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Will There Be An Increase In The Price Of Coffee?

The worst frosts in decades in the world’s largest coffee maker, Brazil, and record high transport costs due to shipping delays due to the Covid-19 pandemic in the next few weeks, will result in rising coffee prices to a record high in recent years. analysts.

The increase in coffee prices will further increase the price of a basket of basic food products, since bread, vegetable oils and sugar have already been collected. The UN Food and Drug Administration index, which tracks world food prices in July, rose 31 percent from the same month last year, at a time when many consumers are still struggling financially over the pandemic.

Brazil’s worst ice since 1994 has pushed roasted coffee prices to a seven-year high, with the burden shifting to consumers buying roasted or ground coffee in supermarkets.

The price of Arabica futures in the US market has doubled in the last 12 months, and Brazilian culture is now hit by the worst drought in 91 years. The extent of the damage is still being determined, but in areas where coffee trees have not survived, it will take seven years for production to fully recover.

Global supply disruptions, driven by rising demand for consumer goods after the pandemic and insufficient availability of ships, have also led to a sharp rise in prices for transporting coffee to major consumer countries in North America and Europe.

Traders believe that consumers will soon pay a higher price for coffee in stores, while the cost of coffee in cafes may not follow this trend in the short term.

“Roasted and ground coffee in the shops is just packaged coffee. “But your cup of coffee at Starbucks may not be as expensive because you pay more for coffee, wi-fi and experience,” says one coffee seller.

The latest data from the US Bureau of Statistics show that in April the average price of ground coffee was $ 4.75 per pound, which is 8.1 percent more than the previous year and is the highest level since July 2015.

Brazilian coffee maker Abic estimates that prices for roasted coffee in Brazil jumped by about 80 percent between December and the end of July.

“Some companies, including market leaders, have already announced price increases,” reads a letter from Abic sent to coffee grinders.

By the way, Brazil is responsible for 30 percent of total world coffee exports.