The global coffee industry is facing unprecedented challenges as extreme weather events in major producing countries disrupt supply chains and drive up prices.
Brazil, the world's leading coffee producer, is grappling with a severe drought, while Vietnam, the second-largest producer, has been hit by devastating floods.
According to Euronews, these climate-related disasters have led to significant reductions in coffee yields, particularly affecting the high-quality arabica beans grown in Brazil's Minas Gerais region.
The 2023-2024 harvest cycle is expected to see a sharp decline, with some projections indicating a 20% drop in production.
The impact on the global market has been substantial. The International Coffee Organization (ICO) reports that coffee prices have jumped by nearly 20% in the third quarter of this year, reaching a decade-high.
On the Intercontinental Exchange (ICE), arabica futures have climbed to over €2.25 per pound from €1.62 at the start of the year, while robusta prices have increased by about 25% to over $2,000 per ton.
European consumers, who account for nearly a third of global coffee consumption, are feeling the pinch. In Germany, Europe's largest coffee market, retail prices for coffee products have risen by an average of 10% since 2022.
A European Coffee Federation (ECF) study reveals that about 65% of cafes and coffee shops across Europe have increased their prices by 5-15% since early 2023.
