Tomas Edelmann, a coffee producer and vice president of the International Coffee Producers Cooperative, told CNN that while his shade-grown coffee production method is more drought-resistant, a longer-than-normal dry season, which he attributes to climate change, has damaged crops this year.
“If you don’t have the right weather, you won’t have the right production,” he said. “And with low yields, obviously your production costs go up.”
These higher production costs could inflate coffee prices: coffee lovers may have to shell out more in the future as prices rise. Roasters and coffee experts are also signaling that prices may remain high for longer as factors like climate change reduce the global coffee supply.
The International Coffee Organization (ICO), an intergovernmental organization established in 1963 with the support of the United Nations, reported last month that the ICO Composite Indicator Price – an important benchmark price for the global coffee industry – reached a 13-year high, averaging 226.83 cents, or about $2.27 per pound.
“Coffee is more sensitive to temperature changes than many other crops,” said Michael Hoffmann, emeritus professor at Cornell University’s College of Agriculture and Life Sciences, to CNN.
Coffee experts often say that when Brazil sneezes, the rest of the world catches a cold – a reference to its status as the largest producer of Arabica, the premium coffee variety that makes up over 60% of all coffee production.
So, when an exceptionally strong frost decimated its crops in the summer of 2021, the coffee market was hit by an immediate supply shock, and coffee in the U.S. reached a high of 260 cents per pound.
The U.S. Department of Agriculture reported in May that Vietnam, the largest producer of Robusta, another type of coffee, has suffered several years of adverse weather and saw export levels drop by 7%. It noted in its 2023 annual report that it expected such weather conditions to become more frequent “due to climate change.”
What does this mean for your coffee?
Coffee retailers are already feeling the pressure, and many have begun raising prices, justifying a combination of factors such as poor harvests, climate change, the war in Ukraine, the conflict in the Red Sea, the intervention of speculators, and the strong dollar, which have created the “perfect storm” for the coffee industry, which has seen prices soar since the pandemic.”
And there’s no forecast for significant reductions.
However, despite the price increases, there is one thing experts are sure of: the demand for coffee may even decrease, but it won’t end anytime soon.
And the reason for that? There are no alternatives to coffee. If you have your coffee every morning, you will keep having it, whether it costs $1.00 or $3.00.
Source: CNN