Sun, 03 Dec 2023

Coffee prices skyrocket
23 May 2023, 16:13 GMT+10

Wholesale costs of robusta beans are at their highest in nearly 12 years, according to Bloomberg

Coffee lovers around the world could struggle to find a budget-friendly cup of their favorite drink as the cost-of-living crisis and tighter supplies have pushed up prices, Bloomberg has reported.

According to the outlet, last week wholesale prices hit their highest level in nearly 12 years. Costs even soared for the robusta blend, which is typically less expensive because it is easier to produce in large quantities. Robusta is often used in instant coffee, espressos, and ground blends sold at supermarkets as a cheaper alternative for customers.

The report indicated that consumers in Europe's largest coffee market, Germany, have seen retail costs soar amid a near-20% yearly jump in the price of instant varieties. US instant coffee price-growth also slowed less than the roasted version in April.

Meanwhile, expectations that the supply of robusta will recover any time soon are low due to poor harvests in the world's largest producers, Vietnam and Brazil. There are also concerns that Indonesia's output could drop as a result of heavy rains.

Global shipments of robusta beans have nonetheless increased, with more exported globally in the first six months of the current season compared to the last three years, Bloomberg reported, citing data from the International Coffee Organization. Statistics showed that shipments between October and March were about 4% higher than the same period in 2021-22. However, that was not enough to keep up with rising demand.

"There's been so much of a demand shift away from higher-priced coffee that even the market isn't being satisfied by higher robusta exports," said Judith Ganes, who runs a New York consultancy focused on commodities such as coffee.

For more stories on economy & finance visit RT's business section


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