By Marvin G. Perez
(Bloomberg) --
War will probably cut demand in Russia, Ukraine, and possibly a bit in surrounding countries, including Poland, says Albert Scalla, senior vice president of for StoneX Financial.
Prior to invasion, company projected deficit of 400k-600k bags in 2021-22, with production at 163m-164m bags of 60 kgs each
Russia consumes about 4m bags of coffee a year, Ukraine 1.25m and neighboring countries close to 5m bags, he says during event organized by the National Coffee Association
Russia will probably run through its stockpiles because it can’t pay to buy supplies following U.S. and European sanctions on financial firms
Coffee volatility will pick up next three months with La Nina still lingering amid the fertilizer crisis, with key producers Russia and China cutting supplies
While surging inflation typically benefits commodities, expected higher interest rates will lift dollar, which is bearish, while an end to the war could spur a plunge in commodities
“There’s extreme fear because of all the uncertainties”
“Funds are going to play the fertilizer story” and that will affect agricultural commodities
Brazil and Colombia, top arabica growers, import about three quarters of their fertilizer, with a big chunk from Russia
Brazilian growers may have enough fertilizer for only three months
Weather conditions and input application will be crucial for branch development and flowering by October for country’s 2023-24 prospects
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