Climate change, political headwinds and diverging market dynamics around the world have pushed coffee prices to fresh records.
Here’s why there’s BAD news coming for COFFEE prices in South AfricaClimate change, political headwinds and diverging market dynamics around the world have pushed coffee prices to fresh records, jacking up the cost of your everyday brew or a barista’s signature macchiato.
“And then you have the disruption of the Red Sea, which means that from Southeast Asia especially towards Europe it takes much longer, because you need to circumnavigate Africa, and often you have very long delays in the ports,” said Carlos Mera, a coffee analyst at Rabobank. Nonetheless, given the recent run, “I’m thinking prices are likely or more likely to go lower than higher,” Mera said.Arabica beans, grown at higher altitudes, are at greater risk from climate change since only a few countries, notably Brazil, could move farms further uphill as the world gets hotter.In the 2024-2025 growing season around 175 million bags – 60kg each – are expected to be produced, according to the US Department of Agriculture: 56 percent arabica and 44 percent robusta.
Wherever its grown, experts say growing practices for what is at heart a forest plant need to adapt, with sufficient canopy cover to protect from both sun and storms, and multi-crop farming to protect against pests and diversify revenues.Demand has expanded beyond the traditional markets of Europe and the Americas to make inroads with tea-drinking Chinese.
Demand in Europe meanwhile slipped last year, with Germany for example seeing a one percent decrease.The industry is also keeping an eye on the growing use of weight-loss drugs such as Ozempic, as some doctors caution against drinking caffeine while on the treatment.Despite the recent price surge, millions of growers cultivating coffee on small farms still live in poverty in developing countries.
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