Adverse weather, COVID-19 are to blame for highest coffee prices in 4 years, analysts say
Adverse weather, COVID-19 are to blame for highest coffee prices in 4 years, analysts say
extreme weather is creating horrible conditions for farmers around the world and making food more expensive here at home. According to CNN business, the price of arabica coffee futures as almost doubled over the past year, and as brazil deals with frost conditions that have wiped out crops. Coffee, retail prices are likely to rise. The frost in brazil and dry conditions in the Dakotas and Red River Valley are driving sugar prices up, wheat prices are going up due to devastating heat and droughts. The frequency and severity of droughts is increasing droughts that used to happen once a decade now happen 70% more often worldwide. Additionally, today points out that inflation is a side effect from the pandemic, a shortage of workers in the agricultural sector due to the pandemic and the trump Administration's immigration policies is another contributing factor to save money at the grocery store, keep track of your spending and take inventory of what you already have at home to reduce food waste.
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Adverse weather, COVID-19 are to blame for highest coffee prices in 4 years, analysts say
After surging in the spring, the prices of goods like lumber, corn and soybeans have come back down to Earth. Coffee is headed in the opposite direction.What's happening: Futures for robusta coffee, which is often used to make espresso, recently jumped as high as $2,024 per ton, their highest level in four years. Analysts are pointing to adverse weather in Brazil as well as COVID-19 restrictions in Vietnam."Brazil is the largest coffee producer in the world," Warren Patterson, ING's head of commodities strategy, told me. "They've been hit with quite a bad drought this year and it's been followed by frost," which has seriously harmed the country's coffee trees.Arabica futures for December are up 3% this month after climbing 18% in July.What it means: Companies like Starbucks buy coffee ahead of time and have hedging strategies in place to lock in prices. But J.M. Smucker, which owns the Folgers and Dunkin' coffee brands, said last week that rising costs will still affect its business, especially since it's already contending with more expensive transportation and packaging."As we came into the fiscal year, we were anticipating mid single-digit cost inflation as a percent of our total cost