For the past three or four years, any cafe regular would have noticed the drip-drip adding of a few more cents every few months to the price of a coffee.
Those morning espressos and lattes could be set to get even more expensive following a recent all-time price high for arabica beans, which are used in ground coffee, following drought in Brazil, the world’s biggest supplier nation.
At the same time, supplies of robusta, the type of bean typically used to make instant, are down due to reduced harvests in Vietnam after some farmers switched to growing durian, the famously pungent “king of fruits,” to meet demand in the colossal Chinese market.
“Unit values for Vietnamese coffee have been overtaken by those of durians over recent years,” according to BMI – A Fitch Solutions Company, a shift that is “encouraging cultivation of durian.”
The South-east Asian country’s coffee exports, the world’s second biggest after Brazil’s, fell by around 17% last year as some growers focused on durian and as some harvests were hit by storms.
According to BMI, “the growing importance of durian production in Vietnam” could be seen “as a risk for coffee production” in the country.
Noting that the latest record prices followed a 90%-surge last year, analysts at Rabobank, a Dutch lender, pointed out that costs have been pushed up by war in the Middle East, with commodity-carrying ships having to circumnavigate Africa rather than take the much shorter Red Sea and Suez Canal routes.
And growing Chinese demand – not only for durian, but for coffee – is forcing prices up as supplies remain tight, with the country importing more than twice as much coffee by volume last year compared to 2021.
Coffee prices are worsening food price inflation for shoppers across Europe. According to Helen Dickinson, chief executive of the British Retail Consortium, February saw “price hikes” for breakfast items such as butter, cheese, eggs, bread and cereals price hikes.
“Climbing global coffee prices could threaten to push the morning costs higher in the coming months,” Dickinson warned.
