DEC. 17, 2021 (SpillingTheBeans)–Green coffee stocks in the key import markets of Europe, the United States and Japan remain under pressure from the recent 10-year-highs in arabica futures. Prices have rallied since late July when it became evident the world faces a major supply deficit next year because of widespread losses in the largest grower Brazil following a string of weather disasters both for the now completed 2021 harvest and the next 2022 crop.
Data compiled by SpillingTheBeans in this exclusive report shows total stocks in the three markets have fallen by a stunning 3.628 million bags in the last 14-15 month-period between Sep 30-Nov 30, 2021 – where stocks were down by 2.122 mln bags in Europe, 295,000 bags in Japan and 1.211 million bags in the U.S. to a combined figure of 21.858 mln bags – and marking a drop of 14.2% from total green coffee stocks of 25.486 million bags held in importing ports in these three markets between Jul 31-Aug 31 of 2020. Figures are as follows;
–U.S. green coffee stocks fell 2.2% to 5.843,721 bags by Nov. 30th, down 132,386 bags from stocks of 5,976,107 on Oct. 30th and down 3% from stocks of 6,022,923 on Sep. 30th. Year-on-Year figures were not available. Stocks have gradually been falling from last year’s high of 7,054,349 bags by the end of July, 2020, with Nov end-stock numbers down 17.2 percent from Jul. 31, 2020.
–Japan green coffee stocks to Sep. 30th down 5.9% to 2,693 million 60-kg bags from year-ago, and down 9.9% in a 14-month low from 2.988 mln bags July 31 last year.
–European green coffee stocks down 11.6% on year to 13.322 million 60-kg bags by Oct 31 and near 19-month low for European stocks of 12.937 mln bags registered by Mar 31, 2020.
–This is down 1.755 million bags from 15.076 mln bags a year ago, according to figures in the European Coffee Federation’s latest report, and down by 2.122 mln bags – or 13.7% – from the 2020-high of 15.444 mln bags seen by Aug 31 last year.
–In related news, ICE certified stocks fall to 1,554,138 bags Dec.16th, down from 2,161,675 bags on Sep. 8th and follows relatively stable ICE stocks at between 1.6 million-1.606 million bags in the last few weeks. Certified stocks are by default included in total U.S. and European figures.
(For more details, all sources and background please see the story here below)
*This report was first published in STiR Coffee and Tea magazine last September, stock figures will be updated as regularly as possible
Global Coffee Stocks Hit Fresh Lows In Key Importing Markets
By Maja Wallengren
SEP. 15, 2021 (STiR/SpillingTheBeans)–Green coffee stocks in the key import markets of Europe, the United States, and Japan remain under pressure from the recent 7-year-highs in arabica futures prices and supply problems that continue to escalate across the world’s producing countries and causing inventories in most ports to come down, industry analysts and traders said.
This comes as the coffee manufacturing sector struggles not only with the multiple challenges to production in origin but also as an ongoing freight and shipping crisis causes severe container shortage which delays already backlogged exports. The lower stocks will add already intense pressure on the market for the next several years, analysts said.
In Japan, the top Asian consuming market, coffee stocks continue falling and reached fresh 9-year-lows by the end of July, with total stocks of 2.743 million 60-kilogram bags of green coffee held in Japanese ports, according to data by the All Japan Coffee Association. This was down from 2.793 million bags by the end of June this year, and down 8.2% by 244,517 bags from total stocks of 2.988 million bags held in Japanese ports a year ago by July 31, 2020. The figures also reveal that green coffee stocks continue to fall in Japan for 16 consecutive months and the figure for July 31 marked the lowest volume held since July 2012, the AJCA statistics revealed.
“There is no foreseeable alleviation to the international squeeze on global supply chains,” said South Africa-based veteran coffee traders I&M Smith in a Sept. 8 market report, adding that certified washed arabica stocks at the ICE futures exchange in New York were down 1,131 bags to 2,161,675 bags on Sep. 8th, while certified robusta stocks held against the LIFFE exchange in London by Sept 6 were down 19,500 bags to 2,281,833 bags.
In the wake of the 2001-2003 coffee crisis when arabica prices fell to historic lows certified ICE stocks rose to about 6 million bags but these figures have fallen significantly since, first to 5-year-lows at 1,272,988 bags on Nov 3, 2016, and later to 20-year-lows at 1.1 million bags in September 2020, exchange data confirmed.
General market consensus agrees the world supply-demand balance is expected to be in deficit entering the new international 2021-22 crop cycle starting next Oct. 1st. The US Department of Agriculture (USDA) said in its latest “World Markets and Trade” coffee market report released in June that stocks in the markets of Europe, US, and Japan would fall 13.1% to 22.072 million bags by the end of the 2021-22 cycle from ending stocks seen closing at 25.387 million bags by Sep. 30 this year. This forecast, however, came before the most damaging frosts in over 40 years hit an estimated 65% of the producing area in Brazil, the world’s largest grower and exporter. Frost damage is now already projected to cause significant losses to the 2022 harvest in Brazil, on top of the current harvest is coming in below expectations, according to most analysts and exporters.
European green coffee stocks fell to 14.442 million bags by June 30 from 14.553 million bags the month before, but were slightly up from 14.624 million bags by the end of June last year, said the European Coffee Federation in its most recent trade report. Even if a number of 14 million bags may sound high to some, this only just covers one month of total world consumption which is pegged to reach between 168-170 million bags in 2022, according to USDA, International Coffee Organization (ICO), and private analysts.
The US Green Coffee Association (GCA) meanwhile said total stocks in US port warehouses increased by 294,885 bags in the month of July to reach 6,074,346 bags by July 31, representing the largest rise month-on-month since May 2020, but overall stocks were down 13.9% compared to total green coffee stocks of 7,054,349 bags by the end of July last year.
“Consumption is a great mystery,” said one trader in the New York physicals market, adding that because of Covid-19 restrictions it would appear “that there is less consumption, yet we drew down GCA stocks during a supposed surplus” period when stocks in cycles with a big Brazil crop rise across the world’s ports and warehouses.
Coffee stocks are defined as surplus inventory held in officially certified or private port warehouses which are freely available to buyers. Stock figures do not include coffee held in warehouses already committed in commercial contracts and awaiting shipping or transportation to the buyer’s final destination.
Maja Wallengren, author and owner of SpillingTheBeans, specializes writing about coffee for more than 27 years from over 60 coffee producing countries across Southeast Asia, Africa, the Caribbean, and Latin America.
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