Increased Prices of Coffee Beans on the Global Market Seems Likely to Continue
Robusta coffee berries in Trinidad and Tobago
Recent Pricing
In October 2024, the highest recorded price for Robusta coffee futures on the global market was US$5,003 per metric ton, observed on October 15, 2024. By comparison, in October 2024, Arabica coffee prices reached a peak of approximately US$6.102 per kilogram. This translates to about US$6,102 per metric ton. This surge was influenced by factors such as adverse weather conditions in major coffee-producing regions and supply chain disruptions.
Trend in Robusta Coffee Prices Over the Past Decade
The price of Robusta coffee on the global market has experienced notable fluctuations over the past 10 years, driven by a combination of climatic, economic, and agricultural factors. Here’s a summary of the key trends:
1. Periods of Stability and Growth
Early 2010s to Mid-2010s: Robusta prices remained relatively stable, supported by consistent production from major producers like Vietnam and Indonesia.
2016–2017: Prices peaked due to lower global stock levels caused by adverse weather in Vietnam, the world’s largest Robusta producer. This period marked a temporary supply shock.
2. Decline and Recovery
2018–2020: Prices fell as global stocks recovered and production in key regions stabilized. This decline was further exacerbated by subdued demand during the COVID-19 pandemic's early phase.
Late 2020: As the world emerged from pandemic-induced lockdowns, Robusta prices began to rise again, driven by increasing demand for instant coffee, which primarily uses Robusta beans.
3. Recent Surge in Prices (2021–2024)
2021: Severe frosts in Brazil and erratic weather patterns in Vietnam led to reduced output, driving prices higher. Supply chain disruptions and rising shipping costs further exacerbated the price hikes.
2023–2024: Persistent weather issues, including drought in Vietnam and shifts in agricultural practices (such as the replacement of coffee trees with durian crops), have significantly reduced Robusta supply. Reports from Vietnam suggest domestic stocks are now completely depleted.
Key Drivers of the Trend
Weather Extremes: Unfavorable climatic conditions in major producing regions like Vietnam and Brazil have repeatedly disrupted production.
Land Use Changes: Vietnamese farmers are shifting away from Robusta coffee cultivation to more lucrative crops like durian, tightening supply further.
Rising Demand: The global demand for instant coffee and lower-cost alternatives to Arabica has sustained upward pressure on prices.
Logistical Challenges: Recent geopolitical disruptions, such as delays in the Suez Canal, have added to costs, indirectly impacting prices.
Outlook
With demand continuing to outpace supply and climate-related risks persisting, the upward trend in Robusta coffee prices is likely to continue in the near term. However, long-term stabilization will depend on improved farming practices, better supply chain management, and addressing climate challenges in key producing regions.
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