People still need to consume caffeine, even if they’re in a global pandemic.
Fears of supply disruptions during the pandemic have led to hoarding in some countries, giving coffee prices the needed boost.
This information can be considered good news for some major coffee producing regions of the world. These areas had been in trouble for many years when coffee prices were constantly low.
Since 2016, coffee prices have decreased by 30%, according to calculations by the International Coffee Organization (ICO), an organization consisting of 49 member countries specializing in coffee import and export. In March 2020, arabica coffee price at 1.12 USD / pound, much lower than the figure of 3.00 USD / pound.
The ICO organization emphasized in a recent report: “Many of the 25 million farmers around the world are struggling to cover their operating costs as input prices continue to rise. As a result, the income of farmers around the world has decreased, and their livelihood is severely affected ”.
Prices for Arabian coffee, the world’s most produced coffee, rose last month due to supply concerns.
The price of Arabian coffee from Brazil, the world’s largest coffee producer, increased by 10% in March 2020. Coffee futures on the New York market in March 2020 increased by 8.8% to $ 1.16 / pound. By the end of Thursday, Arabian coffee prices closed at $ 1.2120 / pound.
The Covid-19 pandemic led to many factors of supply disruption, from production disruptions to transportation or retail, and blockade regulations that apply around the world.
Supply disruptions are likely to continue when Colombia, the world’s major coffee exporter, is in a blockade.
The usual Colombian harvest season in April 2020 is likely to be affected by the blockade measures as well as the lack of labor from neighboring countries. Colombia’s country blockade is expected to be maintained from April 27, 2020.
On a global scale, the ICO said: “Currently, demand is estimated to be higher than production. Disruption to the supply chain during both the shipping and the harvest seasons will likely lead to temporary scarcity, driving up prices in the short term.
