Arabica coffee breaks records

Why is this important?

The global coffee market is suffering from a shortage for the fourth consecutive season, the effects of which are also being felt in Hungary. The drastic increase in prices is especially noticeable in the winter months.

In the light of the numbers

According to data from the Central Statistical Office, the price of 200-250 grams of ground coffee has more than doubled in the past four years. While such a package cost an average of 682 forints in November 2020, it was already 1,510 forints in November 2023. The price increase was particularly significant between December 2022 and February 2023, when the average price increased by 140 forints in two months.

Reasons for the price hike

There are several factors behind the increase in the world price of coffee:

• Brazil’s low coffee supply: The country’s reserves have decreased to just 500,000 bags instead of the usual 8 million bags at this time.
• Poor crop yield: After last year’s drought, this season’s weather was more favorable, but the crop yield was still 4.4 percent lower than the previous year.
• Market uncertainty: Brazilian producers are focusing less on exports, as the domestic market has an advantage. Central American and Colombian production also takes longer to reach the world market.
• Robusta coffee situation: Although the price of robusta, used for instant coffee, has increased by only 0.9 percent this year, Indian exports could fall by more than 10 percent.
• Further effects of the world market

Some Vietnamese and Indian coffee producers are holding back their crops in the hope of a price increase, while 80-90 percent of Brazil’s robusta stocks have already been sold. This could further exacerbate supply tensions in the market.