By Marvin G. Perez
(Bloomberg) --
Coffee trading has largely stalled with surging freight rates and prices pushing roasters to postpone purchases, hoping that producers will relent and lower prices. Growers are holding up for better prices amid surging labor and fertilizer costs.
“Freight rates to all destinations exploded, reaching unthinkable levels,” said Flavio Ribeiro from broker Flavour Coffee in Rio de Janeiro
“Exporters and trading houses keep focusing on solving delayed issues rather than making new contracts” resulting in low volume traded
NOTE: An indicator for Brazilian arabica prices nearly doubled this year after crops were damaged by drought and frosts amid a weaker local currency
Robusta prices also surged 93% because the arabica shortfall propelled demand for the cheaper beans
Robusta buyers have withdrawn from the Brazilian markets, said Judy Ganes, the president of J. Ganes Consulting, who is touring nation’s key growing regions
That’s aimed at forcing lower prices from producers, who are sticking to their guns, hoping to get more money that will help them cover rising expenses, Ganes says
Pandemic has disrupted labor procurement, and better prices for most crops have opened up opportunities for workers across the fields, creating labor shortages for coffee
Surging fertilizer prices there also may affect future crops, as crop nutrients are mostly imported, and weak local currency makes it more expensive to buy
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