That morning coffee that many we use to raise It is a luxury. And if things are like this, that statement will be literal. The reason is that we have had several bad months for the coffee world, experiencing price increases for both robust and Arabica varieties. This has just made the news that its price has skyrocketed: 70% so far that year.
It is the highest since 1977, and it is bad that it does not seem to be something temporary because of what is happening in the producing countries… and at the same time.climate change.
record. The news is devastating: on the New York Stock Exchange, this week we saw that Arabica beans rose 4.7%, reaching $3.23 a quintal – half a kilo, more or less. Prices like this haven’t been seen since 1977, but New York’s case is not unique. As read in Financial TimesIn London, robusta beans increased their price by 7.7%, reaching $5,507 per ton. They have almost doubled in price at the beginning of this year.
You have found Arabic in trouble. This is the general variety. They belong to the most expensive coffees in the world; like a geishaand it is in great trouble: production has plummeted this year due to poor harvests generated by climatic phenomena that have shaken Latin America.
Brazil and Colombia are two paradises of this variety, but one fresh drought the country will suffer a lot during the next year. Now a producer they say The plants that die before flowering and this from the 120 bags of corn that they were expecting to harvest this season, they only got 100. This is something that increases prices, of which we have an example in Colombian coffee. 125 kilos of dry paper coffee costs 1,360,000 pesos 2023, about 302 European coins. The same car costs 2,200,000 pesos, about 488 euros.
robust too. Robusta, of the same. We have already said the first part of this year to the value of corn rose almost 170% in a decade. The ultimate value for almost 30 years was something known as the International Coffee Organization information market The problem is that we see a big spread in the month. On the 8th of July the firm price of corn in London reached $4,300 per ton.
Now, as we have said, there are thousands of thousands more per ton. There are several issues to consider here. There is one crisis The red seawhich hinders most robust ships from using short voyages. And the climate is another thing, because the drought that plagues the Asian country reduces production.
Short term crisis. And both arabica and robusta have a heavy market. It is Arabica, which is usually found in individual varieties, but it is robust, cheaper and also in high demand both by users and mainly for blending coffee and instant coffee. Demand continues to grow and China has entered the equation as well, with a growing taste for coffee.
Giuseppe Lavazza, president of the Lavazza group, stated that price increases that have never been seen before as now, but it was only the beginning, because all these things which we have mentioned will be for a constant price. In Quinquedayswe can see that the analysts are already the worst around the next season because, despite the rains in Brazil due to the blooming of the best flower, it is important that these flowers do not stick to the branches, which “causes the loss of reproduction in its next.”
Like a toilet in a pandemic. The fact that the price of coffee has risen in this way is caused by the coffee roasters themselves. As read in the Financial Times, expecting these bad harvests to happen in the next two seasons, buyers bring their orders and buy more. And indeed, when there is such a demand for the same work, the price rises.
It rushes to secondary raw materials in factories around the world, but mainly in Europe. The reason is that new laws of the European Union, which It is extended one year – it will require buyers to prove that the coffee they import was not grown in desert lands. And it is clear that if the European roasters are buying to get next year’s stocks, the North Americans are no less on the alert before the price rises.
And the trumpet came. All this (laws, desires to buy, increased transport costs and bad harvests at the time of the storm) is a perfect storm that lacks more than one ingredient; Donald Trump’s arrival at the White House. Carlos Mera is head of agricultural affairs at Rabobank and told the FT that “if you’re roasting and you think there’s going to be tariffs on coffee, it’s going to try to import now. Otherwise, it’s going to pay the tariffs later.” Consider those charges that Trump has promised to stamp out foreign affairs.
In addition, Mera stated that this is more of a “pain” for consumers, the end user, since the increase in raw materials as soon as they pay for the roast will be reflected in the product.
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