2 Points on ECF Stock Rise

Given the #EuropeanCoffeeFederation (#ECF)'s recent issuance of the stock report, I wanted to review the numbers and see what we can glean. The most interesting thing is that the numbers confirm what I had been hearing anecdotally, that stocks are quite high in Europe (or were, the latest data point is December).

However, some context here is warranted.

My understanding is that the ECF had trouble collecting the data because stock owners did not want to report their stocks because the ports made it obvious who owned the stock. The various trade houses did not want their stock positions public.

After a period of time it seems a compromise was reached in that stocks are now reported, but not listed by port. Instead they now list qualities (#Arabica vs #Robusta).

However, the new reported stock number for Jan 2020 did not match the old number reported, it was significantly higher. So I'd assume that there are new entities reporting now that were not reporting before.

In my second chart I have normalized this by applying the 2020 % changes to the old number for Jan 2020. Assuming that the % changes were similar, this shows how much the stocks grew in proportion to how they reported before.

Two takeaways from what I found:

1) #Arabica #Naturals were the big winner in 2020, rising 28% vs washed's 2% and #Robusta's 12%.

2) Stock rose significantly, and counter to #seasonality - typically stocks decline in the second half of the year, but instead they flattened and even rose a bit.

Stocks are one half of the all important #Supply and #Demand equation so they are something that I pay close attention to.

I believe that these high stock numbers indicate a key piece of the puzzle as to why prices have only risen modestly in relation to the #Brazildrought. Many European #tradehouses and #roasters must have observed the high stock levels and not felt particularly pressure in the short term.