With the drought and fires in Brazil and international tensions, the price of coffee is likely to increase soon. The reasons are diverse and the repercussions will be just as diverse. What will be your alternative if coffee becomes too expensive?
Tl;dr
- The price of coffee will rise because of drought and fires in Brazil.
- International tensions also have an impact on the cost of coffee.
- Consumers will feel the impact of these increases.
The cost of coffee is rising
Dear coffee lovers, prepare to pay a little more for your favorite drink. Indeed, the drought and fires that hit Brazil, the largest coffee producer in the world, have pushed arabica prices to peaks not seen in fifty years.
A Brazil in the grip of flames and drought
Brazil has witnessed several devastating fires and unprecedented drought this summer, severely affecting its coffee harvest. Experts attribute these extreme conditions in part to global warming. Arabica pound hits record 320.10 cents in New Yorka level unmatched since 1977.
The coffee trees, already weakened by the long period of drought and heat, benefited from significant rains in October, leading to exceptional flowering. However, the uncertainty surrounding how this flowering will unfold raises concerns about the 2025/26 harvest.
Instability and international tensions
In addition to unfavorable weather conditions, geopolitical tensions, such as shipping disruptions in the Red Sea, the increase in US customs duties promised by Donald Trump and the future European Union regulation on deforestation, are also contributing to the rising coffee prices.
Faced with this uncertainty, farmers are limiting their sales, which further reduces supply on the local market. This situation also affects Vietnam, the main producer of robusta, a cheaper variety of coffee.
Consumers pay the price
Consumers will not be spared from this price increase. Coffee sales giants, like Nestlé, will indeed pass these increases on to their customers. Nestlé already announced in November that it would increase prices and reduce the size of its sachetsdue to the erosion of its margins.
Some consumers, however, don’t seem ready to give up their daily dose of caffeine, despite rising prices. For them, coffee remains a sacred pleasure, regardless of the cost.
