Why unroasted coffee beans are costing more than ever

Perfect Storm: Climate Change, Frost, and Shifts Drive Up Unroasted Bean Prices

The global coffee industry is facing a perfect storm of factors that are driving up the price of unroasted coffee beans traded in international markets. A combination of freak frost in Brazil’s coffee crops, market forces, depleted stockpiles, and a shift towards growing durian fruit in Vietnam has led to a historically high cost of unroasted beans.

According to analyst Judy Ganes, the cost of unroasted beans is now at an all-time high. Experts point to a mix of factors for this increase. The frost that hit Brazil’s crops meant that buyers had to turn to countries like Vietnam, which produce Robusta beans used in instant coffee blends. However, Vietnamese farmers have faced their worst drought in nearly a decade and climate change has affected the development of coffee plants, resulting in lower yields.

In response to these challenges, many Vietnamese farmers have started growing durian fruit, which is banned on public transport in several countries due to its strong odor. Durian sales in China have almost doubled between 2023 and 2024, making it more lucrative than coffee. This shift towards durian production has led to a shortage of Robusta beans, with exports down by 50% in June compared to the previous year.

Exporters from other countries have stepped up production, but not enough to ease the tight market. Wholesaler Paul Armstrong believes that commercial quantity coffee will experience the most disruption, with instant coffee, supermarket coffee, and gas station coffee likely to see increased prices.

However, industry figures caution that consumer prices may not necessarily rise due to the high market price of coffee beans. Felipe Barretto Croce, CEO of FAFCoffees in Brazil, says that inflationary costs such as rent and labor are more responsible for rising consumer prices than the cost of beans.

The article also highlights the serious challenges posed by climate change for the global coffee industry. A study concludes that even drastic reductions in greenhouse gas emissions could lead to a 50% decline in the area suitable for growing coffee by 2050. As a result, there are calls for a “green premium” tax on coffee to future-proof the industry.

The perfect storm of factors driving up the price of unroasted coffee beans may impact consumer prices, potentially leading to higher costs like £5 in London or $7 in New York for a cup of coffee. However, it remains to be seen whether consumers will be affected directly by these rising costs.

IMPACT ON THE FUTURE

The perfect storm driving up the price of unroasted coffee beans has serious implications for the future of the global coffee industry. With climate change posing significant challenges, the area suitable for growing coffee may decline drastically in the coming decades.

This could lead to a shortage of high-quality coffee beans and potentially higher prices for consumers. However, the impact on consumer prices will depend on various factors such as inflationary costs, production levels, and demand.

The shift towards durian fruit production in Vietnam is also worth noting. If this trend continues, it may have significant implications for the global coffee market. The increased demand for durian could lead to higher prices for coffee beans, making it even more challenging for producers to meet demand.

In conclusion, the perfect storm driving up the price of unroasted coffee beans has far-reaching implications for the future of the global coffee industry. It is crucial that industry leaders and policymakers work together to address these challenges and find sustainable solutions to ensure a stable supply of high-quality coffee beans in the years to come.

WHAT NEXT?

The perfect storm driving up the price of unroasted coffee beans has highlighted the need for sustainable solutions to address climate change and market forces. Here are some potential steps that industry leaders and policymakers can take:

• Invest in research and development to improve crop yields and resistance to climate change
• Implement measures to reduce greenhouse gas emissions and promote sustainable production practices
• Explore alternative sources of coffee beans, such as those from Africa or Latin America
• Consider imposing a “green premium” tax on coffee to future-proof the industry
• Develop new technologies to increase efficiency and reduce costs in the coffee supply chain

By working together, we can ensure a stable supply of high-quality coffee beans for generations to come.