Nigeria is grappling with the effects of a severe global coffee crisis, marked by a dramatic rise in futures prices due to significant supply disruptions in Brazil, the world’s largest producer of Arabica coffee. As a result, coffee prices in Nigeria have more than doubled in 2024, severely impacting local consumers and businesses.
Price Surge in Nigeria
In Nigeria, the cost of coffee has surged, with well-known brands such as Nescafe and TopCafe experiencing substantial price hikes. For instance, the price of “Nescafe 3-in-1” has surged to N34,000 per carton as of August, a considerable increase from N28,000 in May and a dramatic rise from N18,000 just a year ago.
Global Supply Disruptions
The crisis stems from a severe drought in Brazil that began in April 2024, leading to a sharp reduction in coffee production. As the world’s largest producer of Arabica coffee, Brazil’s production decline has triggered a global scramble to secure limited coffee supplies. This situation has propelled coffee futures prices to unprecedented levels.
Futures Prices on the Rise
Coffee futures have seen a dramatic surge, with U.S. Coffee Futures and Arabica Futures both rising by more than 30 percent in 2024. This significant increase in futures prices has had a ripple effect across global markets, with Nigeria being no exception.
Impact on Nigerian Markets
The rise in coffee prices is impacting Nigerian markets, driving up costs for consumers and businesses alike. The shortage of coffee supplies has led to heightened prices for both retail and wholesale coffee products, causing a strain on both local vendors and coffee drinkers.
Conclusion
The global coffee crisis, triggered by severe drought conditions in Brazil, has resulted in soaring coffee futures prices and a steep increase in coffee costs in Nigeria. As the market continues to navigate these disruptions, both consumers and businesses are feeling the financial impact of the ongoing crisis.