The BBC reports that the price of coffee on international commodity markets has hit its highest level on record.
Arabica beans have jumped over 80% this year, while Robusta beans hit a new high in September.
Coffee traders expect crops to shrink after Vietnam and particularly Brazil, the world’s biggest producers, have experienced both drought and heavy rainfall.
Demand, meanwhile, is higher than ever, and shows no signs of stopping. Coffee is the world’s second most traded commodity by volume after crude oil. The last record high for coffee was set in 1977 after unusual snowfall devastated plantations in Brazil.
Vinh Nguyen, chief executive of Tuan Loc Commodities, explains: “Brands like JDE Peet (the owner of the Douwe Egberts brand), Nestlé and all that, have [previously] taken the hit from higher raw material prices to themselves […] But right now they are almost at a tipping point. A lot of them are mulling a price increase in supermarkets in [the first quarter] of 2025.”
Lavazza, too, says it did all it could to protect its market share and not pass on higher raw material costs to customers, but new prices have created an inevitable situation.
“Quality is paramount for us and has always been the cornerstone of our contract of trust with consumers,” Lavazza told BBC.
Nestle said much the same.
