Kalani Tharanga, JadeTimes Staff
D.W.G. Kalani Tharanga is a Jadetimes news reporter covering Political Blogs.
The Perfect Storm Driving Coffee Prices Sky High
Coffee drinkers in cities like London and New York may soon face the staggering reality of paying £5 or $7 for a single cup of coffee. This sharp rise in price can be attributed to a "perfect storm" of economic and environmental factors in the world’s top coffee producing regions. Unroasted coffee bean prices have surged to historic highs, says analyst Judy Ganes, and it all began with climate disruptions.
In 2021, a severe frost hit Brazil, the world's largest Arabica bean producer, causing widespread damage to coffee crops. As a result, global buyers shifted their focus to Robusta beans, typically used in instant coffee, sourced from Vietnam. However, Vietnam faced its own challenges, including the region’s worst drought in nearly a decade. Climate change has affected coffee plant development, which has, in turn, led to reduced bean yields, according to coffee consultant Will Firth.
Vietnamese farmers have also pivoted away from coffee, replacing crops with durian fruit, a smelly but highly profitable product that’s in high demand in China. This shift has depleted Vietnam’s coffee stockpiles and caused a 50% drop in Robusta coffee exports, further tightening the market. While other coffee producing countries like Colombia, Ethiopia, Peru, and Uganda have increased their exports, they haven’t been able to fully compensate for the global shortfall.
What It Means for Your Caffeine Fix?
As Robusta and Arabica beans now trade at near record highs, the coffee market is bracing for more price hikes. Paul Armstrong, a UK based wholesaler, warns that coffee drinkers may soon pay over £5 for a cup of coffee. He describes the situation as “a perfect storm,” driven by escalating costs in bean production, transport, and supply chain disruptions. Armstrong recently raised his own prices to account for the rising costs of imported beans from South America and Asia, but warns that costs are still intensifying.
Experts suggest that the impact will likely be felt more acutely in commercial grade coffee, such as instant coffee and supermarket brands, which are expected to rise sharply in price. Will Firth predicts that everyday coffee consumers, especially those buying lower cost products, will experience the most disruption.
However, Felipe Barretto Croce, CEO of FAFCoffees in Brazil, points out that rising retail coffee prices are also linked to broader inflationary pressures, including higher costs for rent and labor, not just the beans. According to consultancy Allegra Strategies, coffee beans account for less than 10% of the cost of a cup of coffee, meaning other factors are contributing to the pinch consumers are already feeling.
In this turbulent global coffee market, one thing is clear: your daily caffeine fix might soon come with a higher price tag.
