Posted on 09/21/2021 6:27:25 AM PDT by blam
Robusta coffee prices continued to soar to record-highs this week as concerns deepen over the outlook from Brazil, the world's top producer.
"Cheaper robusta-coffee beans, used widely in instant-coffee beverages such as Nestle SA's Nescafe brands, are sold out in Brazil. After drought and frost ruined crops of the higher-end arabica variety favored by cafes like Starbucks Corp., local roasters are racing for robusta replacements and driving prices to new records each day," Bloomberg wrote.
Spot prices for Brazil robusta Espirito Santo have nearly doubled this year, up 356 reais per 60-kg bag, or about 87% to 769 reais.
Much of the price appreciation came after a freak cold snap decimated Brazil's coffee-growing regions in July/August. The unexpected weather was compounded by massive droughts, destroyed arabica crops, hence why robusta is being bought up in droves.
"There seems to be a consensus that 20% of all trees were affected," Sholom Sanik, an analyst at Friedberg Mercantile Group Ltd., said in a note. "Although more than half of the crop was harvested before the first frost hit, much of the fruit that remained unharvested will be lost."
In the past, US importers would quickly source from Vietnam, the second-largest producer, if there were weather-related issues in Brazil. But this time around, COVID restrictions, shortage of shipping containers, exorbitant freight costs, and port congestion have made it difficult and expensive to source from the Southeast Asian country.
According to a recent Barclays note, US importers like Starbucks are hedged out for more than a year to deal with price fluctuations. Though JM. Smucker, which owns the Folgers and Dunkin' coffee brands, recently warned that supply chain disruptions are rising costs that will impact its business.
"As we came into the fiscal year, we were anticipating mid-single-digit cost inflation as a percent of our total cost of goods sold," J.M. Smucker's Chief Financial Officer Tucker Marshall said. "Now we see high single-digit cost inflation."
Earlier this year, we warned that cheap coffee is no more, and a global deficit is coming. Even cheaper beans are hyperinflating away.
Brazil produces 40% of the worlds coffee.
Joe’s fault.
Dang. My $1.25 gas station coffee is going to go up to $1.50.
Other countries can fill the void..........................
We have 8 boxes of Kirkland brand Keurig cups. We buy the max every time they are on sale. We’re covered for at least a year...
Only 8 boxes? So just an occasional coffee drinker I take it?
“I love coffee, I love Tea, I love the Java Jive and it loves me,..”
For what these coffee houses already charge they must be near the limit of what many people will pay already.
Indeed, it may be why they sell so many hot melty candy bars that have coffee in them.
:D
We only buy it on sale, which happens every few months. We’ll be fine. 130 cups per box. My wife only drinks one cup a day. ;)
Oh, and I manually fill a reusable cup from a tin of Kirkland columbian coffee in my shop/mancave. :D
We’re set for a while. We only have 200 gallons of gas left in our “portable” fuel station, though. We may need to restock...
Same in Eastern Nevada. Still stocking up as IMO, it is the calm before the storm, compounded by the "transitory" inflation.
Nooooooooooo!!!!!!!!!!!!
Yep. And my Eight O’Clock coffee may go from 25 cents per cup to 30 cents per cup.
Not a problem...I drink instant coffee.
I don’t use pods but rather loose coffee and a drip pot.
But with your supply you are set for a long time. I use
a drip system and once made a cup of cold coffee in a
microwave for 30 seconds or so and its ready.
“Not a problem...I drink instant coffee.”
Sop, you think instant coffee doesn’t come from coffee beans?
Vietnam — which shares a border with China — reported only 1,465 Covid cases and 35 deaths last year, according to data compiled by Johns Hopkins University. But the country’s cumulative cases exploded to more than 635,000 as of Tuesday, with over 15,900 deaths, the data showed.
Like many of its Southeast Asian neighbors, Vietnam is struggling to contain the highly infectious Covid delta variant. Only 5.7% of Vietnam’s population has been fully vaccinated, official statistics compiled by Our World in Data showed.
I stocked up on coffee when stories about prices going up began. Granted, it’s crappy Folgers and Maxwell House, but I opted to go for quantity over quality. I’m set for approx. 6 months.
The last really good coffee I had was about 20 years ago.
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