Declining production, climate change and attacks in the Red Sea are putting pressure on coffee prices

The rise in coffee prices is due to a decline in production, climate change and attacks in the Red Sea, Luis Lorena, secretary general of the Industrial and Commercial Coffee Association and green coffee broker, told Lusa.

Since the Covid-19 pandemic, prices for Robusta coffee, the variety most consumed by the Portuguese, have increased by more than 200% in international markets, still remaining at high levels, which is having an impact on the product sector. .

“This price increase can be attributed to traditional supply and demand factors: insufficient production in countries of origin, mainly in Central Africa and Vietnam, which has led to record low levels of global Robusta coffee supplies and higher demand from the industry,” which have “exacerbated this problem.” ”, notes AICC Secretary General Claudia Pimentel.

This “created conditions in the market for the price of Robusta coffee” to be “the highest price ever seen on the market,” continues the person in charge, remembering that climate change in producing countries is causing “a drop in production.” influences green coffee prices.

Added to this are the restrictions that “the situation in the Red Sea imposes on international trade,” where the Houthis have been attacking ships for months, leading to increased transport costs “and a very significant delay in the arrival of goods in Europe, including coffee,” adds Claudia Pimental .

Luis Lorena doesn’t see coffee prices falling anytime soon. Of the two types of existing varieties in Portugal, “70% of the coffee consumed is Robusta and 30% is Arabica, and the problem at the moment is that Robusta coffee, due to high demand and low availability throughout the world,” is increasing prices in the markets, the broker also explains.

This is due to the fact that “robosa coffee producers are producing less and less, while demand around the world is growing,” and prices are “at historical highs,” he emphasizes.

For example, Arabica is “most used in Northern Europe and Robusta in Southern Europe”, with the price of the latter increasing during Covid-19 as it was previously the most competitively priced variety.

In other words, the growth in robusta consumption, according to the green coffee broker, is due to two factors: “firstly, the pandemic and the lockdown.” [população em casa]HoReCa channel [Hotéis, Restaurantes e Cafés] closed, people went home, and since the price of this variety was lower than that of Arabica, more people began to consume it.”

Then in Northern Europe they began to change the “blends” and instead of 100% Arabica they “started adding Robusta” in percentages of 5%, 10%, 15%, which increased the consumption of this variety and, consequently, less availability in the markets, which increases prices.

Previously, he notes, the amount of Robusta used in Europe’s 27 countries “was about 39%” and Arabica 61%.

“We are now talking about 46% robusta and 54% arabica,” emphasizes Luis Lorena.

In real terms, in 2020 the roaster bought Robusta coffee “246% cheaper than now,” he emphasizes.

Moreover, there are now “fewer robusta producing countries,” with Angola becoming the world’s largest producer of this variety.

Countries around Angola, such as “Cameroon and Ivory Coast, have invested 100% in cocoa and abandoned coffee” and are left without robusta coming from there, while on the other side there are Uganda and Tanzania, which “maintain the same level , as in the past.” “.

India, which is also a producer, has “fierce domestic consumption” and “sold most of its coffee to the instant coffee industry in Asia.” Next come Vietnam and Indonesia, with the latter losing 30% of its 2023 harvest due to rain and bad weather. According to him, Vietnam also “had a difficult harvest.”

The only alternative that exists is Brazil, which produces Robusta in sufficient quantities, but “it is not very well received in Europe,” he concluded.