Coffee was the ‘star performer’ in a basket of daily consumables for 2024 and there’s no inflationary relief in sight for the one-billion-plus drinkers of the world’s favourite hot beverage – about 12.6% of the global population of 8.2 billion.
According to independent research conducted in several countries, the price of coffee beans has spiked 80% year-on-year in developed countries.
Similar price pressure has been felt in South Africa.
In January 2024, a 200-gram container of top-shelf instant coffee that cost about R106, now costs R156 a year later.
According to coffee market commodity indicators on the S&P GSCI index in the US, the global price of beans is anticipated to increase by another 30% at least, during the rest of the year.
Exorbitant spikes in the price of brands like Nestle, Jacobs Kronung and Douwe Egberts, have a clear and undeniable global link, experts say.
Running alongside the climate crisis denialism of Donald Trump, whose second term as US President has again heralded the withdrawal of his administration from the Paris Agreement meant to curb global warming, rocketing coffee prices are directly related to bean production challenges in Brazil and Vietnam.
Last year, officially proclaimed as the hottest year on record, in which cities like Rio de Janeiro experienced new heat highs of 62 degrees Celsius, saw production halved in the world’s largest exporter of beans.
Hobbled by drought and then unseasonal floods, Brazil saw a second consecutive year of output well below global demand.
Brazil's coffee export performance in 2023 was significantly below expectations, with the country exporting only about 35.6 million bags of coffee during the crop year from July 2022 to June 2023, Agencia Brazil has reported.
This figure represents approximately 50% of the expected exports, largely due to adverse weather conditions, including drought and high temperatures, which negatively impacted coffee production and yields in 156 regions of production.
Fortunately, Brazil's coffee exports rebounded in subsequent months, with record volumes reported in 2024. By December 2024, Brazil had exported approximately 46.3 million bags, a notable increase in at least 15 regions.
The recovery was attributed to improved weather conditions and a surge in robusta coffee exports, which saw a remarkable growth of over 170% compared with the previous year.
Vietnam's coffee production situation for the 2024-2025 season is characterized by a projected output of approximately 29 million bags, with about 24.4 million bags expected for export and 4.6 million bags for domestic consumption.
Vietnam Agriculture reported that this forecast reflected an increase in investment from farmers, driven by rising coffee prices, which has encouraged better agricultural practices and maintenance of coffee plantations.
However, the industry is also facing challenges, including a 10% decline in production compared with previous seasons, primarily due to climate-related issues such as severe droughts and erratic rainfall patterns in key growing areas like the Central Highlands. The combination of these environmental factors and rising labour costs has led to increased coffee prices, which reached around 5.27 USD/kg during the peak of the 2023-2024 season.
Any improvements in the price of a good cup of homemade joe will take some time, as better bean yields take months to filter through to world markets. – Assisted by various sources.
