Coffee review

The shipping problem of coffee export is serious, and the number of coffee stocks in Europe is declining.

Published: 2024-04-19 Author:
Last Updated: 2024/04/19, According to the Brazilian Coffee exporters Association (Cecafe), before January 25, Brazil exported a total of 2486267 bags of coffee, of which 2013917 bags of Arabica beans accounted for 81%, and 280995 bags of Robusta beans accounted for 11%.

Before January 25, Brazil exported 2486267 bags of coffee, of which 2013917 bags of Arabica beans accounted for 81%, 280995 bags of Robusta beans accounted for 11%, and 191301 bags of instant coffee accounted for 8%, according to the Brazilian Coffee exporters Association (Cecafe). It has decreased by about 10% compared with the same period last year.

The sharp drop in coffee exports in January was due to the lack of port capacity. In mid-to-late January, the port of Santos and Guaruluz International Airport, Brazil's largest export port, were hit by a strike by tax declarants. During the strike, only perishable goods, fresh and live goods, dangerous goods, medicines and food can be cleared, and the rest of the goods will not be cleared. As a result, a lot of losses have been caused, and it is estimated that about 6500 import declarations and about 4000 export declarations at the port of Santos cannot be released.

Although the strike lasted only 4 days, coupled with the current port equipment outdated, outdated management and lack of manpower and other problems, resulting in port congestion, ships were delayed and so on. At present, there are about 848371 bags of coffee waiting to be exported at the Brazilian port.

And European coffee stocks are falling. Coffee stocks at major European ports are drying up, according to the European Coffee Federation (ECF). December 2023 totaled 437059 tons, a decrease of 37.9 per cent compared with January 2023.

This is due to the introduction of non-deforestation regulations (EUDR) in the European Union, which stipulates that no individual or company can sell products involving deforestation, including coffee, cocoa and other products in the EU market. Although it is currently in transition and will not be implemented until December 2024, many traders have reduced their coffee imports.

In addition, the Red Sea crisis intensified, which also led a number of international shipping companies to announce the suspension of Red Sea routes, or choose to divert to the Cape of good Hope. As a result, sea freight rates continue to rise, and transportation costs have increased significantly. Diverting to the Cape of good Hope to avoid the Red Sea route has also raised fuel costs for merchant ships. Container freight along the severely affected Eurasian route has risen by 150%, and as ships have been forced to divert to the Cape of good Hope, major producing countries such as Vietnam and Indonesia in the Asian region face delays of about three weeks in coffee delivery. And the cost of the detour amounts to hundreds of millions of euros a month, so traders are buying fewer coffee beans in Asia.