Coffee prices are set to rise around the world, due to a poor coffee crop yield in Brazil, one of the world’s largest producers.
Last year, coffee futures surged almost 90% due to drought and frost impacting Brazilian production. Coffee prices then hit a decade high in February, reaching $2.59 per lb. They still remain higher, up 18.06% year on year, at roughly $2.23 per pound.
Because coffee harvesting in Brazil is done bi-yearly, off two varieties, with farmers harvesting more Arabica in even harvested years, and more Robusta in odd numbered years, it is expected there will be more price increases. Extreme weather in 2021 has produced expectations this year’s harvest will be low. In addition costs for fertilizers and fuel for transportation will inflate prices even more.
On top of the conditions in Brazil, word has come out that Colombia, another major producer, experienced wetter than normal weather, reducing their harvest as well. An analysis by the Wall Street Journal estimated harvests on some farms will be as low as 50% of normal.
The International Coffee Organization predicted in its July report, that global coffee consumption will outpace production by the end of the year, and that, along with the falling yield, will propel coffee prices to record-setting highs.