Reuters reports that the global coffee market is experiencing serious upheaval. Due to the rapid rise in prices, trade volumes have fallen sharply.
Futures for Arabica coffee on the ICE exchange rose by 70%, which surprised many market participants.
Renan Chuery, CEO of the Ecuadorian coffee export company Elcafe, said that for the first time in the company’s history, it could not realize the planned production volume by March.
“We usually sell everything by this time, but we have sold less than 30% of the goods. The sharp rise in prices is depleting the financial resources of customers, they simply do not have enough money to purchase the required volumes,” explained Chuiri.
Due to high prices, coffee buyers are forced to abandon stockpiling. They are limited to purchasing only the minimum required volumes.
The rapid price rise was the decline in coffee production in key producing regions, primarily in Brazil.
Experts predict that prices for arabica could fall by 30% by the end of the year. This is due to expectations of a good harvest and lower demand.
The situation in the coffee market remains challenging. Some U.S. coffee sellers say they cannot continue their operations at current prices. Supermarkets and grocery stores, in turn, are in no hurry to buy expensive coffee, which leads to a shortage of this product on the shelves.