By Marcelo Teixeira

BOSTON (Reuters). – Coffee traders divert shipments from Brazil to Russia and many have stopped selling to Russia entirely, said attendees at a U.S. café conference.

Even though food trade was not affected by the sanctions placed on Russia following its invasion of Ukraine in 2014, problems in payment processing from Russian importers as well as concerns over the safety of Black Sea ships have reduced shipments to Ukraine of coffee and other products.

Russia, which calls its actions in Ukraine a “special operation,” is among the five largest coffee importers in the world. Russia’s consumers are saving food in fear of running out.

According to broker HedgePoint, coffee prices rose more than 20% last week in Russia because of higher cost. According to HedgePoint, the current war in Ukraine could lead to a drop in demand of about 1.3 million 60-kg bags.

Marex, a European food trader, sees a higher hit to coffee demand at around 1.8million bags.

Olvin Lopez (commercial manager, Inloher, a Honduran coffee exporter) said that his partner, Sucden the French food trader, had given him instructions to redirect the coffee shipment from Honduras headed for Russia to New York.

Lopez stated that although they didn’t give any reason for the rerouting of cargo, it was likely due to logistic problems. Lopez spoke on the sidelines at the SCA Coffee Expo Boston.

An international coffee dealer worked for a trader who requested anonymity. He said that ECOM, a soft commodity trader, had made the decision to stop doing business with Russia during wartime.

ECOM and Sucden did not respond to requests for comment.

However, another trader stated that Russia continues to be supplied with coffee by some countries, including Brazil, the top-grower.

He said that although people don’t want to speak out, there were deals being made using crypto. A trader stated that a coffee company was also in talks with Russian dealers to make a barter arrangement, which would see coffee being exchanged for fertilizer.