it can’t be shipped, and ultimately sold?

Bloomberg has regular updates on the crisis, holding interviews with the Executives of major shipping companies, such as Maersk, and reported that the situation is going to continue through to next year, causing some companies to rethink their entire strategy.

Car companies have reportedly started to reconsider their ‘Just in Time’ model for parts, moving to a bigger warehousing and storage model, but they are able to dial-up manufacturing, while the coffee industry has to grow their production.

This constrained supply chain also means the price of landed coffee is unlikely to go down in the immediate future.

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