Coffee Prices At Highest Level In 40 Years - InvestingChannel

Coffee Prices At Highest Level In 40 Years

%Coffee prices have rallied to their highest level in 40 years as poor weather hinders global crop production.

The price of the leading robusta coffee bean has risen more than 70% in the last six months to $4.23 U.S. per kilogram, a four-decade high.

Due to poor weather caused by global warming, the coffee market is facing severe shortages of robusta beans used to make the caffeinated beverage.

Coffee production is heavily concentrated in the countries of Brazil, Columbia, and Vietnam, each of which has had to contend with extreme weather conditions over the past year.

Vietnam has suffered from a severe drought, while Brazil and Columbia have experienced heavier than normal rain in recent months, harming robusta coffee bean production.

Supply concerns have pushed up coffee prices since last fall even as coffee bean growers scramble to replace older plants with new and more productive ones.

Some producers are also switching to the world’s second most popular coffee bean, the premium and more expensive arabica bean.

When supplies of the lower quality robusta bean are hampered, companies often can create coffee blends using cheaper versions of the premium arabica bean.

Intensifying demand has pushed the price of arabica beans up 20% in New York trading recently. Unlike the robusta bean, the arabica bean is expected to be in surplus supply this year.

Growers in Brazil, the world’s top coffee producer, have been racing to increase their arabica coffee bean production in recent years as robusta supplies dwindle.

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