No, Brazil Has Not Run Out Of Coffee


There has been much talk in the past weeks about uncertainty in coffee stockpiles, leaving some to wonder if a coffee shortage would soon be a reality. This, in turn, drove up coffee prices on the commodities market to 10-year highs. But the head of Cecafe, Brazil’s governing body for coffee exporting, says there is still more than enough to go around.

Coffee production in Brazil has been tough sledding for much of 2021. After a bumper crop the year prior, production has been hampered by unpredictable weather, including an unexpected frost and draught, while COVID-related shipping issues have slowed the movement of coffee within and from the country. This has made the task of tracking Brazil’s already murky stockpile of coffee even more challenging. And per Bloomberg, stockpiles monitored by the Intercontinental Commodity Exchange (ICE), “an important indicator for the supply and demand balance,” are at the lowest levels in 22 years.

But Cecafe head Nicolas Rueda states that there is still more than enough to meet demand. “This is not a moment of high stockpiles,” Rueda states, but thanks to the 2020 crop, “it was possible to pile up plenty of stocks.”

The larger issue facing the delivery of coffee, per Rueda, is shipping. While the availability of sea shipping increased at the start of 2022, the shipping containers necessary to transport cargo remain scarce. What coffee is able to make it to America then faces issues with a shortage of truck drivers to move it domestically.

So while the stockpiles have yet to run dry in Brazil, Bloomberg notes that there is little margin for error for future years’ crops; another draught or frost may be impossible to overcome. If 2022’s crop is similar to that of 2021’s the effects on the stockpile could be felt for decades. Luckily, the Arabica outlook has brightened, as rains are “allowing tree to recover,” per Rueda, though their effects won’t really be felt until the 2023-24 crop.

It’s good news for coffee traders. And along with last week’s shipment of at least 18,000 tonnes of Robusta to ICE in Antwerp by Vietnamese and Indonesian producers, much of the fear of a shortage can be assuaged, at least temporarily.

Zac Cadwalader is the managing editor at Sprudge Media Network and a staff writer based in Dallas. Read more Zac Cadwalader on Sprudge.

Photo from Can New Coffee Hybrids Save The Amazon From Deforestation? by Juliana Ganan






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