(TheLastPatriotNews.com) – In a negative development bound to hurt Americans, coffee prices have soared to unprecedented heights – and it’s no longer just a morning pick-me-up that’s at stake but a wake-up call revealing the perilous path climate issues and global demand are paving.
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The price of Arabica beans has surged by over 80% this year to reach $3.44 per pound, a new record driven by a global supply shortage.
Adverse weather in Brazil, the world’s largest coffee supplier, has slashed production estimates to just 34.4 million bags.
Meanwhile, the Robusta bean, another key player in the coffee world, has seen prices increase by 60% due to similar weather woes in Vietnam.
These supply strains meet a relentless demand, especially from growing markets like China, creating a precarious balance in the industry.
In Brazil, the worst drought in 70 years, followed by heavy rains, adds to concerns over the 2025 crop’s viability.
Experts warn that climate change could drastically reduce cultivatable land, particularly in Central America, by 2050.
With production expected to face a shortfall of around 8.5 million bags in 2025-26, global coffee markets may experience continuous strain for years.
“Concerns over the 2025 crop in Brazil are the main driver,” says Ole Hansen, head of commodity strategy at SaxoBank.
Businesses must now decide whether to absorb these increased costs or pass them on to consumers.
Major brands like JDE Peet and Nestlé have previously shouldered price rises, but with current industry conditions, maintaining this practice grows less feasible.
Nestlé’s David Rennie poignantly illustrates the dilemma, stating, “We are not immune to the price of coffee, far from it.”
Consequently, consumers may soon feel the bite in their wallets reflected in raised prices and smaller packaging on store shelves.
“Demand for the commodity remains high, while inventories held by producers and roasters are reported to be at low levels,” explains Fernanda Okada.
Europe and North America, traditionally strong coffee markets, are witnessing a competitive surge in demand from Asia, exacerbating the strain on global supply chains.
Despite these challenges, there are glimmers of hope. Uganda’s coffee sector is thriving, with exports rising by an astonishing 82.9%, making it Africa’s largest coffee exporter.
With earnings reaching $1.4 billion in the past year,
Uganda’s coffee industry initiatives showcase a successful model amid adversity.
Yet, as longstanding weather patterns disrupt traditional farming landscapes, the broader coffee community must brace itself for a period of uncertainty and adaptation.
CHART OF THE DAY: ☕️📈Arabica coffee prices hit a record high, surpassing the previous peak set in 1977.
Brazil, the biggest producer of the Arabica bean variety, is suffering a drought, and the global market faces a fifth season of demand outstripping supply. #Coffee pic.twitter.com/O93lhtGP2e
— Javier Blas (@JavierBlas) December 10, 2024
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