Coffee Bean Prices Soar to New Highs on Asia’s Expanding Middle Class

Global coffee bean futures are near record highs due to increasing demand from a growing middle class in China and Asia, while some major producers are facing poor harvests. London robusta coffee futures hit an all-time high of $3,497 per tonne on March 7, while New York Arabica futures reached their highest price in 14 months during December. Vietnam, the largest producer of robusta, is expected to provide 26.6 million 60-kilogram bags of beans in the 2023-24 year, down 12% from the USDA’s forecast in June. Output in Indonesia, the world’s third-largest producer, is projected to be down by 20%.

Unfavorable weather in Southeast Asia, such as high temperatures and drought caused by El Nino, has led some farmers to switch to more stable crops like rubber and durian. This has led to higher prices for robusta beans. Global consumption of coffee beans is expected to increase 20% from 2013-14, with notable growth in Asia. Consumption in heavy-producing countries Vietnam and Indonesia is up 60% and 90%, respectively, over the same span. China, the world’s seventh-largest coffee consumer, is seeing a 130% increase.

Coffee exports from Brazil to China rose 160% on the year, surpassing that of exports to larger coffee-consuming countries like Japan and the U.S. The middle class in Asia has expanded, and the number of people who enjoy coffee daily has increased. As of December, China had surpassed the U.S. to have the most coffee chain stores globally, with chains originating in China expanding rapidly worldwide.

Read More @ Nikkei Asia

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