Luke 1:37 – “For with Yahweh nothing shall be impossible”
Could Coffee Be A Thing Of The Past
Could coffee be a thing of the past? How much are you willing to pay for a cup of coffee?
The world’s top arabica producer, Brazil, is headed for record low inventory, highlights tighter global supplies and robust demand should continue boosting prices.
Adverse weather conditions in the country’s top growing regions, is the main reason the supply is down.
Silas Brasileiro, president of the National Coffee Council said inventories in the South American country could decline to just 7 million bags (each weighing 60 kilograms) by the end of 1Q23. Brazil usually has 9-12 million bags in inventory.
There is a global supply deficit of arabica coffee beans, which has materialized over the last few years.
Tight global supplies have doubled arabica coffee futures in New York since 2020. Prices have traded in a lateral pattern for most of 2022 between $2-$2.5 per pound.
With the demand being so great, prices would continue increasing on Brazilian supply.
Conclusion
Come next year, Brazil may just barely have enough to serve demand.
Yields are expected to decline in Guatemala, Honduras, and Nicaragua, while Vietnam, the largest robusta supplier, will also see stockpiles tumble because of poor harvest.
Given the worsening global supply situation, there’s no immediate relief as higher demand indicates arabica prices should move higher.
Ultimately, coffee drinkers will pay more.
Central bankers believe they can solve food inflation and overall inflation by crushing demand through higher interest rates.
Coffee will be available as far as we know. But it will come, at a cost!
Might be a good idea to stock up on some while it is available. Buy now, save later 🙂
DISCLAIMER: I am not a financial adviser. This site is for educational purposes only. It is imperative that you do your own research. I am sharing my opinion from personal research and experience with no guarantee of gains or losses on investments, finance etc.
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