Current Coffee Crisis: A Temporary Surge or the New Normal?

The global coffee market is currently experiencing challenges, with prices reaching a two-year high due to significant crop concerns in key producing regions. Brazil’s Minas Gerais region, a vital contributor to the world’s arabica coffee supply, has faced a 74% rainfall deficit, while Vietnam, a major robusta producer, is contending with drought conditions, potentially leading to a 20% drop in coffee production (Source: Coffee Prices End Sharply Higher on Global Crop Concerns | Nasdaq)

In my view these elevated prices are likely to persist until the new Brazilian crop enters the market in July/August. We anticipate prices in the range of 200-230 cents per pound during this period, with a possibility of prices going as high as to 250–260 cents per pound. Diagram below show the Coffees Prices over the last 6 months with a significant increase in prices in April 2024.

Coffee Prices over the last 6 months (November 2023 – April 2024)

Adding to the complexity of the situation is the shipping crisis affecting African coffee exporters. Since February this year here at Viva Coffee we have experienced first-hand delays of up to 12 weeks in shipping schedules to Ireland from African countries such as Ethiopia and Kenya. These delays are primarily due to heightened security concerns in the Red Sea region, which have led to increased shipping costs and extended transit times. This disruption has forced ships to reroute, traveling from African ports to Cape Town before heading to Europe, further impacting the coffee supply chain.

In conclusion, the current spike in coffee prices is a confluence of multiple factors affecting the global coffee supply chain. While we anticipate a possibility of relief with the onset of the new Brazilian crop, the shipping disruptions and associated increased costs may continue to sustain coffee prices at this heightened level in the medium term.

If you want to discuss your anticipated coffee requirements, please get in touch at any time by email or phone (087 6657 803). The team at Viva Coffee are here to assist you in any way we can as we navigate this current crisis.

Lucas Sampaio

Founder & CEO
Viva Coffee Ltd.