How Are Shipping Problems Affecting Coffee Production in World Markets?
Coffee futures are still trading at high levels, with Robusta breaking through $4,000 per ton at the end of May and holding there. Three forces are pushing costs up at once: Vietnam's first-half exports fell 10.5% after heat and drought cut output, Brazil's June harvest came in below expectations, and shipping disruption across Asia has added heavy freight costs to every container.
The logistics side is the sharpest squeeze. Freight rates from Asia to Europe jumped from about $1,200 to nearly $7,000, ports in Singapore and elsewhere in Asia report congestion that may run into August, and empty containers are scarce. Maersk warned that Red Sea disruptions will continue into the third quarter, so the major coffee producing countries and their buyers still face elevated costs.
Coffee futures prices continue to run at high levels, with Robusta breaking through $4,000/ton at the end of May and maintaining that level to this day, squeezed by the simultaneous production cuts of the world's three major producing countries and the shipping crisis. Vietnam's exports fell 10.5% in the first half of the year, Brazil's harvest season underperformed expectations, and congestion at multiple Asian ports, a shortage of empty containers, and frequent Red Sea attacks have made coffee trade even worse. Freight rates from Asia to Europe soared from $1,200 to nearly $7,000, and Maersk warned that Red Sea disruptions will continue into the third quarter. This article will examine how production, logistics, and geopolitical risks are jointly driving up coffee costs, and follow Front Street Coffee's ongoing tracking of industry developments.
Although coffee futures prices have fluctuated recently, they are still hovering at high levels overall, with Robusta especially prominent, having surged to $4,000/ton at the end of May and remained there ever since.
The driving force behind this is simultaneous production declines in the world's top three coffee-producing countries. Vietnam's data for the first half of the year released earlier showed that extreme heat and drought caused output to fall, with export volumes dropping 10.5%.
Brazil was also affected by high temperatures and drought. Although earlier reports predicted that Brazil's production would trend upward, after the harvest season officially began in June, the actual performance of the producing regions was less than ideal, with real output below market expectations.
At the same time, a bigger problem is emerging—shipping issues. Reports indicate that multiple Asian trade ports are facing multiple pressures, including tight capacity, congestion, a shortage of empty containers, and the Red Sea crisis, and shipping prices have already approached pandemic-era levels.
Several busy ports in Asia have reported congestion, which may continue into August. Among them, Singapore, a transshipment hub, has been particularly severely congested in recent weeks, with container waiting times for berths extended from less than a day to two to three days.
Shipping consultancy Linerlytica pointed out that due to congestion at Singapore, vessels have turned to neighboring ports instead, shifting cargo volumes to transshipment ports such as Port Klang and Port of Tanjung Pelepas in Malaysia, which in turn has led to chain congestion at multiple Asian ports.
In addition, the Red Sea crisis shows no sign of cooling down at all. According to statistics, the number of attacks on ships by Yemen's Houthi armed forces in June hit the highest record this year.
In early May, the Houthis issued a new statement further expanding the scope of their attacks to cover areas including the Red Sea, the Arabian Sea, the Indian Ocean, and the Mediterranean, targeting all ships of companies that had transactions with Israel over the past few months, regardless of flag or destination port.
According to data released by navies operating in the region, there were 16 confirmed ship attacks in June, the highest single-month total since 2024 and the second-highest single-month total since the attacks began, second only to December 2023.
For the coffee trade, shipping is the main mode of transport, and the Red Sea is an important Europe-Asia route, directly affecting exports from some coffee-producing countries. According to Xeneta data, freight rates from Asia to Europe have soared from $1,200 to nearly $7,000, and rising freight rates will also keep coffee transaction prices at high levels.
Shipping giant Maersk said that the coming months will be full of challenges for shipping companies and businesses, and that disruptions to container shipping through the Red Sea will continue into the third quarter of this year. Maersk's CEO emphasized that Maersk will only return to the Red Sea route once the safety of seafarers, ships, and cargo is guaranteed.
The above content is compiled by CoffeeHunters, a coffee news website.
