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The future of coffee prices is uncertain due to the unpredictable climate!

August, 2024…

Extreme weather events in Brazil and Vietnam are among the main reasons for the increase in coffee prices. So what does the world have in store for coffee prices?

Kanica Goel from www.newfoodmagazine.com writes that there has been significant volatility in the global agricultural commodity market in recent months, affecting prices, supply chains and trade dynamics worldwide. According to Goel, the effects of this instability are felt most by consumers.

Amid these fluctuations, the price of one particular commodity has reached an all-time high and that is coffee. Prices have risen by more than 30 percent since the beginning of this year and 67 percent in the last year.

What factors are driving up coffee costs?

The main factor driving coffee prices higher is supply concerns stemming from climate problems in Brazil and Vietnam, two major coffee producers. Together, these two countries account for 55 percent and 50 percent of global coffee production and exports, respectively.

What does the future of coffee hold?

Ongoing concerns over coffee supply have triggered investors and traders to short sell coffee. In the short term, this has the potential to keep the commodity’s price even higher.

In the longer term, prices are likely to continue to rise, especially given the unpredictability of the climate in recent years. Robusta coffee market supply is on track to be in negative balance for the fourth consecutive year, which could keep global prices high. In addition, the exponential increase in the use of coffee as a substitute for cocoa and strong demand from Asia will put upward pressure on prices…

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