Coffee prices in Europe have surged to record highs, driven by a confluence of factors including the Houthi rebels’ disruption of shipping routes, the war in Ukraine’s impact on fertilizer and energy costs, climate change’s adverse effects on coffee production, and new EU regulations aimed at combating deforestation. While the situation is challenging, there is hope for a moderation in prices in the medium term, but the long-term outlook remains uncertain due to climate change’s ongoing threat.
A supply crunch of robusta coffee beans in Vietnam, the world’s leading producer, has driven up prices by 50% in London this year. Weaker harvests due to El Niño-induced drought have led to a shortage of beans, which is impacting exporters and pushing up costs for consumers. Some experts predict prices could reach $5.89 per kilogram, translating to higher coffee shop prices. As Vietnam struggles to meet demand, coffee companies are forced to source beans from other countries to maintain supply.
