Global coffee trade grinding to a halt, hit hard by brutal price hikes
Global coffee trade grinding to a halt, hit hard by brutal price hikes
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The coffee price hikes have stemmed from lower production in important coffee growing regions, particularly in top grower Brazil, reducing the availability of beans.
That's the closest I could find in the article as to a reason. It'd be nice to know if it was just a bad year or if this is going to be a permanent challenge going forward due to climate change or some other factors.
Coffee can be a pain to grow. As someone else mentioned, you have to have the right environment (rain, sunshine, soil, etc).
Adding to this is that it’s easier to grow other things that are in just as much demand. Vietnam has switched to growing durian fruit — less fussy and makes them just as much money.
Coffee is also quite carbon intensive.
Coffee is quite sensitive to environmental factors and only grows in certain specific regions as a result. Those factors are being upended by climate change. Coffee is going to very rapidly become a luxury product.
Billionaires don't care. Twenty dollars or two dollars for a cup is effectively the same price to them; insignificant. It's the rest of us that get fucked.
Except we are nowhere near a situation like that. Articles like this don't tell the actual prices because they are so small people might start questioning why they pay so much for coffee.
The poll had a median forecast for arabica prices at the end of 2025 of $2.95 per pound, a drop of 30% from Wednesday's close and a loss of 6% from end-2024.
$3 per pound - $6 per kilo. Or to put it in another way, 4.8 cents per shot of espresso, two of which go in a 16 oz Starbucks latte that costs you $5.75, which would be enough money to buy 120 shots worth of bulk arabica.
If that goes up by 7% or 70% or 700%, the cost of that latte should hardly change.
Logistics cost money
Shucking and processing the beans costs money
Roasting the beans costs money
Exactly. And all of those stay the exact same price even if raw coffee price increases, meaning the price of a ready made cup of coffee hardly changes as the actual raw bulk coffee is only 1/60th of the total price of a starbucks latte.
You're forgetting the most obvious factor: charge the most people are willing to pay.
Those factors are being upended by climate change.
How, exactly?
It's my understanding that coffee does best in warm climates. Shouldn't global warming, at the very least, change where we grow coffee as opposed to just removing the areas we can grow it in?
Others have given the detailed answer, but the really simple one is this; "How many jungle plants grow well in deserts?" If it was simply a matter of "hot = good", surely the answer would be "all of them."
There are specific conditions that every plant requires to grow well. Some plants are more tolerant of disruption to those conditions, some less so. Climate change affects all of those conditions. Increased global temperatures can make some places hotter, some places colder, some places wetter, some places dryer, and have all sorts of other knock on effects too.
It's not quite as simple as that and there are other growing conditions that are required. If we take Arabica, it requires a very small window temperature window, sunlight but not so much it scorches the plant, a particular pH of soil, and consistent rainfall.
Climate change brings unpredictability to growing conditions so even if you had to move where you grow it, it won't necessarily mean it'll grow well. Plus different locations can bring on new diseases for the (coffee has its fair share of diseases to combat with) and so new varitals would need to be selected which is no simple task.
As the article points out, coffee is notorious for being fussy when growing it.
Short answer: more atmospheric heat = more energetic weather = more extremes and variation.
Many crops don’t just need an average temperature, they need protection from extremes and the climate they evolved for. Buckle up.
From what I've heard this is largely due to bad weather due to climate change, as I understand it, we should not expect coffee prices to ever go back to where they were.
For the past 4-5 years it seems prices have only gone up here. It's more than triple now of what it used to be before Covid, and that's only 5 years!But I'm not an expert, this is just what I've been seeing as a heavy coffee drinker in the supermarket, and what I've gathered from short news tid-bits.
Pretty much. I watched my favorite coffee hut (literally a hut that you drive up to) go from $3 large like 5 years ago to $4, then within a year hit $5. At that point, I stopped going, although funny enough, i did go there today since it was convenient and it's now $5.50... I laughed and said yeah I'm definitely done now. As much as I like coffee, it's now a high-end luxury item that I can no longer afford even occasionally due to everything else raising as well.
As much as I like coffee, it’s now a high-end luxury item that I can no longer afford even occasionally due to everything else raising as well.
You could always make it yourself. Although caffeine pills are the cheapest way to go if it's really caffeine you're after.
Paying $3 for a drink was always a scam. Paying $5 is just like getting ripped off by a drug dealer while thinking you're getting the hook up. Complete insanity.
My ground coffee has gone up about 20-30% over the past 2 years. This is just based on memory and not an exact calculation. It’s possible, I’ve misremembered the old price slightly, but either way it has gone up.
Here (Denmark) a pack of coffee 500g could be had for as low as $3 before Covid, now it's very rare to see below $7. But most brands have decreased the size of their packs to hide it.
Also there are many that use capsules and other ways to make coffee, where the price isn't as much dependent on the actual coffee, but more the markup of the brand.The cost of pretty much everything has gone up that much in that time.
As it turns out, more money in the hands of consumers tends to translate to higher prices.
It's almost like, and hear me out, it's almost like businesses charge what people are willing to pay, not what goods cost to produce.
It's also due to very bad weather/floods in the second largest producer, Vietnam.
And since extreme weather events are increasing in intensity and frequency, it's not going to get better (as a trend at least).