In the photo above Jennifer Poole from Those Coffee People talks to a coffee farmer. Jennifer and her team work with foreign companies, such as roasters, who want a direct trade relationship with the farmers. Anyone that has worked in foreign markets (I have and have the scars to prove it) knows the importance of having a local, trusted expert.
Covid 19 has shown that the only reliable prediction is for unpredictability.
Coffee prices are no exception as disruption in the supply chain is compounded by more countries restricting exports of foodstuffs, a potential continued lockdown just as the critical harvesting season begins in Brazil.
Reuters wrote a report on the dilemma farmers are facing as a result of countries desire to stockpile – which has a short term positive effect, followed by downward pressure on pricing as they draw on those stockpiles. In the report Reuter’s cits a major US importer on the subject.
“We had requests from buyers in all major countries, U.S., Japan, Germany,” said the head of one of the largest coffee exporters in Brazil, the world’s leading producer, asking not to be named because he did not want to discuss the matter publicly. “Basically all the largest roasters in the world. They want to have the beans there quicker, just in case.”
If that wasn’t enough – a practically biblical plague of locusts has destroyed crops in East Africa!
The International Coffee Organization (ICO) commented on the situation
“ Following an initial spike in demand, there will be proportionally less demand in the coming weeks and months as consumers draw down stocks kept at home. “
The next 2-3 weeks will be critical as we see whether Brazil, in particular, is able to mobilise enough workers at the start of the harvesting season to raise production. Even if that happens, however, the logistics to support the delivery chain has to function, and that cannot be assumed at this stage.