The year 2024 has made many things visible. Climate change has been discussed intensively in recent years, and now we are seeing its effects more and more clearly: for example, in the prices of green coffee.
There is simply not enough green coffee of the appropriate quality in the right place. Extreme weather conditions have led to drought in South America and heavy rainfall with flooding in Southeast Asia. In other words, the agriculture of the world's two largest coffee producers, Brazil and Vietnam, was particularly hard hit by environmental disasters last year. Vietnam even experienced the smallest Robusta harvest in 13 years. The coffee price on the stock exchange for Arabica and Robusta is thus at its highest level since 1977.
In addition, newly announced bureaucratic regulations (deforestation regulations) and supply chain problems, which began with the 2020 coronavirus crisis and are only slowly improving due to the unstable geopolitical situation, are further driving up the market price. In November 2024, two million sacks of coffee were stored in Brazilian ports alone, out of schedule. The sum of all these factors is leading to a plateau, a new zero line. At the same time, energy prices in Europe will remain high in the medium term, which in turn impacts the entire value chain.
All in all, not very encouraging, but still doable and, above all, instructive. In the past, the coffee exchange wasn't particularly important for specialty coffee roasters. However, since the high base price for green coffee on the exchange is now also driving specialty coffee prices to historic highs, we no longer have to solely evaluate the quality of the coffee samples when purchasing, but also pay attention to the weather forecasts of the producing countries to determine the right time to enter into a purchase agreement. The comparatively high current base price for green coffee will, in the long run, increase producers' interest in growing and selling coffee instead of switching to other agricultural products.
At the end of the day, it's all about making decisions.
We have decided not to skimp on quality, but to purchase high-quality green coffee in a targeted and long-term manner so that we can continue to stand behind our coffee varieties with conviction.