as drought threatens crops, prices soar

What to remember:

• Like orange juice and cocoa, coffee has seen its price explode in recent months. In commodity markets, the cost of arabica has increased by 80% in 2024, while robusta has seen an increase of almost 70% since the start of the year.
• On supermarket shelves, coffee had already gained a few cents more due to inflation and the energy crisis: labels would show an average increase of +32% over the last three years. Following the difficulties linked to the 2024 harvest, coffee brands, such as Nestlé, Malongo or Lavazza, are anticipating a new increase which could range from 10 to 25%. The size of the products could also be readjusted.
• Several reasons are given, starting with climate change. Two countries among the main producers of coffee beans, Brazil and Vietnam, suffered significant droughts this year which damaged the harvests. But while production fell, demand increased, notably under the effect of the European anti-deforestation law, the entry into force of which was ultimately postponed.
• A phenomenon which questions the sustainability of the sector. “We have never been more confronted than this year with the concrete effect of climate change on coffee cultivation. If nothing is done, it is estimated that half of the cultivated land will no longer be usable in 2050, while demand continues to increase,” worries Andrea Illy, president of the Illy Caffè group, to Les Echos.
• Faced with these hazards, which are expected to increase in the years to come, the G7 countries have announced the creation of a global fund to support and support the adaptation of players in the sector. Initially, it will be allocated to five African states, before being deployed more widely.