Coffee prices have never been higher in half a century. Between galloping inflation and climate threats, discover the underside of a market under high tension which impacts fans of the little black as much as the giants…
Coffee lovers, hold on to your cups! Prices for your favorite drink have reached record levels, not seen in almost half a century. Both Arabica and Robusta, prices are soaring on world markets, easily exceeding $7,000 per tonne for the first and approaching $5,000 for the second. A situation which puts pressure on the entire sector, from producers to consumers. So what explains this spectacular surge? A look behind the scenes of a bustling market.
The explosive cocktail effect: climate, harvests and speculation
Several factors combine to propel coffee prices to new heights. Firstly, global warming and its deleterious consequences on harvests. Droughts, frosts, hurricanes… Extreme weather hazards are increasing in major producing regions such as Brazil or Colombia, causing significant losses and a shortage of supply.
Corollary of this shortage, speculation runs wild on the markets. Investment funds and traders bet on the rise, artificially boosting prices. A dangerous game which accentuates price volatility and further weakens small producers.
The large agro-industrial groups pull the strings and line their pockets on the backs of the planters who toil for pitiful incomes.
A coffee market analyst on condition of anonymity
Towards a coffee shortage?
Faced with pressure on prices, some are already predicting a shortage in the medium term. With ever-increasing production costs and eroding profitability, many coffee growers could be tempted to abandon this crop which has become hazardous.
A credible hypothesis according to certain experts who point out the limits of a productivist model that is running out of steam. For them, only one in-depth overhaul of the sectorwith better remuneration for producers and more sustainable practices, will be able to stem the predicted crisis.
The roasters’ conundrum
In this stormy context, roasters are on the front line. Caught between soaring prices and consumer pressure, coffee manufacturers are playing a perilous balancing act to preserve their margins without causing shelf prices to explode.
For the moment, giants like Nestlé or Lavazza are gritting their teeth by cutting back on their profits. But if the increase continues, the additional cost will have to be passed on to the labels. Enough to boost sales in an already mature market. The specter of a scenario like Cafés Legal, a legendary brand recently liquidated, cannot be ruled out.
Change our consumption habits?
Therefore, it is perhaps on the consumer side that we must look for solutions. Favor quality over quantity, opt for certified fair trade coffees, support small roasters engaged in responsible sectors… So many ways to reconcile pleasure and ethics without breaking the bank.
A change in mentalities already at work among a growing share of enlightened amateurs. But which will have to accelerate and become widespread to really weigh against the behemoths of the industry. Because in the end, it is our consumption choices that will determine the future of coffee. To meditate on tomorrow in front of our morning coffee…
Coffee, the future big loser from global warming?
Beyond the immediate economic issues, the current crisis above all reveals the vulnerability of the coffee sector to the great challenge of global warming. With one more degree, they are 50% of arable land that could disappear by 2050 according to the most alarmist projections.
A disaster scenario that would require a fundamental rethinking of the geography and methods of coffee production. Already, the race towards high altitude lands is underway, from the Andean foothills to the Ethiopian highlands. A headlong rush which can only be temporary without a global challenge to the model.
Coffee is the canary in the mine of climate change. Its capacity to adapt will be decisive for the survival of the entire sector.
An expert in sustainable development in the coffee sector
Agroforestry, permaculture, more resistant varieties… Alternatives exist to build a sustainable future for coffee. We still need a collective will, from producers to consumers including manufacturers, to trigger the change. A vast project which goes far beyond the sole issue of a 2 euro espresso.
The entire coffee ecosystem, with its millions of jobs and fragile social balances, is facing a moment of truth. The galloping inflation of recent months has had the merit of revealing the gaping flaws of a sector at a crossroads. It is up to players in the sector to seize this alarm signal to accelerate the transition. Our morning cup depends on it. Think about it tomorrow while enjoying your little black!
