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Coffee shipments are diverted away from the Black Sea causing major shortage in Russia and Ukraine

Coffee shipments are diverted away from the Black Sea causing major shortage in Russia and Ukraine

May 12 - 2022

Coffee Geography Magazine


Russia as among the five largest coffee importers in the world is experiencing sky-rocketed coffee prices as the commodity price surged more than 20% in the country with an estimate demand reduction of around 1.3 million 60-kg bags due to the ongoing war in Ukraine. Food import is not part of the sanctions imposed on Russia after its invasion of Ukraine but concerns about the safety of ships in the Black Sea have cut shipments of coffee and other goods and difficulties in processing payments is becoming a headache without the SWIFT banking system .

Black Sea

CGM interviewed traders and brokers about the coffee market in the region and some expressed their opinions anonymously that they are mostly diverting the shipments that were initially expected to go to Russia and some have stopped selling to that market on Black Sea. Russians have been hoarding food including coffee since the start of the war with Ukraine due to fears that supply would be run out of their supermarkets. The demand for coffee may reach around 1.8 million bags according to Marex , European food trader.

Seeing this opportunity, some traders from Brazil are taking the risk and supply Russia with small amount by avoiding the Black Sea. CGM is finding reports from European traders that there are deals that are going on using Crypto and in some cases, coffee farmers were closing a barter deal with a Russian dealer, where coffee would be swapped for fertilizer. However most of the coffee shipments from Central and South America are redirected to the port of New York which were bound for Russia to avoid trade repercussions with other countries.