In the next few months, the price of coffee around the world may increase significantly. In Brazil, the world’s largest producer of coffee, the price of the product will increase as the drought and snow greatly reduce production. The Wall Street Journal reported such information in a report.
The price of coffee in the world market increased by almost 90 percent last year due to adverse weather conditions. That price reached a 10-year high in February this year. At that time, the price of a coffee per pound stood at 2.59 dollars.
The yield of coffee in Brazil has decreased in this season as well. A similar situation occurred in another major coffee producer, Colombia. Coffee production has also declined in Brazil’s neighboring country. Along with this, increasing the cost of fertilizer and transportation is affecting the price of coffee. The Wall Street Journal reports that some farms in Brazil-Colombia will reduce the yield by at least 50 percent this year.
“This is a big crisis for us,” said Marcos Magalhaes, president of Brazil’s Minasul Coffee Cooperative. Our association has more than 9 thousand members. The amount of coffee produced by them has dropped by half.
Market analysts had earlier said that around 48.7 million bags of Arabica coffee could be produced this year. Each bag contains 132 pounds of coffee. But that perception changed towards the end of the season. Now according to the country’s government, only 35.7 million bags of coffee can be produced this year.
According to the International Coffee Organization, global coffee consumption will increase by the end of the year. As yields are low, demand for coffee may outstrip supply during this time. All in all, coffee prices are likely to hit record highs in the next few months.
According to the Wall Street Journal, household costs in the United States have already increased due to Corona. And in the context of the Russia-Ukraine war, that cost has increased. Now the consumers of the country will be under pressure due to the increased price of coffee.