Global coffee traders are reducing purchases due to record price increases

Global traders and coffee roasters are cutting purchases to a minimum due to the record rise in arabica bean prices. Over the past year, coffee prices have increased by 70%, causing problems in the industry and leading to product shortages on supermarket shelves. This was reported by Investing, writes UNN.

Details 

Participants of the annual meeting of the National Coffee Association of the USA in Houston this week stated that they were shocked by the 70% increase in arabica coffee futures on the ICE exchange, which serves as a benchmark for coffee market transactions worldwide.

Renan Chueiri, CEO of ELCAFE CA in Ecuador, said that this year the instant coffee producer has not sold the expected annual production volume by March for the first time.

“Usually we would have sold everything by now, but so far we have sold less than 30% of the product,” he said. “The significant price increase is eating into customers’ cash flow; they don’t have the money to buy what they need.”

The rise in coffee prices is due to a decrease in production in key coffee-growing regions, especially in Brazil, which is the leading producer, leading to reduced bean availability.

“No one wants to be caught off guard, no one is buying with an eye on future supplies, everyone is barely making ends meet,” said one coffee sales broker.

Scientists find unexpected link between coffee drinking time and health08.01.25, 11:38 • 79113 views

According to a recent Reuters survey, arabica coffee prices could fall by 30% by the end of the year, as high prices are dampening demand, and there are already signs indicating a bountiful harvest in Brazil next year.

But until prices significantly drop, much of the coffee industry may face serious problems.

The CEO of a large coffee roasting company in the USA – the largest coffee consumption market in the world – stated that some of his clients are unsure if they will be able to continue doing business.

“They don’t know if they can sell their product at the new prices,” he said.

The CEO said that supermarkets and grocery stores resisted the higher prices demanded by roasters. Negotiations took a long time, and some retail stores began to feel a coffee shortage on the shelves.

“It was a nightmare,” he added.

Michael von Luerte, owner of the brokerage firm MVLcoffee, stated that consolidation may occur in the coffee market, especially in the trading sector.

He added that companies with large capital will be able to increase trading volumes while others will suffer due to funding cuts.

Commodity trader Louis Dreyfus stated in his speech at the conference that coffee planting areas are expanding in response to high prices.

The expansion has occurred in countries such as India, Uganda, Ethiopia, and Brazil. The company believes that if Brazil manages to harvest one large crop, this, combined with new planting areas, could lead to a price collapse.

Doctor: Ground coffee may contain microscopic cockroach particles14.01.25, 22:15 • 37941 view