Kicking off the day with caffeine is non-negotiable for a good majority of the world’s population. But as stockpiles in Brazil – the largest global producer of coffee beans – nosedives towards a record low, and the threat of a full-blown coffee shortage looms large, everyday punters may soon have to pay a premium for the privilege amidst the backdrop of already untenable inflation (or simply doing without).
According to National Coffee Council President, Silas Brasileiro, Brazil’s all-important inventories may dip to seven million bags by March 2023. For reference, a more comfortable level is somewhere between nine million bags and 12 million bags (each weighing 60 kilograms). Additionally, arabica stockpiles held in in port warehouses monitored by the ICE Futures US exchange have officially hit its lowest level in 23 years.
This latest misfortune essentially comes down to extreme weather conditions. In 2021, the growing season was informed by wild fires and a deep frost, which both impacted coffee plants. And based on the current forecast, Mother Nature does not intend to let up.
“The atmospheric phenomenon La Nina is wreaking havoc climate conditions,” writes Tori Latham of Robb Report.
“Brazil is expected to get more dryness, while Colombia – the second-largest coffee producer globally – is going to get too much rain.”
“The coffee-producing nations of Guatemala, Honduras, Nicaragua and Vietnam also have poor outlooks ahead.”
“Even if we have a good crop next year, Brazil may just barely have enough to serve demand,” Nelson Carvalhaes, board member of exporters group Cecafe, explains to Bloomberg.
To make matters worse, demand for coffee across the board has only increased. Data provided by research firm hEDGEpoint Global Markets indicates consumption this season has grown by 1.5% this season after a 2% overall increase. In other words, it might be worth sourcing a few bags to keep in storage. Or getting in good with your local barista right before the projected coffee shortage.
Boy we really can’t catch a break lately, can we?