Global Coffee Shortage in the Offing No Thanks to Climate Change, Prices to Jump
By Esther Tanquintic-Misa | February 27, 2014 4:15 PM EST
Coffee drinkers seeking to reduce their consumption of the beverage may want to seriously ponder on that plan. Prices of coffee in the world market are expected to increase, spurred by droughts resulting from climate change.
People walk past a Starbucks coffee store at Qianmen Commercial Street in central Beijing, in this file picture taken April 19, 2012.
While the world will not really go out of coffee to wake up the mornings, the epic drought that hit Brazil, where most of the world's coffee comes from, will surely threaten not only supplies but also prices of the wake-upper commodity.
On Wednesday, prices of coffee per pound (0.45 kg) for delivery due in March had hit $1.72, the highest point in 14 months.
Brazil experienced its worst drought in decades in February which had severely affected the country's coffee region, ultimately destroying crop yields.
But even before the drought, prices of Arabica coffee futures have shot more than 50 per cent in the last 2 months because of climate change.
Early at the start of 2014, a report released by a commodities trading firm said the world will face a global coffee shortage for the first time in three years. It said supplies of coffee for the 2014-15 season will be lower by 5 million bags than consumption.
Coffee production is hard to mechanise. It takes years for a coffee plantation to reach maturity since it needs to be grown on carefully cultivated trees. And as the world grows warmer due to climate change, existing plantations will be most likely abandoned. Reports had said that at least 10 per cent of Brazil's most productive coffee-growing regions will become barren in just a few years' time.
"Regardless of what happens in Brazil now ... we will see higher prices and more competition for higher-quality coffee," Kim Elena Ionescu, a coffee buyer and sustainability manager for North Carolina-based coffee roasting company Counter Culture, told the Guardian.
Whereas before coffee used to be consumed only by the developed world, more and more people outside of that region are drinking it.
"More people are drinking coffee," Ms Ionescu said. "And more people are drinking better coffee," she added.
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