Coffee drinkers are facing higher prices due to weak harvests affecting global bean production.
Arabica coffee bean futures have increased by over 20% in 2024, while robusta beans, known for their bitterness, have seen a 40% jump. These beans are used in premium coffee blends and instant coffee, respectively.
J.M. Smucker, the owner of Folgers and Cafe Bustelo, initially absorbed lower coffee costs but has announced price hikes across its products in early June due to rising commodity prices.
Main coffee producers Brazil and Vietnam have been hit by drought and dry conditions, leading to decreased plant growth and lower yields.
Global coffee demand remains strong, especially in China, where consumption has surged by 26% since 2020. However, global supply has dropped by 36% during the same period.
The U.S. Department of Agriculture anticipates some improvement in the 2024-2025 harvest year, but supplies are expected to remain well below 2020 levels.
