Coffee Prices Soar to Highest in a Decade as Stockpiles Slide
In New York, coffee futures hit their highest level in ten years, amidst growing concerns about supply constraints.
Arabica prices have more than doubled in the last year as a result of dry weather in Brazil, supply chain disruptions, and increased transportation costs. To address supply shortages, roasters have depleted inventories, driving stockpiles monitored by the ICE Futures US exchange to their lowest level in 22 years.
Signs of supply constraints are emerging as global food prices continue to rise, recently approaching a record high.
Arabica futures reached their highest level since 2011 due to supply concerns.
According to Alex Boughton, a coffee broker at Sucden Financial Ltd, after reaching their lowest level since February 2000, ICE’s stockpiles are likely to fall below 1 million bags. This scenario could spark a sharp upward move, he said. On Wednesday, ICE reported that stocks held at the exchange’s monitored port warehouses fell for the 15th consecutive day to 1.035 million bags.
Another sign of supply constraints, Brazil’s green-coffee shipments fell 14% in January, with exporters group Cecafe president Nicolas Rueda stating that a lack of ship space remains a major issue for exporters. Stockpiles are depleted following last year’s production decline, a situation that is likely to persist until the new crop arrives in the market in May or June, he said.
Read more • bloomerg.com
Source: Coffee Talk