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Written by Jorg Snoeck
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Coffee prices are skyrocketing

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Food9 July, 2021

International coffee prices are at their highest level in four years. This is due to the drought in Brazil, although economic and political factors also play a role.

 

Failed harvest

Compared to a year ago, the price of green coffee beans has risen by 70%. On the international market, a pound of coffee beans costs 1.5 dollars this week, writes business newspaper De Tijd.

 

The enormous price increase is in the first place a consequence of the drought in Brazil, the world’s largest coffee producer. As a result, the harvest failed and the yield was almost a third lower than normal. In Colombia, too, the weather played tricks on the coffee producers. Moreover, the country was plagued by social unrest, which resulted in fierce protests against the government.

 

Transport

In addition to these ‘local problems’, international transport has also become more expensive. Prices for sea containers are up to ten times higher than a year ago. The revival of the economy after the corona crisis has strongly stimulated the demand for containers again.

 

This has not led to a general increase in prices for coffee sellers, although American doughnut and coffee chain Dunkin’ has adjusted its prices accordingly. German coffee chain Tschibo also raised its prices significantly.

 

Protected

However, most large coffee producers are waiting and will not raise their prices for the time being, because they work with long-term contracts and are therefore protected against price fluctuations. “We work with contracts of one to three months,” says Frans Van Tilborg, Miko‘s CEO. “We see that prices are rising here and there. We are not raising prices for the time being, but are looking at whether we should do so soon.”

 

Beyers Koffie, which produces coffee for Lidl, Amazon and Aldi among others, also hopes that price increases will not be necessary. “It is perfectly normal that production goes up and down in Brazil. There is a harvest twice a year. A contraction or growth of 10 to 20% is normal,” says top executive Marco Ciaramelli. The next harvest in the autumn must be good, otherwise price increases will undoubtedly follow in stores.

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