“Coffee prices are expected to rise by the middle of next year due to abnormal climate in cultivation areas this year.”
It is predicted that coffee prices will continue to rise until the middle of next year due to a shortage of coffee bean supply due to abnormal weather in growing areas.
In particular, European consumers are expected to have to pay additional costs in addition to the increase in coffee bean prices to drink coffee due to the European Union’s (EU) Deforestation Regulation (EUDR) coming into effect at the end of this year.
Giuseppe Lavazza, chairman of Italian coffee brand Luigi Lavazza, said in an interview with Bloomberg News on the 9th, “There are concerns that coffee bean prices will rise sharply in Vietnam, the world’s largest Robusta bean producer, due to a lack of harvest.”
The price of Vietnamese coffee beans has reached a high price of more than $1,000 per ton due to poor harvest this year, and this phenomenon is expected to continue for the first time in the industry’s history.
Futures prices for this variety rose earlier this year as hot, dry weather in some parts of Vietnam caused damage to coffee trees, raising concerns about supply shortages. As a result, futures prices rose by about 60%, reaching a record high of $4,667 per ton as of today.
In addition, the harvest of Arabica coffee beans is expected to decrease in Brazil’s major growing regions due to last year’s drought.
In addition to concerns over supply shortages, Luigi Lavazza’s production costs have increased by more than 800 million euros (approximately KRW 1.2 trillion) over the past two years due to the suspension of traffic in the Suez Canal and increased transportation costs due to the strong dollar, Chairman Lavazza said. .
He said that with the EUDR coming into effect at the end of the year, coffee manufacturers are rushing to purchase beans and are working to reduce the burden of having to prove that coffee beans supplied after 2020 are not linked to deforestation. As a result, coffee prices are expected to become more expensive.
EUDR is a regulation that applies to companies that import and sell seven items, including coffee, as the EU determines that deforestation has a serious impact on climate change and biodiversity loss. According to the regulation, these companies must conduct due diligence on deforestation in their supply chains starting three years before it comes into effect, and if they violate the regulation, they can face fines of at least 4% of EU sales, as well as confiscation or confiscation of products.
Editor. Seyoung Hong
