The Rising Cost of Coffee
I am writing this article as I drink a cup of freshly made, pour-over coffee, origin Brazil. Coffee is grown in more than 50 countries, according to the U.S.-based National Coffee Association, and Brazil is the top producer worldwide.
Around 6.7 million acres of coffee bushes are spread across the country, which produced 63.4 million 60-kilogram bags of coffee in 2020, according to the World Economic Forum (WEF).
The economies of Brazil and other producers, like Vietnam and small African nations, depend on consumers like you and me — especially those of us who want a multicultural start to the day. The WEF reports that coffee is the third most popular drink, after water and tea.
While it makes sense that coffee is cheaper to brew at home, most of us can’t resist the lure and enticing fragrance of trendy, cozy (insert an adjective here) coffee shops and their fancy drinks. But that coffee shop cup of joe — which some of us indulge in on a daily or even more often basis — is going to start taking an even bigger chunk of cash.
Supply chain disruption, from production challenges to bad weather and drought to sustainable growing practices, is negatively impacting prices, and the increased costs are being passed to the consumer. A July Bloomberg article states, “Up and down the supply chain, sellers have been raising prices and scrapping discounts to protect their margins, and many warn of more increases ahead.”
The price of coffee-related goodies and flavorings also is rising. Do you enjoy a caffè mocha with a drizzle of chocolate syrup over a mound of whipped cream? Chocolate experienced its own price renaissance earlier this year; a May article in The New York Times detailed the price jump from the relatively stable US$2,500 a metric ton to $11,000 a metric ton in mid-April.
Failed crops and financial speculation fueled the increase; as of Monday (September 2), cocoa was about $9,628 per ton, according to Trading Economics. Investopedia reported in February that chocolate prices were up 10 percent year over year.
Aside from Kona coffee grown in Hawaii, the coffee beans used in the U.S. come from other countries. The U.S. Bureau of Labor Statistics (BLS) reports that the U.S. accounted for 15 percent, on average, of global coffee imports from 2007-19, with a decline to 13.3 percent 2019-2020.
“In terms of quantity of coffee, the seemingly slight decrease in import shares reduced the coffee imported by the United States in 2020 by 184,707.7 tons, or 10.6 percent,” the BLS states. The main cause? COVID-19 and resulting supply chain disruption.
According to the BLS, using U.S. Census Bureau data, in 2021, amid the pandemic, container shipping issues and increase coffee prices, 32 percent of the coffee imported to the U.S. was from Brazil; Colombia; 20 percent, Vietnam, 10 percent; Honduras, 7 percent; Guatemala, 6 percent; and Nicaragua and Indonesia, 4 percent each. The remaining 17 percent was spread among 100 countries.
The last few swallows of my coffee are cold, no matter. I can always make another. Or I might go invest in an iced caffe mocha made with Colombian beans. The drizzle of chocolate is calling my name.
(Photo credit: Getty Images/Graypink)