STiR coffee and tea magazine

38 STiR coffee and tea | 2026 Quarter 2 Summer (Jun/July/Aug) Strait of Hormuz Closure Impacts Global Coffee Industry By Fionn Pooler The blockade of the Strait of Hormuz has disrupted many of the world's supply chains, and coffee has not been immune to the turmoil. While a relatively small amount of green coffee moves through the Strait, it is the interference with the petroleum and petrochemical sectors that has the potential to inflict longer-term pain on the industry as a whole. Iran closed the Strait, a narrow waterway between the Persian Gulf and the Gulf of Oman, in late February following airstrikes by the United States and Israel that marked the beginning of the 2026 Iran War. Under normal circumstances, about 25% of the global seaborne oil trade and 20% of the liquid natural gas trade pass through the Strait. Its closure has upended energy markets and sent oil prices skyrocketing. Coffee is reliant on petroleum and its byproducts. Farmers use fertilizer to increase yields and diesel to power machinery and processing equipment. Cargo ships require heavy fuel oil, while the majority of roasteries run their roasters on natural gas. Biodegradable alternatives are becoming more widely used, but plastic is still the basis of most packaging. Plastic also provides the lining for the billions of takeaway cups the industry goes through each year. The impacts of the Strait's closure on coffee will be felt in both the short and long term. Physical movement of green coffee from Africa and Asia to the Arabian Peninsula has already been disrupt- ed. Some vessels have had to reroute around the Cape of Good Hope, while higher fuel and insur- ance costs will also increase the cost of shipping coffee. The price and availability of diesel, used by farmers to power processing machinery and farm equipment, is already hurting farmers. In Brazil, the world's largest coffee producer, diesel oil prices rose between 12-23% in March, depending on the state. In Honduras, the USDA warned of "ongoing pressure" on farmers from higher diesel prices and uncertainty in fertilizer supply. Coffee production in many countries relies on synthetic fertilizers like nitrogen, which uses natu- ral gas as an energy source and a feedstock. Almost one-third of all fertilizer moves through the Strait, prices for which have more than doubled since the Strait closed. Even if the war ends soon and the Strait reopens, it will take a long time for supply and prices to return to their previous levels. Plastic is another petroleum-based product used across the coffee industry. It serves many pur- poses, from protecting green beans during transport to packaging roasted coffee, lining takeaway cups, and providing parts for home brewing equipment. The supply of raw material for various plastics has been impacted by the closure of the Strait of Hormuz, and prices have risen in response. The price of coffee has soared over the past few years due to supply chain issues, tariffs, and falling production. Although the futures market has reacted to the Hormuz crisis, it hasn't spiked as it did in the past, with forecasts of a record harvest in Brazil keeping the commodity price from eclips- ing the highs of 2024/25. However, the longer the Strait of Hormuz stays closed, the bigger the im- pact will be on global agriculture — and the wider coffee industry. The closure of the Strait of Hormuz exposes a coffee supply chain profoundly dependent on petroleum, plastics, and fertilizers. Photo credit: Alimurat Ural Once the coffee is con- tainerized, inspected, and loaded onto the cargo ship, the process moves from the Open to Afloat stage. Al- though the coffee is now out of the inbound logistics team's direct control, there is, of course, yet more paper- work to organize as the con- tainer sails to its destination. "You're trying to create this timeline," Armbrust-As- selin explains, "using infor- mation from the BOL, such as the lot size as well as the ship's ETA. As an inbound logistics person, you take that information, and you create a series of documents to com- municate all those details to the relevant parties who are going to receive that coffee when it lands stateside." If the importer is working with one, the customs broker needs to be provided with the necessary documentation to prepare. Sometimes this paperwork is time sensitive: for example, customs entry notifications need to be filed five days before the shipment arrives, but Armbrust-Asse- lin says that arrivals are sometimes delayed, which can cause issues with US cus- toms and add costs for the importer. Shipping times can vary wildly depending on the ori- gin and destination. Once the container arrives at the port, it has to go through customs and potentially inspection from the United States Food and Drug Administration. Af- ter that, it can be unloaded and transferred to the ware- house, at which point it reach- es the In Store phase. At this stage, the coffee can be held at the port for a few days, known as free time, before it is either transported directly to the roaster or transferred to the importer's warehouse.

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