Many of the world’s largest coffee traders are beginning to brace for supply chain disruptions. As the coronavirus pandemic continues to change the world, access to ports and other transport options are being put on hold, throwing the future of coffee accessibility into question. Logistical holdups are expected to become more regular and widespread throughout major producing companies, and large traders are encouraging their buyers to place order as soon as possible to ensure their beans are received on time.
In most countries, whether they produce coffee, truck, rail, and container deliveries have either been put on hold or have become subject to greater security measures. Just a few months into the global near-lockdown, sellers and buyers are already seeing significant delays. This will only increase as time wears on.
In mid-March, coffee futures jumped significantly, by 11 percent, after reports that stevedores in Brazil would strike indefinitely. Prices have since stabilized, but they are still higher than usual. While services in warehouses and offices across the country are not likely to change much, shipment delays are to be expected. Most major coffee providers are drafting contingency plans, and employees are working from home wherever possible.
These supply-chain disruptions come amidst a strong retail coffee demand. People around the world are beginning to stock up on shelf-stable products, and coffee is one of the most sought-after options. Soaring premiums in the markets are beginning to deter traders from delivering to the exchange where there is little, if any, markup. Put simply, people are currently willing to pay a lot for a bag of coffee, which means consumer prices are likely to rise significantly in the coming months.