Coffee market prices reach peak madness

Photo credits: Capricornio - This Side Up Coffees

Of course we don't hear otherwise... Extreme inflation, unsustainable situations and support packages from the government. Is a crisis coming or are we already in it? In coffee country it is also quite noisy.

In December last year we already shared with you the reasons for the higher coffee prices. And as much as we would like it, we cannot escape it this year either…

The prices will be increased again, because the purchase prices have become sky-high.

But what are the reasons for the price increase? Partly the same as last year, and partly not.

Scarcity due to climate change

Scarcity is still a big factor. Due to climate change, many harvests have failed, while the global demand for coffee is only increasing. Our con-colleague Boot coffee explains this very well:

“More extreme weather conditions such as: abundant rainfall, many periods of drought, heat and frost threaten the coffee plants and therefore the harvests. Drought can damage the ripening fruit, resulting in the beans becoming twisted, undersized, or otherwise not fully formed. Meanwhile, too much rain during the delicate flowering phase can damage the flowers and hinder fruit development. No flowers means no coffee berries.”

The expensive dollar

In coffee country everything is about dollars. That in itself is very nice, nice and clear of course. But for us this now means that the coffee is extra expensive for us in euros. Suppose a kilo of green coffee costs us $10 - this would amount to €8.20 on January 1, 2021 and today it is about €10.40.

This, in combination with the already rising coffee prices due to the first point, means that what we pay in the Netherlands are often record prices compared to the past.

For example, we pay up to 125% more for some coffees compared to 2 years ago, and that is quite apart from our own increased business costs such as gas and parcel services.

Random matters

There are of course many more things that come into play. For example, we learned that the war in Ukraine has an influence because many fertilizers come from there, which were used in Colombia for coffee cultivation, among other things.

The high oil prices have their share and our own business expenses are also rising sharply.

For example, we pay a fuel surcharge to our delivery partners and we are faced with a significant price increase for gas (to roast coffee ) and packaging material.

Of course we cannot look into your wallet, respect for everyone's choice, but perhaps it is nice to know that in practice the price increase amounts to approximately € 0.02-0.04 per cup of coffee, depending on the type of coffee and the brewing method .

Below is a nice table from ICO: International Coffee Organization, in which you can clearly see what the price of coffee has done in recent years.