Wholesale coffee prices hit record highs in the midst of the Trump administration’s deportation and tariff dispute with Colombia. But coffee prices have already been trading near 50-year highs for a while as a result of shortages related to extreme weather and increased global demand.
In recent years, repeated droughts and flooding have put pressure on the global supply of coffee. These climate swings have caused prices to soar, much as they have for other staples like cocoa, olive oil, and orange juice. All the while, the global demand for coffee has kept rising.
Coffee is one of the world’s most consumed beverages, but it can be grown only under very specific conditions, namely in misty, humid, and tropical climates, and in rich soil free of disease. The United States imports nearly all of its coffee – there is only a small amount grown in Hawaii. Otherwise, the US is the world’s largest coffee importer. With a limited number of sources for the beans, global coffee prices are very susceptible to the effects of extreme weather.
More than half of the world’s coffee production comes from arabica beans, and Brazil is the largest exporter. A severe drought there this summer devastated the harvest that typically runs from May to September. In Vietnam, a severe drought followed by heavy rains harmed the world’s largest source of robusta, the second most popular coffee variety.
People tend to think of coffee as a commodity and not so much as an agricultural product, subject to the vagaries of weather and having prices that fluctuate accordingly. The bottom line is that drinking coffee is likely to become a bigger strain on one’s own bottom line.
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Why Coffee Prices Are Soaring (Again)
Photo, posted October 13, 2023, courtesy of Pete via Flickr.
Earth Wise is a production of WAMC Northeast Public Radio
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