Deforestation has proved to be detrimental for two of the most popular coffee species, Arabica and Robusta.
As previously reported, the extinction of these breeds presents several economic challenges for nations that rely on them as major exports. Additionally, climate change has injured coffee producers. Lower production demands higher costs. The surplus is predicted to fall from the 9 million bags reported last year, to 5 million bags this year.
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Coffee prices already on the rise
The spike in coffee prices isn’t strictly an agronomy concern. Coffee culture in the west also goes a long way to influence the price of your morning java.
Last year, Starbucks raised the price of its coffee by about 20 cents at most of its U.S. locations. A saturated market similarly saw local shops raise their prices as well. With so many different options for consumers to choose from – in any given area – companies have become desperate for the slightest sign of incremental growth.
“When a big chain, such as Starbucks faces a maturing market, it will close down stores that are not profitable. But the company also will increase prices at high-performing stores to maximize the revenue it can create, Shawn Hacket, president of Hackett Financial Advisors, a Boca Raton, Florida based agriculture commodity analysis firm told WUSA9.
The customer loyalty procured by local shops and coffee corporations alike, ensure we keep going back despite subtle price increases. Many of us rely on the stuff, and even with the already subtle rise in price, it really isn’t all that expensive, relatively speaking. But will the accumulation of steadily rising coffee costs ever become too much?
Columbia and Brazil’s crop is expected to fall to about 1 million bags this year (Brazil’s decline owes itself to bad weather occurrences in December and January), and Central America’s crops are predicted to decline to about 1.5 million bags.
Even slight changes in climate can dramatically disrupt the quality of Arabica. If farmers have to find alternative locations to grow the popular coffee breed, prices will potentially rise at the expense of quality.
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