Coffee price instability & what KAVAZ BRAZIL can do for you
Coffee prices have significantly increased, as we can see the instability of the C-Market, which affects both current production and futures. This inconsistency poses a challenge for producers, exporters, and consumers.
In Brazil, one of the main factors contributing to this situation is adverse weather conditions. The lack of rainfall in producing regions is well known, but what makes it worse is that near the end of 2024, there was an occurrence of criminal fires on sugar cane plantations on a colossal scale. Those fires were very close to coffee areas, which harmed coffee production even more, reducing supply and increasing prices again. Those occurrences impact the current harvest and compromise the quality and quantity of future harvests.
Although low rainfall harms production in general, intense heat can favor the maturation of beans, accelerating the production process. However, this has led to an increase in the harvest of dry cherries in the harvest and smaller bean sizes, as we could see in the production of 2024. The coffee beans in the screen of 17/18 became gold in Brazil. This change in the production standards also influenced the prices, creating opportunities but primarily significant challenges for the sector.
On the other hand, the price increase is advantageous for the coffee growers at first, ensuring greater profitability while the market remains above 300 cents/pound. With that, they can recover the losses from previous harvests, which also suffered from extreme heat and extreme cold with frosts, when many lost most of their production.
What does KAVAZ BRAZIL offer?
We offer an opportunity for roasters to pay the least possible. Obviously, for the coffees already in our warehouse in Europe, the price is high because we not only had to pay in advance, but we also had to finance it, so all costs are included + our profit, while the cash is “stuck in stock”. Therefore, for every roaster who can afford to pay any amount while the coffee is still in Brazil or afloat – and wait (an average of 1-2 months) to receive the order, we sell at our cost price. That means it’s charged the FOB price + shipping and customs. Upon the container’s arrival in Slovakia, we will dispatch the pre-orders on the same day. That’s mutually beneficial, reducing our cash constraints and increasing our working capital. Meanwhile, for the roaster, the price difference can be huge.
