We’ll get into the factors that have caused a rise in cost, but first, let’s understand coffee beans and where they are grown.
What coffee beans are impacted?
Odds are the bean that you are using for your morning flat white is an Arabica bean. It is known for its high-quality and lighter-tasting bean. Brazil is the top producer of Arabica beans.
If you go for more of a jolt in the morning, you are probably drinking a cup that features Robusta beans. They are more bitter-tasting but are highly caffeinated. The largest producer of Robusta beans is Vietnam.
It is what is happening within Brazil and Vietnam that have caused the rising prices for the whole industry.
Though we do not purchase beans from Vietnam and buy a small percentage from Brazil, the crunch felt in these countries has caused prices to rise across the globe, including at cafes and grocery stores. Large coffee roasters will start looking to other nations, and that will drive prices up for everyone.
What’s Causing Coffee Prices to Increase?
Your first instinct may be to think that a worker shortage has caused a decrease in production. But, unlike many other industries, production has largely been unaffected by COVID.
Here are the main factors contributing to this sharp increase in coffee prices.
1. Weather in Brazil
The primary factor in the rising cost of coffee is the weather in Brazil. Because they are the largest producer of the Arabica bean, the dry weather and frost that hit the country have caused massive ripple effects across the globe.
2021 yields were dramatically lower than a typical down year. At the outset of the growing season, a severe drought combined with a late-season frost caused damage and a lower yield. Experts are watching for a La Niña weather pattern this year to see how long drought conditions in Brazil will continue. Rain will mean a recovery.
On top of this, the limited availability of shipping containers has reduced coffee exports from Vietnam.
3. Rising COVID-Related Costs
So much more goes into the cup than a bean. Expenses like the packaging materials, filters, labour costs, and the energy involved in shipping and roasting coffee have all seen increases.
On top of all of this, soaring fertilizer prices have impacted coffee farmers. Add all of these costs up, and it means that the price of your morning cup has likely gone up.
Rain, Rain, Don’t Go Away
We have never hoped for rain more than we do for the coffee growers in Brazil. If the weather can change, we are talking about a boost to one-third of the global coffee supply. Additionally, as COVID restrictions are lifted in Vietnam, the shipping problems will hopefully decrease.
Coffee has always been a commodity with massive fluctuations in supply and pricing. We will continue to monitor the prices. Hopefully, by the time International Coffee Day rolls around, we’ll be talking about the ideal pour-over method and not about fluctuating prices.