Coffee drinkers will soon have to pay more money for caffeine

Coffee drinkers will soon have to pay more money for the daily dose of caffeine. Due to crop failures in the important export country Brazil and scarce transport capacities, fewer and fewer roasted beans are reaching consumers. This is particularly noticeable in the supermarket, says a coffee dealer. "You pay for the coffee and some packaging. At Starbucks, prices are unlikely to rise that much because you pay more for the shop, the WiFi and the experience." Brazil is currently hit by a cold wave, the exact extent of which cannot yet be estimated. Before that, the plantations had been weakened by the worst drought in 91 years. When a coffee tree dies, it takes at least seven years for a new one to produce a similar number of beans. Against this background, prices for Arabica and Robusta coffee had reached their highest levels in three years at the end of July. According to the Brazilian industry association Abic, the roasters there already have to pay 80 percent more for raw coffee beans than at the turn of the year. "Historically, significant price changes are reflected in the market prices for consumers," states the coffee group JDP Peet's, to which the "Jacobs Coffee" brand belongs. This will probably also be the case this time. Rising raw material prices alone would not be a problem, says Mark Schneider, head of the Nestle food company. His company has already secured a large part of the demand through forward transactions at fixed prices. In contrast, this is not the case with transport costs. Because the coronavirus pandemic has shaken international supply chains, containers are missing in some parts of the world while they are piling up in other regions. Transporting coffee between North and South America is practically no longer profitable, says Carlos Santana, chief coffee trader at the brokerage company Eisa Interagricola. "The prices are three times what they were before the pandemic." But even if you get hold of one of the coveted containers, you still have the problem of getting it on a ship, interjects Thiago Cazarini, coffee trader in the Brazilian state of Minas Gerais. "Brazil is currently a logistical catastrophe," complains a US importer. He's still waiting for deliveries that were supposed to arrive two months ago. Around 30 percent of global coffee exports come from Brazil.