At Finca El Puente, a coffee plantation in the mountains of southwestern Honduras, times should be thriving. The price of regular coffee has more than doubled over the past year, and specialty coffee varieties, like those grown on this farm, have long commanded premium prices. These varieties are cherished for their rich, aromatic flavors, enjoyed by coffee drinkers from Seattle to Seoul.
However, despite rising prices, coffee producers are facing growing challenges. The costs of production have surged. Farmers are paying higher wages to attract workers in a labor-scarce market, while the cost of fertilizers has increased. The harvest has also been damaged by unpredictable weather, including heavy rains and extreme temperatures. Even with higher prices, many farmers are likely to earn less this year than they did last.
The future looks even more uncertain. One major concern is climate change, which is affecting coffee production worldwide. Rising temperatures, droughts, and unpredictable weather patterns—especially in major coffee-producing countries like Brazil and Vietnam—are reducing the global coffee supply, pushing prices up.
According to World Coffee Research, about 60% of the world’s coffee is produced by 12.5 million smallholder farmers, most of whom work on farms no larger than 50 acres. Of these farmers, 44% live below the World Bank’s poverty line. Much like how the pandemic disrupted global supply chains for essential goods, rising coffee prices are highlighting the challenges faced by those producing the world’s coffee.
Around the world, traders typically lock in coffee supplies months or even years in advance using futures contracts, creating a complex system for securing beans that may not reflect the current struggles of farmers.
Related topics:
- Coffee Prices Drop Amid Rising Inventories and Supply Concerns
- Bengaluru’s Filter Coffee Prices to Rise as Coffee Powder Costs Surge
- Coffee Prices in Kosovo Reach Highest Increase in a Decade