Coffee reserves plunge to lowest in more than two decades
According to dwindling reserves, the era of expensive coffee is not about to end anytime soon.
Stockpiles of premium arabica beans, a favourite of artisan coffee shops and chains such as Starbucks Corp., totalled 1.078 million bags, or about 143 million pounds, according to ICE Futures US data released Monday. This is the lowest level since February 2000 for inventories monitored by the New York exchange.
Since September, ICE-certified coffee reserves have been declining due to rising shipping costs and unfavourable weather in Brazil, the world’s largest grower and exporter.
Inventory shrinkage is a concern because countries rely on them when they cannot obtain enough product from abroad. This is a sign that demand is outpacing supply and is a prerequisite for rising prices. Coffee prices have already reached multiyear highs at a time of global food inflation.