Coffee Supply Chain Turmoil Could Push Prices Even Higher

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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.

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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. 

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Luka Marjanovic

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Luka holds a Bachelor’s in International Business and a Master’s in International Management. During his undergraduate studies he worked as a research assistant in the field of Big Data; founded his own consulting firm providing services to local SME's in various sectors and invested in the capital markets; as well as working pro-bono providing education and career counselling. Prior to his business education, he studied Biology-and-Biotechnology, and served in the Danish Royal Army as Second Sergeant, leading and managing a group under extreme conditions and pressure. Luka has spent significant time abroad, living and working in seven different countries. When he's not in the office, he's chasing the next gusts windsurfing, carving the mountain snowboarding or out in the forest for a jog.