Coffee prices are steadily on an upward trajectory. Causes are climate change, high demand and the war in Ukraine and the Middle East.Developments in the global market and high energy costs make the popular drink increasingly expensive, notes the Tschibo company, a leading coffee seller in Germany with a turnover that exceeded 3.26 billion euros in 2021. In early May, the Hamburg-based German company announced that it would have to “adjust” its roasted coffee prices: “Many costs have continued to rise over the past year, including for raw green coffee. In order to continue to offer our customers the quality they have come to expect, we must take action.”

Gepa, the largest European importer of fair trade food from the global south in Europe, is recording a decline in sales due to the restriction of consumption, which is due to inflation. The high prices of raw materials for coffee and cocoa, as well as the war in Ukraine are having an impact. THE Andrea Fitterer, head of Gepa’s Fundamentals and Policy department, is concerned about high prices and volatility in raw material markets. Plant diseases favored by monocultures and climate change, which brings drought or excessive rainfall, are largely responsible for the jump in prices, the German expert estimates.

Climate change is affecting growers

According to Fairtrade International, which represents fair trade producers, coffee farmers are suffering. The company explained to DW that adverse weather conditions, especially in Southeast Asia and South America, are also driving prices up.

In addition, armed conflicts around the world cast a heavy shadow on the markets, notes Carsten Fritz. The German Commerzbank analyst monitors developments in the so-called “soft raw materials” markets, which include food. In an interview with DW, he refers to a study he prepared on behalf of Commerzbank Research:

“Unlike Robusta, the Arabica variety is little affected by the restrictions on trade through the Red Sea, as the leading producers of this variety do not use this route to transport it. However, the situation is different for the Robusta variety, which is produced mainly in Southeast Asia.”

At a time when some producers are facing difficulties, others are benefiting from them: “The significant increase in prices, as well as the shortages of the Robusta variety may stimulate the demand for Arabica,” adds the German analyst. So Brazil, where 80% of the world’s Robusta production comes from, wins even more.

High prices are here to stay

German coffee roaster head Stephen Schwarz expects further price increases. He estimates that the increase is also due to the shortage of workers in the plantations as well as the increase in coffee consumption in the countries of origin. The German even told Der Spiegel magazine: “At the same time we have smaller harvests, labor shortages and growing demand.”

The growing demand is not only due to the fact that coffee has become fashionable in Europe and the USA. It has much more to do with increasing consumption even in countries with a tea tradition. In South Korea and China, for example, the demand for the popular drink in all its versions is increasing more and more.

Stephen Schwartz, however, believes that high prices are here to stay. He believes that coffee should cost 25 to 30 euros per kilo. As he told Der Spiegel magazine, “I have to be willing to pay at least this amount if I want good taste. As for the ecological and social aspects, they are a priority for me.”

Editor: Stefanos Georgakopoulos