International Coffee Bean Prices Remain on the Rise
Recession of Coffee Bean Crops Due to Abnormal Climate
The international coffee market is currently experiencing a significant price increase due to a recession in coffee bean crops caused by abnormal weather conditions. Despite the industry's assurance of no immediate plans to hike prices, they are closely monitoring the situation. The government is contemplating support measures, including extending allocation tariffs.
Coffee Bean Price Surge: A Concern for Low-Cost Coffee
Low-cost coffee, once a staple for the common people due to its affordability, is now facing price hikes. The Ministry of Agriculture, Food and Rural Affairs reported that the price of Robusta beans is $3.67 per kilogram, and Arabica beans are $2.01 per pound this month. Although slightly down from last month, these prices have risen by 40.6% and 7.5% respectively from the same period last year. Compared to 2020, the prices are approximately three times higher for Robusta and two times higher for Arabica.
Import Price Index and Trade Index
The "April Export-Import Price Index and Trade Index" by the Bank of Korea highlighted a 14.6% month-on-month and 46.7% year-on-year increase in coffee bean import prices. Robusta beans, predominantly used in low-cost coffee, surged by 51.9% compared to the previous year's average price.
Impact of Abnormal Weather on Coffee Production
The price hike is largely attributed to abnormal weather conditions affecting major coffee-producing countries. Vietnam, the top producer of Robusta beans, faces a poor crop yield due to drought and high temperatures. Similarly, Brazil's Arabica bean production has declined due to cold damage and coffee rust.
Industry Response and Government Support
Low-cost coffee franchises are contemplating price increases as bean prices soar. For instance, The Venti recently raised prices for several menu items. Industry players are urging the government to extend allocation tariffs to mitigate the impact of rising prices. The Ministry of Agriculture, Food and Rural Affairs is actively engaging with coffee industry stakeholders to address these challenges.
Yang Joo-pil, a policy officer at the Ministry, emphasized the need to consider extending quota tariffs due to the volatility in coffee bean prices driven by climate change.
FAQs
Q1: Why are coffee bean prices rising? A1: Coffee bean prices are rising due to a recession in crop production caused by abnormal weather conditions such as droughts and high temperatures in major producing countries.
Q2: How much have coffee bean prices increased? A2: The price of Robusta beans has increased by 40.6%, and Arabica beans by 7.5% compared to last year. Compared to 2020, the prices are approximately three times higher for Robusta and two times higher for Arabica.
Q3: What measures is the government considering? A3: The government is considering extending allocation tariffs to help alleviate the financial burden on the coffee industry caused by rising bean prices.
Q4: How are low-cost coffee franchises responding? A4: Some low-cost coffee franchises are contemplating price increases, with The Venti already raising prices on several menu items.
Q5: What are the main causes of the coffee production decline? A5: The decline in coffee production is primarily due to adverse weather conditions, including droughts in Vietnam and cold damage in Brazil.
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