Coffee importers are doing pretty well at keeping the US in lattes.
Sure, the country’s port warehouse stocks returned to shrinking last month – which might not be the best news for roasters given the setbacks to world supplies from both disappointing production, in the likes of Brazil, and rundown inventories, as in say Vietnam.
However, the US seems to be riding out the squeeze.
That time of year
US port warehouses remain decently full despite last month’s fall in US port inventories of 71,600 bags.
That decline in fact followed six successive month of inventory builds, meaning that even after the September shrinkage stocks remain up 545,000 bags for the calendar year, Green Coffee Association data show.
Besides, this time of year has a habit of being a drawdown month. US inventories have now shrunk in four out of the past five Septembers.
It helps that the US has had some success in getting hold of Brazilian supplies.
Even as Brazil’s coffee exports have eased by 3.9% so far in 2022, shipments to the US have risen, by 2.3% to 5.85m bags, according to Cecafe.
That has raised the US’s share of Brazilian coffee exports to 20.4%, up from 19.1% for the same period of last year.
The US is easily the biggest importing country of Brazilian coffee, ahead of Germany with a 17.7% share.
The Green Coffee Association data in fact tally with what the exchange inventory data, as reported daily, have been telling us – that the country is avoiding the drawdowns seen in some other countries.
While certified arabica stocks held in US warehouses are down by 11.0% so far this year, that is well below the 77% slump in inventories held in Europe.
It is the European drawdown which has driven the overall shrinkage in certified stocks of 74% this year to just under 398,000 bags, their lowest in 23 years.
Indeed, it is dealing with Europe which looks a bigger challenge to the market, and finding the dynamics to encourage an inventory rebuild.
For the US, the supply situation still looks fine – little wonder that arabica investors have been little phased by the return to a net drawdown, with New York futures trading on Tuesday not straying too far from unchanged.