Budget coffee is getting harder to find – world prices have reached record levels in 12 years

The rising cost of living around the world is pushing coffee lovers to look for cheaper varieties of their favorite drink. However, budget coffee is not easy to find – the lack of robusta beans is to blame.

Bloomberg explains:

“While many coffee drinkers prefer the high quality Arabica coffee shops sell, Robusta is usually cheaper because the wood is hardier and requires less maintenance, making it easier to produce in large quantities. This variety is often used in instant coffee, espresso and ground blends sold in supermarkets. They have become popular again as consumers with financial constraints look for alternatives.”

Key manufacturers are having a hard time keeping up with the surge in demand, with wholesale prices this week reaching their highest levels in twelve years. For consumers in Germany, for example, Europe’s largest coffee market, this has had a significant impact on retail prices: instant coffee is almost 20% more expensive than a year ago, even though inflation for coffee beans slowed down. In the US, the rise in prices for instant coffee also slowed down less in April than for roasted coffee. The publication notes:

“The chances that the global Robusta shortage will ease any time soon look grim. Vietnam, the world’s largest producer, has seen what is likely its smallest crop in four years after farmers focused on planting more profitable crops such as avocados, to cope with skyrocketing fertilizer costs following Russia’s invasion of Ukraine. Brazil, the second largest producer of the variety, has been hit by a drought and there are also concerns that production in Indonesia could be affected by heavy rains.”

Bloomberg interlocutors, representatives of the industry, explained that the maximum values ​​​​of prices are associated with a sharp increase in demand, which farmers do not have time to satisfy. New York-based consulting firm director Judith Gaines says:

“There has been such a strong shift in demand away from more expensive coffee that the market is not satisfied with the export of even more expensive Robusta.”

Experts said that in the first months of 2023, more robusta grains were exported than in the previous three years. Information about the increased demand was confirmed by the Brazilian Association of Instant Coffee Producers, and by Nestle SA and Tata Coffee.

The growth in demand for instant coffee came in a lean year – a small crop in Vietnam, a drought in Brazil, rains in Indonesia. Despite the challenges, deliveries between October and March were about 4% higher than during the same period in 2021-2022, according to the International Coffee Association. However, they are not keeping up with the growing needs, notes Bloomberg.

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