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"Robusta" Winner as Coffee Prices Soar

Global coffee prices are heading for new heights, frightened by prolonged drought in Vietnam and weather problems in Brazil. And the previously "bad bean" robusta has got new life and is priced higher, boosted by a shortage of fine coffee beans and increased demand for instant and take-away coffee.

» Updated: 19 September 2024, 21:37

» Published: 29 August 2024

"Robusta" Winner as Coffee Prices Soar
Photo: Claudio Bresciani/TT

Both the price of robusta beans and the previously more sought-after Arabica variety have gone up, partly due to the demand for the previously much cheaper bean starting to approach Arabica and reducing stocks. The unrest in the Middle East, which has led many shipping companies to choose the route around South Africa instead of the Red Sea to the Suez Canal, has also increased freight prices for robusta from Asia to Europe. Vietnam is the world's largest producer of the bean variety.

Bitter?

This has squeezed the supply of robusta, a bean that is more suitable for instant coffee but has also been blended more with Arabica beans in recent years to keep prices down. Robusta is considered to have a fuller flavor, but its reputation has previously been tarnished by giving a slightly bitter taste.

However, the robusta bean got a boost during the pandemic when demand for instant coffee increased, and now also contributes to increased demand in countries like China. The investment in coffee drinks sold in cans and bottles is also contributing. The largest trader of coffee beans, Volcafe, expects that the harvest season starting in October will not be able to increase supply, according to the news agency Bloomberg. This will be the fourth year in a row with a bean shortage.

Wild West

It's not certain that prices have reached the top, says Steve Butler, one of the founders of ChAI, a company that tracks commodity prices using artificial intelligence, to Financial Times.

But, he says, the coffee market does not seem as much like the Wild West as the cocoa market, where speculation in prices has been extensive and fluctuations have been large.

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By TTThis article has been altered and translated by Sweden Herald

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