Introduction
Supply chain disruptions continue to reshape global commodity trade. For cocoa and coffee traders, understanding these dynamics is essential for effective risk management and opportunity identification.
Current State of Global Shipping
Container Freight Rates
After the dramatic spikes of 2021-2022, container rates have normalized but remain above pre-pandemic levels:
- Asia-Europe: $2,800-3,200 per FEU
- Asia-US West Coast: $2,200-2,600 per FEU
- West Africa-Europe: $1,800-2,200 per FEU
Red Sea Disruptions
The ongoing security situation in the Red Sea continues to affect trade routes:
- Major carriers still diverting around Cape of Good Hope
- Additional 10-14 days transit time for Asia-Europe routes
- Limited direct impact on West Africa-Europe cocoa routes
- Some knock-on effects on vessel availability
Origin-Specific Challenges
West Africa (Cocoa)
The ports of Abidjan and San Pedro face recurring challenges:
- Congestion — Peak season arrivals strain capacity
- Infrastructure — Limited warehouse and handling capacity
- Trucking — Road conditions affect inland transport
- Documentation — Bureaucratic delays at customs
Brazil (Coffee)
Santos and Rio de Janeiro ports are key export hubs:
- Harvest season (May-September) creates seasonal pressure
- Investment in new terminals improving throughput
- Trucking strikes remain a periodic risk factor
Vietnam (Robusta)
Ho Chi Minh City port handling capacity has improved:
- New deep-water terminal reducing congestion
- Container availability generally adequate
- Inland logistics remain challenging during harvest peak
Warehouse and Storage Dynamics
European Warehouse Stocks
Key storage locations for cocoa:
| Location | Capacity | Current Utilization |
|---|---|---|
| Amsterdam | 450,000 MT | 72% |
| Antwerp | 380,000 MT | 68% |
| Hamburg | 220,000 MT | 75% |
US Coffee Stocks
Green coffee stocks at US ports:
- Total: 5.8 million bags
- Above 5-year average of 5.2 million bags
- Sufficient coverage for current demand
Technology and Visibility
Track and Trace Solutions
Modern supply chain visibility tools offer:
- Real-time container tracking
- Predictive ETA updates
- Exception alerts for delays
- Integration with trading systems
Blockchain Initiatives
Several industry initiatives aim to improve traceability:
- Farmer Connect — End-to-end coffee traceability
- Cocoa Trace — Origin verification for sustainable cocoa
- Adoption remains limited but growing
Risk Management Strategies
For Physical Traders
- Buffer inventory — Maintain safety stock at destination
- Multiple origins — Diversify sourcing to reduce concentration risk
- Freight hedging — Consider FFA (Forward Freight Agreements) for large exposures
- Insurance — Review coverage for delays and consequential losses
For Derivatives Traders
- Calendar spreads — Supply chain disruptions often manifest in spread moves
- Delivery dynamics — Understand exchange delivery logistics
- Basis risk — Physical disruptions can create basis volatility
Outlook for 2025
Expected Developments
- Gradual improvement in Red Sea situation (H2 2025)
- Continued investment in West African port infrastructure
- Growing adoption of digital documentation
- More sophisticated visibility tools
Persistent Risks
- Geopolitical uncertainty
- Climate-related disruptions (floods, droughts affecting inland transport)
- Labor actions at key ports
- Cyber threats to shipping and port operations
Trade Grounds Perspective
Supply chain competence is increasingly a competitive advantage in commodity trading. Firms that invest in:
- Strong origin relationships
- Logistics partnerships
- Technology infrastructure
- Risk management frameworks
Will be better positioned to navigate disruptions and capture opportunities.
For detailed logistics consulting services, contact the Trade Grounds advisory team.