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.
I don’t know about “doomsday”, but I am prepared for the lefty zombie apocalypse.
Oh wait—that has already happened!
“Sop, you think instant coffee doesn’t come from coffee beans?”
I thought it grew on trees...money trees.
Not really.
Brazil mass produces coffee. It is not great coffee but it is decent. It is supermarket coffee.
Other countries can not fill the void because setting up a coffee plantation is about a four year process and by that time Brazil will be back to pumping out cheap mass produced coffee.
All seriousness aside...
I buy Taster’s Choice from Sam’s Club. Have to order it online because the local Charlotte club doesn’t carry it. Been hovering in the $11-$12 range but was $12.98 last week when I hit a Sam’s while visiting the kid in VA. The local club there actually had it on the shelf. I’d started buying Sam’s store brand (Members Mark), which was very good...and 2/3’s the price. Had to order it online also. Can’t even find the store brand online now. Time to stock up on the Taster’s Choice.
I imagine it’s an ‘acquired’ taste.............
bkmk
AA will light you up. Good stuff.
I’m going to get blasted by the Coffee Police, but I like Folgers Breakfast blend. Low acid, mellow taste. Stores forever and not expensive.
Coffee is too much of a personal thing...to heck with the Coffee Police. I would never chastise someone for their choice in caffeine intake.
Much cheaper.
In fact, our second president, John Adams, started off his day with a mug of hard cider.
He lived to be 90 years old - which was an incredible feat back in those days. Life expectancy back then was between 30-40 years. Adams more than doubled that.
Seattles Best delivered from Amazon, Portside Blend. Pretty darn good. Gets here in 1 to 2 days.
Seattles Best delivered from Amazon, Portside Blend. Pretty darn good. Gets here in 1 to 2 days.
Until China gets in the market.
Just heard that from an unlikely source.
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