How the crisis in the Suez Canal could affect the price of your instant coffee

Name: Giant cargo ship causes marine traffic jam by blocking Egypt’s Suez Canal
Uploaded: 2021-03-26T07:52:02.000Z
Duration: 1 min 30 s
Description: Giant cargo ship causes marine traffic jam by blocking Egypt’s Suez Canal

The Ever Given container ship became jammed in the key trade route on Tuesday, blocking passage for ships hauling almost US$10 billion of goods through the Egyptian waterway

About 12 per cent of global trade goes through the Suez, and the waterway is more known for its role in energy markets than agricultural commodities such as coffee

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Ever Given, one of the world’s largest container ships, after running aground, in the Suez Canal. Photo: Reuters

Bloomberg

Published: 3:52pm, 26 Mar 2021Updated: 4:03pm, 26 Mar 2021

The crisis in the Suez Canal could soon hit your instant coffee.

The vessel blocking passage in one of the world’s most important maritime chokepoints isn’t just curbing shipments of crude oil and liquefied natural gas, but also containers of robusta coffee – the type used to make Nescafe. All of the beans from East Africa and Asia – which houses two of the world’s top robusta producers – flow to Europe via the Suez.

The massive container ship Ever Given became jammed in the key trade route on Tuesday, blocking passage for ships hauling almost US$10 billion of goods through the Egyptian waterway. Dislodging the 200,000-ton vessel could take days or even weeks, and a logjam of ships around the canal has already doubled.

“For traders, they are going to scramble to supply their clients in Europe,” said Jan Luhmann, founder of JL Coffee Consulting and a former head coffee buyer at Jacobs Douwe Egberts BV, one of the world’s largest coffee roasters. “Resolving this is going to take a few days if we are lucky, but even so, a lot of damage has already been done.”

About 12 per cent of global trade goes through the Suez, and the waterway is more known for its role in energy markets than agricultural commodities such as coffee. Still, only two major robusta coffee producers – Brazil and Ivory Coast – don’t use this key route to reach major consumers in Europe.

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Giant cargo ship causes marine traffic jam by blocking Egypt’s Suez Canal

Coffee roasters on the continent had already been struggling to get robusta coffee from Vietnam, the world’s largest producer, due to a shortage of shipping containers that has upended the global food trade. Just when the availability of boxes started improving, the canal blockage brought another headache.

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