- Is coffee becoming a luxury item? Worldwide, the price is already breaking records
- Coffee price hikes due to supply crisis in Vietnam
- Coffee is adored by almost the whole world, especially in Finland
Is coffee becoming a luxury item? Worldwide, the price is already breaking records
The world may be facing a new crisis as one of its most popular drinks becomes more expensive. Coffee prices have recently reached record highs and have not been this expensive for more than 40 years.
Black coffee is reported to have increased in price by more than 65% in just one year, and this is not the end of this price increase[1].
Purchase and sale transactions for robusta coffee beans, which are mainly used for espresso and instant coffee, as well as for some ground coffee blends, have risen by around 50% this year in London.
According to a report by the International Coffee Organisation, the wholesale price index for robusta beans increased by 17% in April compared to the previous month, reaching a level of USD 1.94 per pound, the highest since 1979. It is one of the most popular beans in the world and accounts for around 40% of the world's coffee consumption.
This type of coffee is not normally expensive, but is now in short supply, due to the unexpectedly hot and dry weather in the main coffee exporting countries.
As the cost of the product to coffee roasters rises, so does the consumer, who may soon find that he or she will have to pay more for coffee in cafés and shops.
Coffee price hikes due to supply crisis in Vietnam
Coffee is set to become more expensive because of a supply crisis in Vietnam, the world's biggest producer of robusta beans. The price is rising due to a poorer harvest in Vietnam and exporters are struggling to secure supplies[2].
Since the 2023-2024 harvest in October, Vietnamese robusta coffee growers have failed to deliver between 150,000 and 200,000 tonnes of contract beans, with deliveries accounting for just 10-13% of the harvest. This is due to the El Niño meteorological phenomenon, which causes a rapid and unexpected rise in global temperatures every few years.
This year, El Niño has led to warmer and drier weather across Vietnam, peaking in November and December 2023, leading to several months of drought.
Although the beans need a tropical climate to grow, daytime temperatures do not exceed 26.6 degrees Celsius under optimal coffee-growing conditions, and regular rainfall is needed to keep the soil rich.
El Niño, for example, caused the highest temperatures in the Vietnamese provinces last year, which reached 43.8 degrees Celsius.
Such heat threatens all Vietnamese coffee production. At a recent meeting of the Vietnam Coffee Association, the Swiss food and beverage conglomerate Nestle even stated that the company would have to source more beans from Brazil, Indonesia, and India to maintain supplies.
Coffee is adored by almost the whole world, especially in Finland
Coffee is one of the world's most popular beverages, appreciated for its taste, aroma and caffeine effect[3].
Coffee is made from the roasted beans of the Coffea plant, which originates from sub-Saharan Africa and isolated islands in the Indian Ocean.
However, coffee is believed to have originated in Ethiopia. Popular legend has it that Kaldi, a goat herder, discovered the potential of the coffee bean: he noticed how vigorous the goats became when they ate the berries of the coffee plant.
Later on, coffee was introduced in the Middle East, and by the 15th century, coffeehouses were already widespread throughout Turkey, Persia, Syria and the Arab world.
In Europe, coffee became established in the 16th century, and by the mid-17th century, there were over 300 coffee houses in London alone, where scientists, artists, writers, merchants, and politicians gathered for coffee and to discuss the most important scientific or political issues.
Today, coffee is grown in more than 70 tropical countries and is the world's second most exported commodity after oil.
Brazil, Vietnam, and Colombia are the world's largest coffee producers, and the Scandinavian countries have the highest coffee consumption per person per year.
The United States of America ranks only 25th in the world in terms of per capita coffee consumption. The average person in the US drinks about three cups of coffee a day.
This compares with Finland, which is the world's largest coffee consumer. The average Finn drinks almost four cups of coffee a day, and coffee is so popular in Finland that Finnish employees are legally required to take at least two 10-minute coffee breaks during the working day.
