Start clipping coupons and hunting for bargains on coffee, according the Wall Street Journal, prices are going to go up. The top coffee varietal grown in the top coffee growing region of the world has seen some nasty weather lately, or at least nasty weather from the perspective of Arabica beans.
Coffee beans only come in two different varietals, Arabica and Robusta. Robusta is not something that most people want to drink. It is, as its name implies, robust which in coffee terms means strong and bitter.
Arabica is the kind that most coffee makers use and the one that most people drink. In particular it’s the varietal of bean that Starbucks uses in its coffee, and we’ve already seen Starbucks raise prices a couple of times in the last year. Just the same, you can expect coffee prices in general to go up.
Brazil, the world’s leading coffee producer, has had some weather issues over the last year or two. Most recently, just this past summer, a frost destroyed over half a million acres by some estimations. That comes after severe drought plagued the region. That made coffee prices shoot up. This is the same situation we see in regards to the Russia-Ukraine problem. When one region of the world is responsible for a very large portion of a commodity’s production, disruptions therein can cause prices to jump up.
Coffee is one commodity in which you will see a change of price when you go to the grocery store, and with weather patterns demonstrating more extreme movements, along with the consideration that coffee is a finicky plant that needs very specific conditions in which to grow, we may be seeing a prolonged period in which coffee prices are elevated.