Supply Chain Research

Global coffee exports fell for the sixth month out of the past seven in March, Panjiva analysis of ICO data shows, with a 1.9% decline on a year earlier. While exports in the first quarter were 3.4% higher that was due to a particularly weak January the year earlier.

A continued decline in exports from Brazil and Indonesia were the main culprits, with shipments from Vietnam not quite providing an offset. Notably shipments from India fell 4.8%, the first decline since June, though that likely reflects growing conditions rather than the effect of export subsidies outlined in Panjiva research of April 30.

Chart segments global coffee exports by origin. Bubble size indicates shipments in the past 12 months. Calculations include ICO data. Source: Panjiva

Yet, the decline in exports has not had a significant effect on prices. Global coffee prices have actually fallen 2.7% since the start of the year and by 7.9% on a year earlier as at April 30, S&P Global Market Intelligence data shows.

Chart shows coffee price in $ per pound traded on ICE. Calculations include S&P Global Market Intelligence data. Source: Panjiva

Among the customers for Brazilian customers those in the U.S. have borne the brunt of reduced shipments, with exports down 12.0% on a year earlier in the first quarter of 2018, Panjiva data shows. That’s largely been due to increased shipments to Japan (up 11.4%) while in Europe Italy (up 9.4%) has attracted volumes away from Germany (7.6%) lower.

Chart segments Brazilian coffee exports by destination market. Source: Panjiva

Major U.S. buyers of Brazilian coffee that will have had to find alternative sources in the first quarter include JM Smucker’s Folgers (22.0% of imports), Starbucks (21.5%) and Rothfos (6%).

Chart segments Brazilian coffee exports to the U.S. by consignee and product (HS-2, 09 = raw coffee, 21 = coffee products). Source: Panjiva