Due to the severe frost in Brazil and soaring shipping costs, the price of coffee beans may be higher in the next few weeks, and the price of a cup of coffee will become higher.
according to ReutersSince 1994, the worst frost suffered by Brazil, the world’s largest coffee producer, has raised the price of green coffee beans to the highest level in the past seven years, which will make consumers feel financially restricted when buying roasted coffee beans or coffee powder.
The loss is so severe that farmers may need to replant trees, which may take up to three years to start production.
Conab, the food supply agency of the Brazilian government, estimates that the frost on July 20 affected 150,000 to 200,000 hectares, accounting for approximately 11% of Brazil’s Arabica coffee production. New York Post Report.
After Brazil experienced its worst drought in 91 years, coffee prices have been rising.
Add to this Increase freight During the pandemic, some industries are experiencing a shortage of freight containers, which means that the cost of transporting coffee beans to North America and Europe has also become a major challenge.
Carlos Santana, the chief coffee trader of Eisa Interagricola, a subsidiary of ECOM Trading, briefed Reuters on the challenges of transporting coffee in the Americas.
“It’s almost uneconomical to take this route now. The ports in the United States are full, and shipping companies don’t want to ship more goods there, so they charge higher. The price is more than three times higher than before. A pandemic,” he said.
Reuters said the increased cost of coffee beans is expected to be passed on to supermarket consumers, but traders believe that some coffee chains may not raise prices in the short term.
“Roasting and grinding (coffee in the supermarket) only has coffee and some packaging. The price of your coffee at Starbucks may not rise (that much) because you pay more for the store, wifi, and experience,” a trader Shang told the news media.
According to Reuters, the US Bureau of Labor Statistics said that the average price of coffee powder reached a peak of US$4.75 per pound in April, a year-on-year increase of 8.1%. This is the highest level of coffee prices since July 2012, as the drought hit Brazilian crops.
According to a letter from Brazilian coffee industry group Abic to related roasters obtained by Reuters, some coffee companies have announced price increases.
This letter indicates that JDE Peet’s brands, including Douwe Egberts, Kenco and Peet’s, have increased their ingredients, shipping and other costs in the past 12 months, and that this precedent is expected to continue.
Photo: Devin Avery//Unsplash
