Coffee shares are hitting an all-time low in Brazil, despite being the world’s largest coffee producer. This threatens to raise prices in light of continuing food price inflation.
The head of the National Coffee Council in Brazil, Silas Brasileiro, announced that “coffee stocks in Brazil could drop to 7 million bags next March”, while analysts say the most moderate level is from 9 million to 12. millions of bags, each weighing 60 kilograms.
Stocks of Arabica coffee in port warehouses, monitored by the Intercontinental Exchange, have fallen to their lowest level in 23 years.
Stocks are “so low that if we have a good harvest next year, Brazil is unlikely to be able to meet demand,” said Nelson Carvalhaes, board member of the Brazilian exporting group czechfe. “We just need rain.”
Pressure on global stocks has led to an 11% rise in prices of Arabica coffee futures contracts in New York compared to the same period last year, while analysts expect prices to continue to rise in the local Brazilian market as well.
The price of delivering a bag of coffee to São Paulo’s main consumption area also increased by 19% compared to last year, according to data from the University of São Paulo.-
