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Coffee worth surges to highest on record


Coffee worth surges to highest on record

Getty Images A barista prepares a cup of coffee at a shop in Hanoi, Vietnam, on Tuesday, 30 August, 2022. Getty Images

Coffee drinkers may soon view their morning treat get more expensive, as the worth of coffee on international goods markets has hit its highest level on record.

On Tuesday, the worth for Arabica beans, which account for most global production, topped $3.44 a pound (0.45kg), having jumped more than 80% this year. The expense of Robusta beans, meanwhile, hit a fresh high in September.

It comes as coffee traders expect crops to reduce after the globe’s two largest producers, Brazil and Vietnam, were hit by impoverished weather and the drink’s popularity continues to develop.

One specialist told the BBC coffee brands were considering putting prices up in the recent year.

While in recent years major coffee roasters have been able to absorb worth hikes to keep customers joyful and maintain trade distribute, it looks like that’s about to transformation, according to Vinh Nguyen, the chief executive of Tuan Loc goods.

“Brands like JDE Peet (the owner of the Douwe Egberts brand), Nestlé and all that, have [previously] taken the hit from higher raw material prices to themselves,” he said.

“But correct now they are almost at a tipping point. A lot of them are mulling a worth boost in supermarkets in [the first quarter] of 2025.”

Italian coffee giant Lavazza said it had gone to great lengths to protect its trade distribute and not pass on higher raw material costs to customers, but soaring coffee prices had eventually forced its hand.

“standard is paramount for us and has always been the cornerstone of our deal of depend with consumers,” the business told BBC information.

“For us, this means continuing to tackle very high costs. So, we have been forced to adjust prices”.

At an occurrence for investors in November, a top Nestlé executive said the coffee industry was facing “tough times”, admitting his business would have to adjust its prices and pack sizes.

“We are not immune to the worth of coffee, far from it,” said David Rennie, Nestlé’s head of coffee brands.

Drought and heavy rain

The last record high for coffee was set in 1977 after unusual snowfall devastated plantations in Brazil.

“Concerns over the 2025 crop in Brazil are the main driver,” said Ole Hansen, head of goods schedule at Saxo financial institution.

“The country experienced its worst drought in 70 years during August and September, followed by heavy rains in October, raising fears that the flowering crop could fall short.”

Line chart showing coffee futures prices for Arabica coffee in US dollars per pound, from September 1972 to 10 December 2024. The price starts at roughly 50 cents per pound and climbs to a high of just over $3.00 in 1977. It then fluctuates between roughly 50 cents and $2.50, until hitting a record high of $3.44 on 10 December 2024.

It is not just Brazilian coffee plantations, which mostly produce Arabica beans, that have been hurt by impoverished weather.

Robusta supplies are also set to reduce after plantations in Vietnam, the largest producer of that variety, also faced both drought and heavy rainfall.

Coffee is the globe’s second most traded goods by volume, after crude oil, and its popularity is increasing. For example, consumption in China has more than doubled in the last decade.

“Demand for the goods remains high, while inventories held by producers and roasters are reported to be at low levels,” said Fernanda Okada, a coffee pricing analyst at S&P Global goods Insights.

“The upward pattern in coffee prices is expected to persist for some period,” she added.



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