Coffee lovers are in for a costly few months. For the fourth consecutive year, global coffee consumption in 2024 has surpassed supply, draining reserves and driving up costs on international markets.
In February, the price of green coffee hit a record high of $4.38 per pound (0.45 kg), and experts warn that prices could continue to rise, potentially reaching $5.50 or even $10 per pound.
Several factors are contributing to the global coffee shortage. Climate change has severely impacted harvests in Brazil and Vietnam, which together account for over 50% of global coffee exports.
Additionally, decades of deforestation, monocropping, and the overuse of fertilizers and pesticides have damaged soils, leaving them vulnerable to extreme weather events like droughts and heavy rainfall.
Another key issue is the long-term suppression of raw coffee prices, which have remained low since the 1970s. This has led to poor wages for coffee pickers, who are becoming increasingly scarce, and farmers have struggled to make a sustainable living from coffee production.
Further strain on the industry comes from ongoing supply chain disruptions since the Covid-19 pandemic, the potential for new tariffs, and mounting pressure on low-margin producers.
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