Arabica coffee bean prices have surged to their highest level in 47 years. This is due to drought in Brazil, the world's largest coffee producer, and the tariff-focused policies of Donald Trump, the U.S. President-elect. Concerns are rising that the 'coffee inflation' will intensify as even the relatively cheaper Robusta beans become more expensive following the premium Arabica beans.

 

On the 27th (local time), according to AFP, Bloomberg News, and others, Arabica coffee futures prices rose to $3.20 per pound in New York. This is the highest price since 1977 ($3.38) when coffee bean production sharply declined due to the so-called 'black frost' at Brazilian coffee plantations. Arabica bean prices have increased by approximately 70% so far this year.

The Robusta variety used in instant coffee and blending is traded at approximately $5,200 per ton in the London market. This variety has also increased by over 80% this year. The rise in coffee bean prices is largely due to climate change. In Brazil, a severe drought this year has raised concerns about next year's coffee harvest, causing prices to surge. In Vietnam, another major coffee-producing country, dry weather during the cultivation period and heavy rains during the harvest season have disrupted the supply of beans.

 

Carlos Mera, an analyst at Rabobank, explained that prices were affected not only by concerns about Brazil's supply next year but also by EU forest regulations, and by preemptive stock increases in anticipation of tariffs and trade disputes announced by Donald Trump, the presidential candidate.

It is predicted that due to the rise in coffee bean prices this year, price adjustments in the coffee industry will be unavoidable. Already, Nestlé, the world's largest coffee producer, recently stated that due to the increase in coffee bean prices, they will need to raise coffee prices and reduce packaging sizes in the future.

 

Even Starbucks, the industry leader, adjusted the prices of coffee and other beverages last August for the first time in 2 years and 7 months. As of July 30, when Starbucks announced the price adjustment, the price of Arabica beans traded on the New York market was $5,088.22 per ton, a 40.2% increase compared to the same period last year. In response, the prices of all beverages' Grande (473ml) and Venti (591ml) sizes were raised by 300 won and 600 won, respectively.

 

Dongseo Food, the leading instant coffee company in Korea, has joined the upward trend. Since the 15th, Dongseo Food has increased the prices of coffee products, including instant coffee, coffee mixes, and coffee beverages, by an average of 8.9%. This was the first price increase since December 2022. Budget coffee chains such as The Venti and Compose Coffee also raised their menu prices by at least 200 won and up to approximately 1,000 won this year.

 

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Because it's in front of my house, Starbucks.

I go there often, but

It's a cafe I've been going to for a really long time.

Lately, it seems that prices have increased way too much.