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Title: Why are coffee prices soaring in the U.S.?
Coffee lovers, beware! The recent surge in wholesale arabica bean prices has pushed the retail price of ground coffee to an all-time high of $7 a pound. This dramatic increase is not just a passing trend; the cost of your morning cuppa joe is expected to continue its upward trajectory.
In January 2020, the average price of ground coffee was a mere $4 per pound. Fast forward three years and it’s now a staggering $7 – an increase of 75%! And if you’re still getting used to these prices, hold on to your wallet, because experts predict that bean prices could rise another 25% by year’s end.
But why are coffee prices soaring? Well, it’s not just the whims of market forces. No, there are a multitude of factors at play here, my friend. Let me break them down for you…
First off, we have the supply and demand issue. Climate change is having an impact on global coffee production, folks! Droughts in Brazil and Vietnam, the world’s largest producers, combined with excessive rainfall in other regions, have led to a significant drop in yields. This means fewer beans on the market, which naturally drives prices up.
And let me tell you, this isn’t just a one-time thing; it’s an ongoing issue. A recent report from the International Coffee Organization highlights that Brazil’s coffee exports dropped by 7.4% year-over-year and Vietnam’s December export fell nearly 40%. That’s right, folks – I’m talking about a staggering 40%! Now, you might be thinking, “But wait, isn’t there some other stuff happening?” And to that, I say, “Heck yeah!” There are plenty of other factors at play here.
First off, we have the Suez Canal slowdowns and Red Sea fighting between Israel and Hamas. This has caused a backlog in global shipping, with as many as 5 billion bags of coffee still stuck en route to Europe. That’s right – you heard me right, 5 BILLION BAGS! As a result, we’re seeing increased costs for transporting these precious beans.
And if that wasn’t enough, let me remind you about the European Union’s new law that bans the sale of coffee products tied to deforestation. This may sound like some obscure regulation, but trust me, it’s having an impact on supply chains and driving up prices.
But don’t even get me started on geopolitics! President Trump has once again threatened a 25% tariff on Canada and Mexico, which would directly impact the U.S. coffee market. And let’s not forget about those tariffs he already slapped on some of our good friends in Europe – that’s right, I’m talking about the French! Oh la la!
So there you have it, folks – a perfect storm of climate change, supply chain disruptions, and geo-political shenanigans. It seems like we’re looking at a long-term trend here, not just some passing fad. So go ahead and stock up on those coffee beans while you still can – you never know when the bean market might get even more… perky!
Source: https://www.cbsnews.com/news/why-are-coffee-prices-so-high-inflation/
