Logistics issues push up booking terms and prices for coffee
Bookings from Brazil to the USA, which usually take a month to meet the destiny, may take up to one hundred days now, according to an article from Bloomberg
Logistics issues push up booking terms and prices for coffee. Bookings from Brazil to the USA, which usually take a month to meet the destiny, may take up to one hundred days now, according to an article from Bloomberg. Additionally, the situation is not likely to improve very soon, which might cause prices to remain high.
The numbers about the delay were informed by Anike Ejlers Wolthers, from the coffee broker company: Red Container, based in Santos – BR. According to the article, such time lags are due to the lack of containers and vessels all around the world.
Even when a container is found, booking it is quite difficult. Ejlers and her logistics team spend many hours a day trying to get reservations.
According to CECAFÉ (Brazilian National Council of Coffee Exporters), between January and October 2021, 3,7 million bags of coffee were retained in the country due to logistics gaps (Brazil holds 40% of world’s total coffee production).
The problems include less containers available, and less space aboard the vessels, as well as frequent booking cancelations and cargo rolling, according to Eduardo Heron, Technical Director of CECAFÉ.
Still according to the article, Brazilian Arabica production fell in 2021 after harsh dry-season and frosts. For 2022, production is expected to be greater, but still below average, which will keep stocks low. NY Coffee future contracts rose about 80% in 2021.
Those factors are aggravated by La Niña, that is likely to bring unstable weather to producers in South America in the coming months and boost prices even further.