Oh no, coffee is about to get a lot more expensive
Frost has damaged coffee plants in Brazil. As a result, the price of coffee is rising sharply, and it will probably stay that way for the next few years. Brazil is the number-one coffee country, so the disappointing harvest means we’ll soon have to pay more for our espresso. Panic!
Dunkin Donuts has already adjusted the price of a coffee-to-go in the United States, and German coffee chain Tschibo is also charging more for a pack of coffee than it did a few months ago. How come? Unexpected frost has damaged coffee plantations in Brazil. The young Arabica plants in particular have frozen to death. That means this year’s harvest will be quite disappointing. Precisely because the young plants have been damaged, the harvest will not recover quickly either.
Two dollars a pound
The bad weather in Brazil has an immediate impact on the global price of coffee, because Brazil is the world’s largest coffee producer. The price of a pound of Arabica coffee beans is now more than two dollars, and coffee has not been this expensive in the past six years.
Sugar too
One setback never comes alone. Brazilian farmers had already been struggling with drought. That was not only bad for the coffee harvest; yields of corn and sugar also fell short. An additional setback: coffee prices had been so low in recent years that many coffee farmers switched to growing other crops. Now that the harvest is falling far short, there is no buffer stock to absorb the impact.
Transport is expensive too
Coffee farmers in the number-two coffee country, Colombia, are also suffering from the weather. It is dry there, so the harvest is smaller. And to make matters even worse, international transport has also become more expensive. A case of coronavirus: after a year-long pause, international trade is getting back up and running, and demand for shipping by sea container is so high that it has become considerably more expensive.
Better in autumn?
Not all major coffee roasters are raising their prices straight away. Coffee is harvested twice a year, and they are hoping for a plentiful harvest in the autumn that can offset the setback. If that doesn’t happen? Then you can bet that an ordinary pack of filter coffee and those delicious pods will become more expensive too.
Also read:
- Coffee with fizz—you need this
- Baristas are cracking up: these are the most bizarre coffee orders
- Blokker is going to sell its own-brand coffee pods
Source: Retail Detail, Wall Street Journal, Telegraaf
