Blocked Suez Canal, shortage of shipping containers, global price of Arabica coffee beans may soar

Professional coffee knowledge exchange more coffee bean information please follow the coffee workshop (Wechat official account cafe_style)

Coffee supplies in the United States are shrinking, wholesale prices are soaring, the global shortage of shipping containers has hit food trade, and hard-hit markets are preparing for further impact, Bloomberg reported. Although Brazilian coffee production hit a record in 2020, US coffee stocks have fallen to a six-year low. As demand rebounds, Brazil's coffee production due to drought has fallen sharply, which is expected to turn the global coffee production balance into a deficit.

Central and South America is an important source of coffee supply for the United States, especially in Brazil, where container capacity is seriously insufficient, and import traders and roasters have to face rising costs and tight supply. The head of Florida importers said: "Shipping charges for imports from Central and South America have more than doubled."

From the coffee market shows that as the economy recovers, food inflation may continue to rise. Arabica coffee futures in New York have risen about 24 per cent since the drought in Brazil at the end of October. Us raw bean stocks fell 8.3 per cent in February from a year earlier, the smallest decline since 2015, according to industry data on Monday.

Analysts said the reduction in inventories meant that the effect of buffering production cuts in the production season of Brazilian coffee 2021 gamble 22 was weakened, exacerbating market tensions and providing continued support to prices. This month, Marex Spectron raised its forecast for the global coffee gap between 2021 and 2022 to 10.7 million bags, compared with its previous forecast of 8 million bags, on the grounds that drought had affected coffee trees to blossom and led to a decline in Arabica coffee production in Brazil. If coffee production in Central America does not improve in the next few years, the market will enter a structural deficit as demand rebounds, Goldman Sachs Group said in a report.

The director of Dinamo, one of the large Brazilian coffee warehouse operators, said: the company's coffee warehouse in the city of Minas Gerais Machado is waiting for 18 containers for coffee beans to be exported, but due to congestion at the port, these containers may take about 15 days to arrive, which also reduced Brazilian coffee exports in March.

The world's largest shipping company says it is temporarily unable to buy or lease containers and chartered ships, exacerbating port congestion and export delays. They are trying to buy or lease all available containers and continue to operate using aging containers. Originally, the company also said that this was temporary in terms of both the procurement model and the supply of ships, and they expected the situation to return to normal in the first half of 2021.

But shortly after entering the Suez Canal, a very large container ship owned by Changrong Shipping named EVER GIVEN (400m captain and nearly 59m wide) ran aground in the southern section of the Suez Canal, cutting off the Suez Canal. As a result, the rear 15 container ships were forced to stay where they were, and the waterway of the southbound fleet was blocked.

At present, the global container shipping industry is in a serious bottleneck period, and the Suez Canal is also one of the busiest waterways in the world, connecting the main international shipping lanes of Europe, Asia and Africa. The canal handles about 10% of the world's seaborne trade, which means that when the artery gets stuck, the goods cannot flow. After the time of stranding, the market expected coffee prices to soar on that day, and the futures price of type C coffee in the United States (March 22) closed up 3.71%.

Goods can not be exported smoothly, containers can not reach more ports in a short time, the congestion of ports and the shortage of containers are increasing. Brazil's national coffee harvest season is ready to begin, the export of Brazilian coffee will also be seriously affected, and the global price of coffee is expected to rise further.

For more boutique coffee beans, please add private Qianjie coffee on Wechat. WeChat account: kaixinguoguo0925

FrontStreet Coffee is a long-established specialty coffee roaster in Guangzhou China, selling freshly roasted beans from its own farm in Yunnan as well as dozens of carefully selected single-origin beans from around the world for both pour-over and espresso. The products deliver consistently excellent quality and great value, with shipping within 24 hours. Guangzhou’s FrontStreet Coffee shop is recommended by many coffee lovers, and the beans are now available online at the Tmall 。

Important Notice :

前街咖啡 FrontStreet Coffee has moved to new addredd:

FrontStreet Coffee Address: 315,Donghua East Road,GuangZhou

Tel:020 38364473