Nearly 1x3 coffee is old beans, and the certified stock of ICE Arabica raw beans has reached a 24-year low.
On November 3, there were media reports that the certified inventory of Arabica coffee raw beans on the Intercontinental Exchange (ICE) continued to decline, recently to the lowest level in 24 years, which attracted the attention of the coffee industry.
According to the Coffee Finance Network, so far, the certified stock of raw coffee beans on the Futures Exchange totaled 368000 bags (about 60 kilograms each). In October this year alone, the stock of Arabica coffee raw beans on the ICE Intercontinental Exchange in the United States decreased by 61912 bags, while the stock in the Robusta coffee raw bean bank of the Intercontinental Exchange of ICEU in Europe decreased by 4050 bags.
Arabica Coffee inventory since 2017
The report pointed out that the emergence of such a low raw bean certified inventory is due to the fact that the spot price in the coffee market is actually higher than the ICE futures price (also known as "C price"). It is precisely because of the unstable prices in the spot market that many roasters prefer to buy raw coffee beans directly from the stock of the futures exchange in order to get more favorable prices.
In addition to the problem of the number of raw beans in stock, the problem of long storage time of raw coffee beans in the warehouse has also attracted the attention of the market. It is understood that of the 368000 bags of coffee beans in stock, at least 118000 bags have been stored in the delivery warehouse for more than a year, and about 68000 bags have been stored for even longer. This means that nearly 1 stroke 3 of the coffee beans in stock belong to old beans.
Storage time statistics of certified Arabica coffee beans
At present, however, the exchange has no coffee beans to be certified, which also means that inventory will be difficult to increase in the short term. Among them, it is mainly affected by the recent congestion in Brazilian ports.
According to the media, record exports of Brazilian agricultural products have led to a shortage of trucks and containers, which in turn has forced a large number of raw coffee beans to be exported for longer. Under the influence of inefficient logistics, the global supply of Brazilian coffee is also limited, and the futures price of Arabica coffee shows a short-term rebound trend, which may continue until the port resumes normal transportation.
In view of the current situation and the market following the global economic and financial instability, it is widely believed that large fluctuations in the price of raw coffee beans should be maintained in the medium term.
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