The coffee market is currently experiencing an interesting set of events that bring along short and long-term consequences with them.
Global shortage of shipping containers caused by the pandemic has led to tight coffee supply and sent retail prices surging.
Brazil may lose 4% or more of its 2022 coffee crop due to particularly tough frost events affecting one-third of all fields, mainly arabica.
Brazil’s coffee fields (mainly arabica) have also been struck by a once-in-a-century drought adding to the supply and price pressure.
Latest, Vietnam has been put under total lockdown contributing further to the already tight freight squeeze as it is a major port hub and to the coffee supply shortage as it is a major producer of robusta coffee beans.
So far this year wholesale robusta and arabica bean prices have risen by about 35%, according to World Bank data.
That is very likely only to further increase; in the short term, as a consequence of supply chain disruption; and in the long term, as a consequence of Brazil’s failed crops.
