Coffee Prices Soar After Bad Harvests and Insatiable Demand
As the world’s largest coffee producer, Brazil, suffers from one of the worst droughts in almost a century, global coffee prices are rising and threatening to drive up breakfast expenses.
Last month, prices for arabica coffee beans, the most common kind grown in Brazil, reached their highest level since 2016. Arabica futures on the New York Mercantile Exchange have gained 18% in the last three months to $1.51 per pound. Robusta, a stronger-tasting type used in instant coffee, has climbed more than 30% in the last three months, reaching a two-year high of $1,749 per metric tonne.
After months of drought, Brazil’s farmers are bracing for one of their largest drops in productivity in almost two decades. The arabica crop in Brazil alternates between a robust year and a weak year. Following a record harvest in 2020, 2021 was projected to be a down year, but the decline has been more severe than anticipated.
“I’ve been producing coffee for more than 50 years, and I’ve never seen a drought as terrible as the one we had last year and this year,” Christina Valle, a third-generation coffee farmer in Minas Gerais, Brazil’s largest coffee-growing state, said. She replied, “Normally, it takes me three months to harvest my coffee; this year, it only took me a month.”
