Traders Reroute Coffee Ships Away From Russia

Traders are diverting coffee shipments intended for Russia, and some have stopped selling to the market entirely, according to attendees at a US coffee conference.

Although food trade is not covered by the sanctions imposed on Russia following its invasion of Ukraine, difficulties in processing payments from Russian importers and concerns about the safety of ships in the Black Sea have resulted in the country losing shipments of coffee and other goods. Continue reading for the complete story.

Russia, which refers to its actions in Ukraine as a “special operation,” is one of the world’s top five coffee importers. Consumers in Russia are stockpiling food out of fear that supermarkets will run out.

Coffee prices in Russia have increased by more than 20% as a result of increased costs, broker HedgePoint reported last week. According to the brokerage, the ongoing conflict in Ukraine will result in a demand reduction of approximately 1.3 million 60-kg bags.

Marex, a European food trader, believes the impact on coffee demand will be greater, at around 1.8 million bags.

Olvin Lopez, commercial manager at Honduras-based coffee exporter Inloher, said he received instructions from his firm’s partner, the French food trader Sucden, to divert a coffee shipment departing Honduras bound for Russia to the port of New York.

“They did not specify why they are rerouting the cargo, but it is most likely due to logistical difficulties,” Lopez said on the sidelines of the SCA Coffee Expo in Boston.

According to a coffee trader who requested anonymity on behalf of an international dealer, soft commodities trader ECOM has decided to halt all business with Russia while the war continues.

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