Coffee bean prices hit all-time highs due to adverse weather

According to the publication on coffee market trends, in December last year, arabica – the higher-quality coffee variety preferred by roasters – cost about 58% more than a year earlier, while the robusta type, which is mainly used to make instant coffee and as a filler in coffee blends, experienced a 70% increase in price.

This reduced the price difference between the two types, which had not been seen for nearly 30 years.

Further price increases possible

The FAO forecasts that coffee export prices could rise further this year if major producing regions significantly tighten supply.

The main reasons for the recent price increase are limited export stocks in Vietnam, subdued production in Indonesia and unfavorable weather in Brazil.

Transportation costs also play a role

Higher transportation costs have also contributed to the increase in coffee prices. According to preliminary data, consumers in the United States paid 6.6% more for their coffee in December last year, while in the European Union they paid 3.75% more compared to a year earlier.

“Higher prices could encourage investment in technology and research and development in the coffee sector, which is mainly based on smallholder farmers, to increase resilience to climate change,” said Boubaker Ben-Belhassen, FAO’s Director for Markets and Trade, adding that climate change will have a long-term impact on coffee production. FAO supports many coffee-producing countries in implementing climate-friendly solutions and increasing biodiversity.