The World Has More Coffee Than Ever, and the Warehouse Has Almost None

The World Has More Coffee Than Ever, and the Warehouse Has Almost None

Record crops, and the pile of graded beans that actually moves coffee's price has fallen by more than two thirds in a year.

Rhee Sung-ho

Stacked burlap sacks of green coffee on wooden pallets in a dim storeroom, no people and no company branding in frame, for the piece on certified stock at the exchange

Photo Diego Catto / Unsplash

The world has never had more coffee, and the pile of graded beans that moves its price is down more than two thirds in a year.

Certified stock is arabica in approved warehouses, ready to settle a futures contract. ICE counted 229,214 bags on August 19, against 736,573 a year before.

The crop is fine. USDA has world production at a record 189.7 million bags.
The squeeze is narrow: one preparation of one species, in the right warehouse, on the right day. In June the ICO had arabica stock down 13.3 percent, robusta up.
US ground coffee was $9.32 a pound in July, easing but up 10.7 percent on the year.
Big roasters look to be still booking beans bought high, so the shelf moves late.

Watch the warehouse, not the harvest.

Not investment advice. I hold no position in coffee futures or any company named.