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Container shortage delays shipments of Brazil’s record coffee crop

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Coffee traders are struggling to ship cargos out of Brazilian ports because of a shortage of available containers or space in vessels to hold them, according to traders and analysts.

Brazil’s economy is suffering due to the coronavirus pandemic, causing a 40% slide in its currency, the real. That spurred a flood of exports of now-cheaper goods, but imports have dropped sharply, causing the imbalance in containers that has led to delays.

That’s a direct hit to Brazil, which with 30% of global coffee trade is the world’s largest exporter of the commodity.

According to shipping industry consultancy Datamar, there was an imbalance of nearly 80,000 boxes in Brazil in August, with around 251,000 containers leaving the country and only 172,000 arriving. By contrast, in January, 216,000 boxes arrived and 201,000 left.

Global shipping companies such as MSC and Maersk are fully booked for weeks to months in Brazil. Merchants say it is not feasible to currently export Brazilian coffee for prompt shipment, and what is possible can only be done at a higher cost.

“I sold coffee to a client in Spain and I’m still waiting for MSC to make containers available for the shipment,” said Nelson Salvaterra, a partner at Brazilian coffee exporter Coffee Selection.

MSC’s press office did not confirm that specific problem, and declined to comment further. Maersk said it was working to improve container availability.

“It is clear that the coffee sector is entering into the peak season. It is highly important that producers provide the proper visibility on when to move stocks in advance,” said Julian Thomas, general manager for Maersk East Coast South America.

He added that there is no more room for shipments in October.

Coffee, unlike other soft commodities like sugar, is shipped via containers rather than in dry bulk vessels.

Christian Wolthers, a partner at U.S.-based coffee importer Wolthers Douque, said he managed to find containers for a shipment out of Brazil, but there was no space in the ship and his merchandise was left at the port to be loaded onto another vessel.

Brazil’s trade surplus jumped to $6.16 billion in September, 38% more than a year earlier, due to the weak real. In recent months, Brazilian farmers rushed to sell their crops, boosting exports, as the weak currency means they receive more reais in dollar-denominated trade.

Foreign coffee sales that were planned ahead of time are being processed without much trouble, traders said. However, they said that some cargoes from Brazil may take longer to arrive, meaning global coffee merchants may need to substitute supply from other country. 

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