The prices for coffee in your local café might be changing soon, and big price hikes for coffee are expected to last for at least the first half of the year.
In the last few years, the price of coffee has slowly increased like all commodities, but most of these price increases have been absorbed by the major coffee companies; however, now we might be seeing this change.
The most produced coffee type worldwide is the Arabica bean, which has increased in price by 80% this year. The largest producers of coffee have been hit with severe weather such as droughts and flooding, which has impacted production.
“Throughout August and September, Brazil was hit with the worst droughts they had seen in 70 years”
The biggest producer of coffee is Brazil, where it is estimated they produce 2.68 million metric tons of coffee every year. Following them is Vietnam, who export 1.5 metric tons per year. However, in the last year both of these countries have faced extra challenges in producing coffee.
Throughout August and September, Brazil was hit with the worst droughts they had seen in 70 years; then, in October, there was excess rainfall. This change in usual weather patterns has led to a decrease in coffee production and made producing coffee more expensive. Not only is less coffee being produced, but coffee has become more expensive to farm due to these challenges. Vietnam has also suffered from unusual weather, decreasing its annual production as well.
This unusual weather has become more common in recent years due to the rising temperatures of the globe and the continuation of climate change. 2024 was reported to be one of the warmest years on record, and scientists only estimate the coming years will be worse. Unless significant changes are made, it is likely that more extreme and out-of-pattern weather will continue and become more commonplace. This means imported foods are likely to keep increasing in price due to the disruptions in farming.
“With coffee still increasing in popularity, it is likely that suppliers will struggle to meet customer demands”
The coffee shortage around the world is likely to hit consumers hard in the upcoming months. Many of the major coffee brands, such as Lavazza and Nestlé, say they are at a tipping point to increase prices. With coffee still increasing in popularity, it is likely that suppliers will struggle to meet customer demands. However, it is likely that more than just the buyer will be affected by these shortages.
Coffee is the world’s second most traded commodity by volume, so countries that have significant coffee exports might face problems in the economy. These price increases are forecasted to continue until the latter half of the year, when new production will hopefully be able to replenish supplies and bring prices back down. However, if more extreme weather takes place, the price surge for coffee could become permanent.
