Because of the corona virus pandemic, prices are high Agricultural commodities to spin badly. It is different with coffee who has been solid so far. According to experts, the Awakeners benefit from home office time.
There are many different coffee plants, but only two varieties are very important on the market: Arabica and Robusta, also known as Canephora. Arabica beans are used to produce around 60 percent of the world’s supply. The variety is considered the more demanding in cultivation.
Earlier trend down
Until recently, the trend in prices was actually pointing downwards. A ton of Robusta currently costs $ 1,205. A few years ago, the ton was even paid over $ 2,000.
The long-term price of Arabica coffee is also down. In the short term, however, the development looks more positive. Because a year ago the pound cost 90 cents. And even at the beginning of February 2020 – after an intermediate high of around 130 cents at the end of 2019 – it was just under 100 cents.
Defying the sale
Arabica coffee defied sales in the international financial markets in the wake of the corona pandemic in March, and prices even rose. According to experts, the reason for this is relatively simple: the fear of Delivery bottlenecks.
Coffee importers in some of the largest customer countries are currently replenishing their stocks and bringing orders up to a month earlier. You want to avoid bottlenecks if the global supply chains are interrupted by corona virus locks.
For the case of falls
“We had inquiries from buyers from all major countries USA, Japan or Germany“said the boss of a major Brazilian coffee exporter on Monday Reuters. All large roasters wanted to have their beans in the warehouse as quickly as possible, “just in case.”
And the problem of limited freight capacities is likely to worsen when the harvest season begins at the end of April, explains Santosh Brivio, Economist at the Migros Bank. For Brazil the greatest harvest of all time is forecast. There are already discussions about possible delays in loading goods into Brazil Ports.
Labor shortage
And not just possible ones Delivery bottlenecks prepare the industry to worry. The producers were also concerned about the upcoming harvest season, explained Brivio. Because the restrictions associated with the pandemic could lead to a labor shortage.
For example, in Colombia Coffee farmers are exempt from the prescribed quarantine measures. However, it is extremely difficult to accommodate and deploy around 150,000 workers in compliance with the prescribed hygiene standards.
In addition, coffee consumption is unlikely to decrease. Peter Harf, Chairman of the Board of Directors of JAB-Holding, who is behind coffee brands like Jacobs recently said: “People are sitting at home because of Corona, bored and drinking coffee“.
Harvest and logistics
How the coffee prices will actually continue will depend on how strong they are Corona crisis Harvest and logistics impaired. The forecast of the Commerzbank according to the analyst Michaela Helbing-Kuhl for the Arabica so far at 115 US cents per pound at the end of the year. But one is currently revising this estimate. “The risks are currently on the upper side,” said Helbing-Kuhl.
economist Brivio added: “Limited freight capacities in the face of impending shortage of harvest workers – the environment should remain supportive for the coffee price.” Ultimately – according to industry experts – that much is clear – the markets are likely to remain volatile as long as the corona virus keeps the world in suspense.
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