Coffee prices have run up so much, it has been happening since the month of July and every month, every week, we are seeing the coffee prices inching up.
The major producers are Colombia, Vietnam and Brazil, all of these have production or transportation concerns when it comes to coffee and that’s why, you have the Arabica coffee trading at 7-year highs and Robusta trading at a 4-year high. The Arabica coffee prices are up by nearly 50 percent in the current 2021 year itself.
Starting with Brazil, we are looking at lower coffee crop, in fact, it’s the lowest in the last two decades. Around 40 percent of coffee crop comes in from Brazil and that is exactly where the concerns are coming from. The Brazil coffee harvest is set to pose the biggest yearly decline since 2003, as per what the markets are anticipating and coffee consumption globally is expected to be at 2017-high. So everywhere, you see the numbers stacking up on the stronger side for coffee.
There’s also a report from International Coffee Organisation, which says that the coffee exports in the last season, that is during October to September, have increased by nearly 2.50 percent and that tells you that the global coffee demand continues to be on the higher side.
There is another report from US Department of Agriculture, which says that the cold coffee production for 2021-22 is expected to see a deficit of around 11 million bags, 164.8 million bags is what they are putting the global crop at and the expectations being that Brazil could be looking at worst weather and the impact on the coffee crop could be seen for the next couple of years as well.