Is it possible that your daily flat white could soon be a thing of the past – or at the very least a more expensive special treat?
Due to Covid-19 lockout limitations, supply chains in Vietnam, the world’s second-largest coffee producer, have been disrupted, causing doubt regarding global coffee distribution.
“Exporters are straining to carry beans to the ports for shipment,” Bloomberg said, citing traders and suppliers. This is on top of “a slew of other logistical issues,” such as a “critical lack of containers and skyrocketing freight charges.”
According to Bloomberg, the Vietnam Coffee-Cocoa Association is one of numerous trade associations requesting the government to ease the limitations, arguing that they “create delays, raise expenses, and put shippers at danger of having to reimburse purchasers for late delivery.”
In response, Vietnam’s transport minister urged authorities to “do everything possible to expedite the transportation of farm products such as coffee and rice” while avoiding “any additional regulations and tedious paperwork.”
Vietnam isn’t the only country having supply-chain problems right now. The cost of beans has risen as a result of unseasonably cold weather that harmed harvests in Brazil, the world’s largest coffee producer, according to The Guardian.
On August 6, Reuters reported that a combination of the “most devastating frost” Brazil had seen since 1994 with “record freight costs sparked by Covid-19 causing massive shipping log-jams” are expected to “push retail prices to multi-year highs” over the next few weeks.
According to local sources, the frost damage was so severe that some Brazilian coffee producers may have to replace trees, which may take up to three years, according to the BBC.
Green coffee bean prices have already risen to “the highest level in nearly seven years,” according to Reuters, with arabica and bitter-tasting robusta coffee prices reaching multi-year highs.
However, according to The Guardian, consumers are unlikely to have seen “any immediate spike” in the price of their cappuccinos because most suppliers “had six-month contracts locked in.” The picture will be clearer in early 2022, when the full result of Brazil’s harvest is known and there is more clarity surrounding Vietnam’s Covid situation.
A rise in coffee prices will increase food bills at a time when many consumers are struggling financially as a result of the pandemic: by the end of 2020, 700,000 people in the UK had been plunged into hardship, reported The Big Issue. The issue has gotten worse since then. According to Reuters, the UN food agency’s index of world food prices for July 2021 “showed a year-on-year surge of 31%.”