Coffee prices up. Experts point out the main reasons

Luc Williams

Climate change and coffee prices

According to Krzysiek Rzyman, co-author of the guide to Polish cafes, and Jakub Jakubczak, an analyst at BNP Paribas bank, climate change has a negative impact on coffee plantations.

“A demanding variety, such as Arabica, will lose popularity in favor of less demanding varieties, such as Robusta or Liberica,” Rzyman told PAP.

Jakub Jakubczak thinks similarly. In his opinion, the prestigious position of Arabica will be lost to Robusta, as shown by prices on the stock exchange. Jakubczak added that the unpredictability of weather caused by climate change determines prices on the entire food market.

According to Roman, the consequences climate change are a significant problem both for coffee consumers from the point of view of prices, as well as from the point of view of ethics, because coffee farmers may lose their jobs as a result of the changes. “A month and a half ago I was on a coffee plantation in Indonesia and these people told me directly that they don't know if they will have a job in 5 years,” he added.

European law

Another issue that will particularly affect the European coffee market is EUDR (European Union Deforestation Regulation) – a law that requires producers to prove that there has been no deforestation in the growing area. The analyst said that price increases in Europe for this reason are certain, but at the moment it is difficult to predict at what level. When asked about EUDR, the co-author of the guide said that the premise of preventing deforestation is correct, but technical issues can be an obstacle for many producers. In his opinion, in many producer regions the issue of determining whether deforestation has occurred will be difficult, which will undoubtedly affect the profits of small growers.

“From the perspective of European countries, responsibility should be taken for this, because the growers were growing coffee because the demand for it was growing, and now if, due to poorly created law, we cut off these growers from the profit, it seems unethical to me,” he commented.

The popularity of coffee

Another reason for the increase in coffee prices is the increase in its popularity in Africa and China, which Jakubczak and Rzyman described as “unprecedented” so far. In China, there has been a rapid increase in the number of coffee shops, including global chains such as Starbucks. According to experts, the Chinese market will have a major impact on both prices and trends among manufacturers.

As Rzyman noted, the Chinese even started growing their own coffee. According to the BNP Paribas analyst, the industry should pay attention to this, as China has repeatedly proven its potential in production. However, the chances of exporting coffee from Chinese crops to other markets are currently difficult to predict, he noted.

Grain coffee

The Agronomist portal reports that a startup has been established in Singapore that intends to make coffee from grain products. According to Jakubczak, this may be the answer rising coffee prices, noting that if such a product has the taste of coffee, it may be a cheaper alternative to instant coffee.

However, Rzyman does not believe that such a product poses a threat to coffees from the “premium” sector. “From the lovers' point of view, there is only one coffee, but such a product can find its audience among mass customers who buy coffee in large supermarkets,” he said in an interview. (PAP)


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