Economy/ Global Coffee Prices surge amid weather woes and growing demand
Rising coffee prices are brewing trouble for consumers. This surge in costs stems from severe weather disrupting production in Brazil and Vietnam, the world’s largest producers of Arabica and Robusta beans, respectively, coupled with an ever-growing global appetite for the beverage.
Arabica bean prices soared to $3.44 per pound this week, a record-breaking jump of over 80% this year. Meanwhile, Robusta beans, commonly used in instant coffee, also reached new highs in September.
Experts point to Brazil’s worst drought in 70 years, followed by heavy rains, as a key factor threatening the 2025 crop. Vietnam, responsible for most Robusta production, has similarly suffered from erratic weather patterns.
The pressure is now shifting to coffee giants like Nestlé and JDE Peet, which have historically absorbed price hikes to retain customer loyalty.
However, industry insiders, including Tuan Loc Commodities CEO Vinh Nguyen, suggest that companies are nearing a tipping point.
Price increases at supermarkets could become inevitable in early 2025, with pack sizes potentially shrinking as firms attempt to manage costs.
Demand for coffee shows no signs of slowing. China, for instance, has seen consumption double over the past decade.
With inventories at historic lows and weather uncertainties persisting, analysts warn that the upward trend in coffee prices is unlikely to ease anytime soon, leaving consumers and producers bracing for challenging times ahead.
