World trade in coffee has plummeted to a minimum due to record high prices. Arabica futures on the ICE exchange jumped 70%, surprising market participants, informs Reuters.
The general director of the Ecuadorian company Elcafe Renan Chueri noted that for the first time his company could not realize the planned volume of goods until March.
“Usually we sell everything by this time, but so far we have sold less than 30% of the products. The significant increase in prices is eating into the cash flow of customers, they don’t have enough money to buy what they need”, – Chuieri explained.
Due to rising costs, buyers try to avoid stockpiling and limit themselves to only the necessary volumes. The main reason for the sharp price increase was the reduction of coffee production in key regions, particularly in Brazil.
It is expected that the price of Arabica could fall by 30% by the end of the year due to a forecast good harvest and reduced demand. However, the situation on the market remains difficult at the moment. Some American sellers openly declare that they will not be able to continue business at current prices. Supermarkets and grocery stores are reluctant to buy expensive coffee, which leads to a shortage of the product on the shelves.
