Global raw coffee prices have doubled in just a few months as production has been reduced due to adverse weather conditions, and further increases could be fueled by the announced introduction of US tariffs on imports from all countries.
Although heat and drought losses have reduced production forecasts in Brazil and Vietnam, the world's largest coffee producers, global production is still expected to rise kafe, but not to the extent expected by investors in the raw materials market, according to the Associated Press.
This has boosted coffee prices, largely due to continued strong demand in Europe, the US and China.
Pricelist peaked in February but remain high, forcing coffee roasters to weigh how much of the cost to absorb and how much to pass on to consumers.
At the beginning of March, raw coffee cost more than double compared to the price in September. And that goes for mid-range coffee, while specialty coffees, grown in delicate climates to slow growth and gain flavor, could cost even more.
Will Trump's tariffs increase the price of coffee?
The 10 percent tariffs imposed by US President Donald Trump cover most coffee-producing countries, including Brazil, Ethiopia and Colombia, and are expected to increase costs for Americans.
American coffee roasters are reassessing supply chains amid Trump's chaotic announcements - he first threatened tariffs of 46 percent on imports from Vietnam and 32 percent on imports from Indonesia, then delayed the start of their implementation.
The best coffee in the world grows near the Equator, where the slow growth of the plant allows the bean to acquire flavor.
In February, the global export of raw coffee fell by 14,2 percent compared to the same month of the previous year, according to the report of the International Coffee Organization.
The shortage sent the price of raw coffee to its highest ever in February, breaking the record set in 1977, when a severe frost destroyed 70 percent of Brazil's coffee plants.
Climate, however, is not the only factor driving prices, as inflation increases the cost of labor, fertilizer and borrowing.
The recent rise in coffee prices may also be due in part to importers buying larger-than-usual quantities before Trump's tariffs take effect.
Source: H1
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