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Coffee supply in Brazil is enough to meet demand

Coffee supply in Brazil is enough to meet demand

The president of Brazilian Council of Coffee Exporters, states that the country does have enough reserves, and the current rainy period will be helpful

2 minutes read

A plentiful 2020/21 coffee crop in Brazil allowed good stocks to be built-up, in spite of recent weather issues that hit plantations. Brazil still has enough stock to ensure domestic supply and meet global demand. That has been stated by the president of Brazilian Council of Coffee Exporters (CECAFÉ), Nicolas Rueda, in an interview for Bloomberg, released by Money Times.

Brazil is the world’s largest coffee producer. Even though stocks are sufficient, the country has still been affected by logistic bottlenecks, which bring setbacks and hardens costs all over the supply chain. Onshore modal poor infrastructure also impairs production transportation.

“The whole logistic process has lost balance, and the recovery will take time,” said Rueda to Bloomberg.

Rueda said that logistic issues also hit maritime transport, due to the lack of containers that disturbed coffee exportations last year, despite the greater number of vessels available.

Market

USA ICE Futures monitors the stock of Brazilian coffee growers. After a two-year period of weather issues, and supply chain crisis, as a result of Covid-19 pandemic, Arabica future contracts have sprung to the highest prices in a decade.

The consequences of rising coffee prices directly affect the rise in living costs in a global scale. Not only does this condition apply to coffee, but it also happens when there is rise in price for other commodities in agribusiness.

According to latest data on the current condition of stocks, Brazilian Supply Company (CONAB) projects 13 mln 60Kg bags stored.

Perspective

Data from the USDA, show that the two consecutive low harvests in Brazil might push stocks near the lowest levels in decades.

On the other hand, according to Rueda, the rainy season has been rising perspectives for better production since late 2021. This might allow the recovery of coffee plantations, and ease the impacts imposed by drought and frost on the formation of coffee beans.