This is due to the high prices of commodities, which have a problem to accept the retail. Reuters informed about it.
At the annual meeting of the American Coffee Association this week in Houston, its members said they were shocked by the rise in the awards of term Arabica coffee shops on the ICE commodity exchange, which increased by 70 %since November. “By March we have our production usually sold out this year. However, we now have less than 30 % sold from it“said Renan Chueiri, head of Elcafe Ca in Ecuador, producing instant coffee.
Lower production in key cultivation regions, especially in Brazil, has signed a sharp rise in coffee prices. “Nobody now wants to shop with a delivery at a later date. Currently, everything takes place from the system from hand to mouth“said one of the traders who did not want to be named. The” hand to mouth “system means that only the amount of coffee that traders need is purchased.
However, a recent Reuters survey indicated that the price of Arabica coffee could fall by 30 %by the end of the year. The current prices limit demand and, moreover, it turns out that Brazil could record a high crop next year. In addition, prices have led to expanding the area of coffee plantations. The areas have increased in Brazil, but also in India, Uganda and Ethiopia. However, as long as prices fall, many coffee traders will experience difficult times.
The head of one of the large roasters in the United States, which are the largest coffee consumers in the world, said some of his clients are not sure whether they will last in the business. The shops disagreed with the prices demanded by the roasters. Negotiations were prolonged and eventually began to pay for shops when some of them started to miss coffee on the shelves.
