Robusta coffee futures in London reached $4,844 per ton on July 9th, marking a
~70% increase over the past year and the highest level in 13 years due to poor
harvests in major coffee-producing countries in Southeast Asia.
With coffee prices on supermarket shelves in the UK already up by ~15% this year,
Giuseppe Lavazza, chairman of Italy’s Lavazza Group, warns that prices could rise
by a further 10% next year. This is due to a combination of factors, including
higher raw material costs, longer shipping routes to avoid conflicts in the Red
Sea, and more recently, the impact of climate change on robusta production in
key countries like Vietnam and Indonesia.
“Coffee prices will not go down and will remain very high. The coffee chain is
under a lot of pressure,” said Lavazza, adding that roasters like Lavazza have
been forced to raise prices and reduce profit margins.
While the industry is accustomed to volatile prices for high-quality arabica
beans, with New York futures at their highest since September 2022, the recent
surge in robusta prices is unprecedented and poses more problems for the
industry. Robusta beans are used in espresso and instant coffee, and with
supply tightening and prices rising, hedge funds and other speculators are
piling into the market, further driving up futures prices.
Vietnam’s export coffee prices have surged since the beginning of 2024,
reaching $4,593 per ton in June, while production has also been
gradually decreasing.
Domestic coffee prices in Vietnam are currently ranging from 123,500 to
124,600 VND/kg, with the highest price recorded in the province of Đắk
Nông. The country’s coffee supply is facing a shortage, and with
speculators starting to hoard beans, prices are expected to continue
climbing in the third quarter. This, coupled with reduced production in
other major exporting countries due to adverse weather conditions, is
likely to keep coffee prices elevated in the foreseeable future, according
to the Vietnam Coffee-Cocoa Association (VICOFA).
These factors are expected to bring joy to coffee farmers, especially
when compared to the low prices of 30,000-40,000 VND/kg in previous
years. With prices now tripled, many farmers are investing in fertilizers,
renovating their farms, and expanding their cultivation areas to increase
production.
Coffee and pepper prices soar, continuously breaking new records
With a decrease in cultivation area and low production, the price of coffee has been affected, while black pepper prices continue to rise.
India’s rice prices reach an all-time high
The price of India’s top 5% broken rice, a leading exporter, has reached a new record high this week due to limited supply and slight improvement in demand. Meanwhile, the price of Vietnamese rice has decreased as reserves have increased.
Coffee prices rise, farmers rejoice, businesses worry.
Since the beginning of the coffee season 2023-2024, coffee prices have been soaring and consistently maintained at over 80,000 VND /kg. Alongside the joy of a fruitful harvest and good prices, coffee growers are facing concerns within the industry.
