Coffee Stocks Hit 27 Year Low What It Means For You

Summary

An analysis of why ICE certified Arabica coffee stocks have reached their lowest levels since 1999, despite projections of a record harvest in Brazil.

Highlights

The 27-Year Low00:00:00

ICE certified Arabica coffee stocks have dropped to 223,976 bags, the lowest level since 1999. This supply shortage exists despite Brazil being on track for a record-breaking harvest of over 71 million bags.

The Supply Chain Disconnect00:01:23

The disparity between projected harvest numbers and actual market supply is caused by logistical issues. Brazil's harvest is behind schedule, and with warehouses nearing capacity, farmers are holding onto beans instead of shipping them, leaving the market without a reliable buffer.

The Impact of Certified Stocks00:02:02

Certified stocks are critical because they represent coffee that is already graded and ready for physical delivery against futures contracts. Since markets trade based on immediate available supply rather than future promises, a record crop in the fields does not mitigate the current scarcity of deliverable, usable coffee.