China’s coffee consumption big enough to shake international trade

China’s imports of Brazilian beef skyrocketed due to changes in consumption habits and a firm loss in pork production. Coffee, in turn, is on the verge of treading the same path, competing for space with traditional Asian tea, in a growing trend that could quickly shake the balance of world supply and demand.

What the Asian country consumes causes an earthquake in prices that almost always appreciate, given that the volumes needed to satisfy the giant are enormous. The same goes for soybeans.

In the case of beef, a rising middle class shifted the country’s appetite for different kinds of meat, and soon enough, growing cases of African Swine Fever (ASF) helped reduce the supply of pork, which put the nation at the top of Brazilian exports.

The advantage for Brazil in selling coffee to China is that, as opposed to beef and soybeans, the country is the largest supplier to places like the United States, Europe, and Japan, which diminishes single-customer dependency.

In addition to being a considerable counterbalance, both when China is absent from the market and when pressing for lower prices, so many demand channels should be a bullish factor.

See below the volume of Brazil’s exports of coffee (hs 0900, 0901) to China between Jan 2019 and Nov 2022. The data is from DataLiner.

Brazilian coffee exports to China | Jan 2019 – Nov 2022| WTMT

Source: DataLiner (click here to request a demo)

The Chinese are expected to have bought 414.8 thousand coffee bags in 2022, placing them 20th on the list of importers.

In 2021, there were 333.6 thousand bags, while in 2020 just over 202 thousand bags.

Also based on data that the Cecafé industry association gathered from the government, Brazil exported a total of 39.3 million 60-kilogram bags last year.

Source: Money Times

To read the original reporting, visit: https://www.moneytimes.com.br/em-algum-lugar-do-futuro-numeros-mostram-que-a-china-abalar-o-mercado-do-cafe-como-fez-com-a-carne/

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