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Rising Coffee Prices a Rude Awakening for U.S. Consumers

U.S. consumers are paying more for coffee due to production challenges in key coffee growing regions, leading to escalating costs for importers. Imported coffee prices have risen 65% since January 2021, and consumers are now shelling out 20% more for ground coffee than they were in April 2023. Higher coffee prices are likely to continue for the foreseeable future as production recovers and supply catches up to demand.

Coffee consumption has grown steadily in recent years, with Asian consumption rising 14.5% since 2018. Overall global coffee consumption has increased 3.4% over that time, with South America, Africa, and Central America all experiencing growth of at least 5%. China experienced the highest coffee consumption growth rate, with servings up 15% over the last year. The number of coffee shops in China grew 58% to 50,000 in 2023 alone, making it the world leader in branded coffee shops.

Production headaches in key coffee growing markets like Brazil, Colombia, and Vietnam contribute to price increases and show few signs of improving. Droughts, frost, and fires in Brazil have damaged as much as one-fifth of arabica coffee growing areas, and below-average rainfall continues to hamper production. Colombian coffee yields continue to trend lower due to growers limiting fertilizer use due to price increases. Vietnam, the third-leading coffee supplier to the U.S., continues to suffer from COVID-related disruptions, leading to stringent travel restrictions and a notable workforce decline.

Nearly all of the coffee consumed in the U.S. is imported, so higher prices are likely until the production challenges subside. While it is highly unlikely U.S. consumers will significantly curb their consumption due to high prices, they may get creative with at home coffee drinks and lean on store-bought flavorings to replace more expensive specialty drinks from coffee shops.

Read More @ Yahoo

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