Demand is increasing all the time, climate change is making crop yields less reliable. Probably also complicated in that for espresso we’re all essentially trying to buy Arabica, but there’s also problems with the supply of Robusta more commonly used for instant.
In the last year Brazil has had a drought that’s impacted supply (and might have a consecutive one) of Arabica, and Vietnam has had both a drought and flooding impacting Robusta.
I guess my question wasn’t why prices went from $3 to $13 a kilo, my question was why doesn’t coffee (and especially roasted coffee beans) cost 4x as much?
Though as you’ve hinted, it might be that people had supply contracts so haven’t paid more until the contracts started to run out and now they have to sign new contracts at a much higher cost.
Oh right, yeah I suspect that’s it, in theory futures should cost in the likelihood of more droughts / floods so this could be a one off spike factoring in new (not at all new) information about climate risks ahead of a constant year on year rise in the future until coffee can’t grow anywhere (at least not coffee that tastes good).
Climate change & demand.
Demand is increasing all the time, climate change is making crop yields less reliable. Probably also complicated in that for espresso we’re all essentially trying to buy Arabica, but there’s also problems with the supply of Robusta more commonly used for instant.
In the last year Brazil has had a drought that’s impacted supply (and might have a consecutive one) of Arabica, and Vietnam has had both a drought and flooding impacting Robusta.
https://www.nytimes.com/2024/12/28/business/coffee-prices-climate-change.html
Given futures are spiking, its also possible that its residual covid stimulus money still hunting for something to make money off.
I guess my question wasn’t why prices went from $3 to $13 a kilo, my question was why doesn’t coffee (and especially roasted coffee beans) cost 4x as much?
Though as you’ve hinted, it might be that people had supply contracts so haven’t paid more until the contracts started to run out and now they have to sign new contracts at a much higher cost.
Oh right, yeah I suspect that’s it, in theory futures should cost in the likelihood of more droughts / floods so this could be a one off spike factoring in new (not at all new) information about climate risks ahead of a constant year on year rise in the future until coffee can’t grow anywhere (at least not coffee that tastes good).