There is a shortage of coffee.
The crunch in supply is caused in part by Covid; in part by the world-side shortage of shipping containers; a drought in Brazil; the recent Suez blockage; La Nina weather (a warm wet weather pattern between Australia and the Western Hemisphere); a national strike in Colombia; the value of the Brazilian currency; and damage to coffee related infrastructure in Central America due to hurricanes in 2020. All of these events are contributing to a coffee price spike that has already reached above a 65% increase in the value of the “C” Contract during the last months. Specialties as Colombia and Kenya have moved even further.
The International Coffee Organization (ICO) estimates that the world crop will be short almost 11-million bags this crop year. Your customers are going to have questions. Follow the links below to educate yourselves to what is going on in the economic world of coffee right now, and check with the Gillies Market Feed to get the latest market updates: https://www.gilliescoffee.com/education-tools.
Bloomberg: https://www.bloomberg.com/news/articles/2021-05-07/arabica-coffee-set-for-longest-run-of-weekly-gains-since-2019 (Retrieved 05.19.21)
NASDAQ: https://www.nasdaq.com/articles/softs-coffee-futures-surge-to-multi-year-highs-sugar-and-cocoa-also-up-2021-05-05 retrieved 05.19.21Scoop Empire: https://scoopempire.com/why-the-suez-canal-blockage-will-increase-the-price-of-coffee/ (Retrieved 05.19.21)
Global Times: https://www.globaltimes.cn/page/202105/1223542.shtml (Retrieved 05.19.21)
Global Trade Magazine: https://www.globaltrademag.com/colombia-traviesa-harvest-report-la-nina-reduces-yields-as-prices-soar/ retrieved 05.19.21Sprudge: https://sprudge.com/protests-violence-and-calls-for-support-the-voices-of-colombias-coffee-professionals-updating-177869.html (Retrieved 05.19.21)