On Tuesday, December 10th, the price of the globally beloved Arabica coffee beans reached as high as $3.44 per pound, breaking the historical record of $3.35 set in 1977.
Brazil is the main producer of the most popular Arabica coffee variety globally. The country experienced the most severe drought in 70 years in August and September, followed by heavy rains in October, leading to a decrease in coffee crop yield and driving up prices worldwide.
Meanwhile, the price of Robusta coffee beans, which are used for instant coffee and are cheaper, has also risen by 80% from the beginning of the year due to climate challenges faced by its main producer, Vietnam. By the end of November, prices had reached $5,694 per ton.
As coffee demand continues to grow while the supply diminishes, businesses may pass on the costs to consumers.
Italian coffee brand Lavazza stated that they have been absorbing the rising coffee prices for a while but had to make adjustments. The company told BBC News, “Quality is crucial to us and has always been the cornerstone of our trust contract with consumers. This means we need to continue dealing with very high costs. Therefore, we have had to adjust prices.”
Last month, Nestle, the parent company of Nescafé and Nespresso brands, announced that they would continue raising prices and reducing packaging to cope with the rising costs of coffee beans.