Remember the good old days when you could get an espresso for 1 euro; Italians certainly remember them. In Rome, Milan, Naples, the workers’ morning ritual was to drop into their neighborhood cafe, drink a shot coffee of 1 euro and start for their work, full of caffeine and little poorer, notes Politico.

And she was the average price for coffee until and before the coronavirus pandemic. But lately, the beloved habit has become much more expensive. An espresso coffee (in the leg) now it costs about 1.20 euros in Italymuch to the dismay of coffee lovers.

And it’s not just in Italy. The price of coffee has gone up everywhereas shown by the data of the European Statistical Service. But we probably don’t need to tell you that, you already know that.

The perfect storm

The increase in the price of coffee is due to a number of factors. First, to inflationwhich has raised prices on almost everything from electricity and beer to plumbing, as countries spent lavishly to overcome the effects of the pandemic, only to find themselves with the invasion of Ukraine which on the one hand pushed energy prices higher and on the other hand created heaps of problems in the global supply chain.

At the same time, however, there was perfect storm of other factors who hit the coffee where it hurts:

Underwater drone attacks.

The Houthis of Yemen have wreaked havoc on the Red Seawith their attacks on cargo ships. Thus, more and more ships pass through the Cape of Good Hope in South Africa. This means more time and higher costs.

Maersk, a shipping company, has stated that the disturbances expected to continue in the third quarter of the year.

The result is that the prices of coffee from Vietnam – the main producer of the Robusta variety (the consumption of this particular variety reaches 40% worldwide) – have been burdened.

“The Houthis have shown ingenuity in not only using the drones they used in the past, but also submarines” said Rabobank commodities analyst Oran van Dort. “They are showing more and more that they can do real damage.”

But the Brussels bureaucracy is also to blame

With the Yemeni rebels contributing to the price hike with their missiles, policy makers in Brussels are also playing their part in raising the price, with their decisions.

The rules of the European Union to reduce deforestation they come into effect at the end of the year. Based on the regulation, coffee producers will have to certify that the production of their products is not linked to deforestation and forest degradation.

Companies will have to gather evidence to prove this, a thorough and costly process. Also, businesses are not yet sure exactly how the rules will be implemented, which creates uncertainty and could drive prices even higher.

Old fashioned economics, climate modernism

Coffee in international markets is sold in dollars. The strengthening of the dollar in relation to the eurohas made coffee more expensive for its buyers in Geria Epirus.

In addition, we have climate change, which can affect all commodities.

In South America, drought was followed by frost in 2021, which affected the coffee crop in Brazil. In Vietnam, the rainy season was delayed, which affected production. Thus we arrive at the basic Law of economics, of Supply and Demand: when there is not much supply of a product, its price increases.

Additionally, long-term climate trends do not bode well for coffee supply.

“Coffee, like all crops, faces increasing challenges from climate change” said Christopher B. Barrett, an economist and Professor of Agriculture at Cornell University in New York.

A (generally) more expensive purchase

For coffee businesses, price increases should be carefully considered, balancing increased costs with the need to retain repeat customers.

“We are not going to raise prices just because we are not sure if our customers will stay with us” said Kiliane Huyghebaert, owner of a chic cafe in Brussels. The former lawyer, turned entrepreneur and opened the cafe in the heart of Brussels, in the St. Gilles, 3 years ago.

However, it is not only the price of the grain that limits the profit margin. Labor costs have also increased, as when the cost of living rises wages usually follow. And this cost is not negligible, considering that a barista needs months to be trained in the special preparations of each store.

And so far we’ve only talked about the basic stuff. Don’t forget that for cappuccinos, macchiatos and other typesit needs one more key ingredient which raises the cost even more.

“His honor fresh milk it’s doubled, which is crazy” Huyghebaert said.

Is there any good news?

The good news is that, at least in the medium term, prices are expected to hold, says Rabobank’s Oran van Dort. Farmers receive incentives to create more supply in the market, he added.

So don’t worry, you can continue your favorite coffee habit. And if not, you might be pleased to know that tea prices have come down…