Brazil, the world’s largest coffee exporter warehouses have too many beans and nowhere to store them.
They have never been so full, and trucks in Brazil’s coffee heartland are waiting days to unload cargo collected from a record crop during a time when global demand is waning.
In Brazil’s top coffee producing states, trucks may have to wait around three days to unload, even with the warehouse running two hours extra each day and also on weekends.
The warehousing crunch comes after farmers- encouraged by higher prices in local currency sold most of this year’s harvest just as the pandemic shuttered restaurants, coffee shops and cafeterias across the globe, curbing consumption.
Demand for coffee remains weak, and speculation is that private warehouses are full even in the U.S.
Global stockpiles will climb 18% in 2020-21 to a six-year-high, according to the U.S. Department of Agriculture.Nick Gentile, managing partner for New York-based NickJen Capital Management
Demand for coffee remains weak, and speculation is that private warehouses are full even in the U.S., said Nick Gentile, managing partner for New York-based NickJen Capital Management. Global stockpiles will climb 18% in 2020-21 to a six-year high, according to the U.S. Department of Agriculture.
According to consulting firm Safras & Mercado, farmer sales hit an all-time high this year, reaching 60% of a harvest that’s estimated at 68.1 million bags. Some 41 million bags have been delivered to buyers, with most heading to trading warehouses.
Coffee futures extended their biggest drop in a decade on ICE Futures U.S. after a favourable weather outlook in Brazil fuelled a sell-off by funds. Earlier this month, futures climbed almost 40% from the year’s low in late June.