"I used to go to Starbucks often even though it was expensive… 'I can't even buy coffee anymore,' sighs"

 

 

The price of Arabica coffee beans has surged to its highest level in 47 years. This is attributed to factors such as the drought in Brazil, the world's largest coffee producer, and U.S. President-elect Donald Trump's emphasis on tariffs. With even the relatively cheaper Robusta beans becoming more expensive following the rise in premium Arabica beans, concerns are rising that "coffee-flation" is set to begin in earnest.

 

According to AFP and Bloomberg on the 27th (local time), Arabica coffee futures prices rose to $3.20 per pound in the New York market. This is the highest price since 1977 ($3.38), when bean production plummeted due to the so-called "black frost" on Brazilian coffee farms. Arabica bean prices have risen by approximately 70% this year alone.

Robusta beans, used for instant coffee or blending, are trading at approximately $5,200 per ton in the London market. This variety has also risen by over 80% this year. The increase in coffee bean prices is largely attributed to climate change. Prices in Brazil have surged due to growing concerns about next year's coffee harvest following this year's severe drought. In Vietnam, another major coffee bean producer, dry weather during the growing season and heavy rainfall during the harvest have also 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 European Union (EU) forest regulations and increased pre-emptive volumes in preparation for tariffs and trade disputes foreshadowed by President-elect Donald Trump.

It is predicted that price adjustments in the coffee industry will be inevitable this year due to rising coffee bean prices. Nestlé, the world's largest coffee producer, has already stated recently that it will need to raise prices and reduce packaging sizes in the future, citing the increase in bean costs.

 

Starbucks, the industry leader, also adjusted the prices of beverages, including coffee, last August for the first time in two years and seven 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. Consequently, the prices of all beverages in Grande (473ml) and Venti (591ml) sizes were raised by 300 won and 600 won, respectively.

 

Dongseo Foods, the number one player in the domestic instant coffee industry, has also joined the upward trend. Starting on the 15th, Dongseo Foods raised the prices of its coffee products, including instant coffee, coffee mixes, and coffee beverages, by an average of 8.9%. This was the first price hike since December 2022. Menu items from the low-cost coffee industry, such as The Venti and Compose Coffee, also increased in price this year by a minimum of 200 won to a maximum of about 1,000 won.

 

============

There is a Starbucks in front of my house

I go there often, but,

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

Looking at it these days, prices have gone up way too much.