Due to a shortage of shipping containers across the world, coffee supplies in the U.S. are shrinking and wholesale prices are surging, with the hard-hit market bracing for further fallout.
Despite Brazil’s record crop, coffee stockpiles have sunk to a six-year low in the U.S. and a large drop in output is expected with Brazil going into a drought. With the Covid pandemic, demand for coffee has skyrocketed in the last year, and dit is expected to push coffee prices up during the rest of 2021
Arabica-coffee futures in New York have risen about 24% since the end of October following the damage to Brazilian groves. In February, American green, unroasted bean inventory slid 8.3% from a year earlier to the smallest since 2015, industry data showed Monday.
The lower inventories mean less of a buffer to cushion the expected decline in Brazil’s crop, aggravating market tightness and lending continued support to prices, analysts say.