Bitter coffee: strong price increases expected due to logistical problems

Shipping bottlenecks created by the virus pandemic have disrupted global supply chains. There is currently an imbalance between shipping containers around the world which has resulted in high transportation costs. The latest industry to complain about the sharp rise in shipping prices is US coffee roasters who are warning of a possible increase in retail prices, according to Reuters.

Coffee processors of all sizes are alarmed by rising transportation costs. Small and medium-sized roasters may be particularly affected, but large arches won't be exempt from increases either.

“There are supply constraints, not due to production, but simply obstacles created by COVID-19 and safety guidelines. This is a systemic issue, ”said Jorge Cuevas, executive at Sustainable Harvest Coffee Importers in Portland, Oregon.

“It is now more expensive than in the last five or ten years to bring coffee to the consumer,” Cuevas said.

The import-export companies of the perfumed seed blame the lack of containers, a problem that had begun to appear since last September and which has also affected trade with China. Unfortunately, the growing imbalance of trade balance precisely with Beijing by various countries means that containers are almost monopolized on those routes, thus making it more difficult and expensive to rent even raw materials such as coffee.

"Container cost is a major problem in the coffee market," said Rabobank analyst Carlos Mera. He said routes from Southeast Asia to Europe and the United States are experiencing higher shipping costs due to the shortage.

"Even if you are willing to pay, you may not find availability," Mera warned.

Commodities such as coffee, cocoa, cotton, and refined sugar are generally shipped via containers, while corn, beans, and raw sugar are transported in ships carrying in bulk. The moisture sensitivity of the product plays an important role.

Several companies are complaining not so much about an increase in costs, but a strong delay in deliveries, very often even a few months. Will this cause a further increase in prices linked to the scarcity of supply? In addition, all fixed-term contracts and production schedules are skipped.

S&P Global Platts said shipping inflation hit many US economic sectors in the fourth quarter, adding nearly $ 10 billion to business costs. With shipping rates continuing to rise and the container shortage still unresolved, it is only a matter of time that not only retail coffee prices will rise, but many other goods imported from abroad will also rise. A little bit of imported inflation in the West that was not felt the need

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The article Bitter coffee: strong price increases expected due to logistical problems comes from .

This is a machine translation of a post published on Scenari Economici at the URL on Mon, 08 Mar 2021 07:00:49 +0000.