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Over the past year, coffee prices have skyrocketed. The unfavorable climatic conditions in Brazil and the increase in freight prices are the main factors behind this surge.
2021 was a great year for coffee, especially for Arabica, the best-selling variety in the world, it represents 70% of world production. Its price has increased by 75% in one year, a trend that should continue in 2022: this surge is mainly due to the drop in supply.
In Brazil, the world’s largest producer and exporter, Arabica production fell 24.4% last year due to drought at the start of the year followed by a historic frost episode in July. Added to this is the negative biennial agronomic cycle of the variety, whose plants alternate between a year of good productivity and a year of lower yields. Due to intense rains, the harvest was also poor in Colombia, the world’s third largest producer. Added to the vagaries of the weather are soaring transport prices, combined with a shortage of containers which is blocking certain arrivals.
Rising prices, a breath of fresh air for small producers
Opposite, demand remains solid. But a lower supply than demand inevitably causes a sharp rise in this agricultural raw material on the markets. This price increase is a breath of fresh air for small producers, who have suffered from very low prices in recent years. Most of them have even worked at a loss.
However, according to Florent Gout, expert in the coffee sector, “smallholders are not going to reap windfall profits, as current prices are just allowing them to break even. Prices are approaching those of 2011, and small farms will therefore be able to cover the costs of their production“.
As for the final consumer, he will pay the consequences. According to Mr. Gout, in the coming months, the kilo of coffee purchased in France should increase by 2 to 3 euros in groceries, between 2 and 3 cents per cup of espresso coffee.