Declining Coffee Stocks in Brazil: An Impending Market Crisis

Brazil’s coffee stocks have seen a significant decline as farmers sell nearly all their beans in anticipation of record export prices. Prices for both Arabica and Robusta coffee varieties have reached all-time highs, leading to an projected emptying of warehouses by May. This situation could create additional challenges for consumers and international buyers amidst rising prices and climate change impacts on coffee production.

Brazil, known as the world’s largest coffee producer, is witnessing a significant decline in its coffee stocks, as reported by Azernews. Following one of the worst droughts in history, farmers have sold nearly all their beans in anticipation of record export prices, which have nearly doubled over the last year. This situation has left coffee warehouses unusually empty just months before the new harvest begins.

The escalating global prices have critically impacted the supply; Arabica coffee prices surged by 70 percent in 2024, while Robusta prices skyrocketed by 72 percent to reach an all-time high on February 12. Sales manager Villian Cesar Freyria from Cocapec, Brazil’s third-largest cooperative, indicated that current stock levels are alarmingly low and will not recover until the new harvest starts sometime in late May or June.

Cooxupe, the largest coffee cooperative, displays a similar situation, with almost all of its stock sold, awaiting shipment, as illustrated by Andre Silva Pinto, storage coordinator. Estimated figures from the firm Safras & Mercado suggest that 88 percent of the coffee has already been sold, leaving only 8 percent available in the market.

Due to these low stocks, warehouses may be completely depleted by May, and fresh beans are not expected until July. This supply gap is poised to exacerbate market volatility, raising pressures on consumers and buyers, particularly in importing nations that depend on affordable coffee. As climate change continues to impact global yields, the coffee industry is looking towards resilient coffee varieties and sustainable practices to adapt to these challenges.

In summary, Brazil’s coffee industry faces a critical situation marked by dwindling stocks and rising prices. The impact of climate conditions has resulted in farmers selling their beans ahead of the harvest, leading to unprecedented low inventories. This shortage not only benefits producers due to higher prices but also poses challenges for consumers and the global coffee market as a whole, with anticipated supply shortages that could further exacerbate price volatility. The evolving landscape of the coffee industry necessitates ongoing adaptation to climate challenges, underscoring the importance of innovative agricultural practices.

Original Source: www.azernews.az