Brazil’s coffee stocks are declining dramatically as coffee warehouses deplete due to record-high global prices. While Brazilian farmers have largely sold their stocks capitalizing on the market, other exporters like Vietnam face production difficulties. The anticipated coffee shortages may lead to rising prices and market volatility ahead of the new harvest, with the industry exploring sustainable farming adaptations.
Brazilian coffee stocks are experiencing a significant decline, with warehouses that typically hold millions of bags of coffee nearly empty. This situation follows a recovery from a severe drought, prompting farmers to sell their coffee well ahead of the new harvest due to soaring global prices, which have almost doubled over the past year.
As the leading coffee producer globally, Brazil’s farmers have capitalized on record exports expected in 2024, depleting their stocks. In contrast, Vietnam, the second-largest exporter, faced a 17.2% drop in exports due to adverse weather affecting robusta coffee production, according to Reuters.
Arabica coffee prices surged by 70% in 2024 and nearly 20% this year, reaching historical highs. Similarly, robusta coffee prices rose by 72% in 2024, hitting $5,847 per ton earlier this year.
Villian Cesar Freyria, a sales manager at Cocapec, noted, “We’ve never had such low stocks in February.” He emphasized the lack of coffee available until the next harvest begins, a sentiment echoed across the industry.
Andre Silva Pinto, from Cooxupe, the world’s largest coffee cooperative, explained that while warehouses appear full, most of the coffee has already been sold and is waiting for shipment. This observation aligns with data from Safras & Mercado, estimating that 88% of the coffee is sold and only 8% remains on the market.
Due to reduced exports, warehouses are projected to run out of coffee by May, with the new harvest not starting until late May or June. Fresh beans are unlikely to arrive until at least July, compounding market challenges.
The shortage is causing price fluctuations in the global coffee market. Although rising prices are beneficial for Brazilian farmers, they pose challenges for consumers and countries dependent on affordable coffee imports. The combination of low stock levels and an impending supply gap anticipates further price increases and potential availability issues.
Amid these challenges, the coffee industry is investing in adaptive measures to cope with climate change’s impact on crop yields, exploring resilient coffee varieties and sustainable farming practices.
Brazil’s coffee stocks are critically low, primarily due to a successful export strategy in the wake of high global prices, with significant implications for the market. The exhaustion of supplies before the new harvest, coupled with production challenges in other coffee-producing nations, suggests ongoing volatility in coffee prices. As climate change poses further risks, the coffee industry is motivated to adopt sustainable practices to ensure future resilience.
Original Source: www.azernews.az
