The price of coffee has been rising sharply in international commodity markets, and while Canadian consumers have not felt the same, the pressure of climate change on the world’s coffee farms is putting the industry on edge, say insiders and scientists.
The current market price of Arabica beans, which make up about 70 percent of the coffee market, is around $2.70 US per pound. This time last year, it was around $1.49 US.
Meanwhile, the market price of cheap Robusta beans, popular in Europe and instant coffee makers, has more than doubled in the past 12 months.
The price jump comes amid a severe drought in Brazil and Vietnam, the world’s biggest coffee producers. And as climate change increases the frequency of these extreme weather events, industry insiders say the trend could result in higher prices for a cup of coffee in Canada down the line.
The impact of climate change is “clearly visible… especially in the countries where it comes from,” Robert Carter, president of the Coffee Association of Canada told CBC News.
“We have other impacts like pests and diseases in regions like Colombia and Vietnam. So, throwing all of that together, combined with supply chain disruptions, is leading to this price pressure we’re experiencing in coffee.”
Canadian roses are heat sensitive
Up to 5,500 pounds of coffee beans are roasted daily at Chronicle Coffee Roasters in Calgary depending on the season, says owner and founder Karl Ward. They roast themselves and other brands, and work with independent cafes across Canada.
The market, he says, is always changing.
“But one thing as roasters we’ve never seen before is the flexibility we have now.”
In Brazil, the world’s largest coffee producer, farmers have been struggling for months with one of the worst droughts the region has seen in decades. Much of the country has experienced unusually low levels of rainfall since May, including the state of Minas Gerais in southeastern Brazil, which has many Arabica farms.
One farmer in Caconde, a town in one of the growing districts of Sao Paulo state, told The Associated Press earlier this month that he expected to harvest 120 sacks of coffee beans this season, but was only able to get 100 because of the drought.
Crop failures in Vietnam this year due to drought have also put a lot of pressure on Brazil. Vietnam is the largest producer of very small Robusta beans. Some traditional Robusta buyers have switched to buying Arabica, most of which is produced in Brazil. For specialty coffee roasters who use only Arabica beans, like Ward, that adds more pressure.
Producers say the big price hikes haven’t affected consumers yet
For Canadian consumers, the selling price of an average bag of roasted or ground coffee has increased by nearly 25 per cent over the past four years, according to Statistics Canada. That’s much smaller than commodity price increases, but the increases seen this year are expected to cause “more coffee prices down the road” for average consumers, Carter said.
Fluctuations in the price of coffee supplies do not directly translate to the price of a latte at your local coffee shop, as cafes have many other costs factored into a single cup, such as labor costs.
Ward predicts additional price increases for consumers will take three to six months to take effect and it is unclear how much they would increase.
But companies in the middle of the supply chain are worried.
Commodity prices for coffee are up about 80 percent, Ward said. “It’s not inviting to us as coffee roasters, and it’s not inviting to the consumer.”
He expects market prices to drop closer to $2-$2.20 US later this year – warning this stability depends on the weather in coffee-producing areas next year.
Climate change is increasing the frequency of droughts: scientist
In Brazil’s coffee-producing regions, such a drought should occur “about once every 50 years,” according to Nathan Moore, an associate professor at Michigan State University who studies climate modeling. But concerns about the coffee industry have risen during previous droughts in 2014 and 2021.
“In this case, it appears that climate change and deforestation are converging to increase the likelihood of severe drought,” Moore said.
When trees are removed, it disrupts the ecosystem’s moisture recycling, which can leave regions vulnerable to drought, Moore explained.
Deforestation has long been a problem in Brazil, with rates rising to record levels under former president Jair Bolsonaro. President Luiz Inacio Lula da Silva, who took office in 2023, vowed to end deforestation in the Amazon, and the rate has recently slowed, according to data from the country’s space agency. But it’s still a pressing concern.
Climate change may be one of the drivers behind the high prices we are currently seeing, but it is a major threat to the continued health of the sector in the future, experts say. Moore pointed out that increased periods of drought could see farmers experience more failed harvests than they had budgeted for, which could lead to some leaving the industry altogether.
Maren Oelbermann, a soil scientist and professor in the Faculty of Environment at the University of Waterloo, explained that climate change and extreme weather are putting pressure on the plants themselves by changing the growing conditions they are used to, which can include coffee plants. at high risk of disease.
Growing varieties, such as “agroforestry” varieties that combine trees and plants in the same area, may be needed to maintain crop production in a changing climate while keeping costs low, he said.
“Perhaps the way we do agriculture, whether it’s in a tropical region or here in a temperate climate, we should look carefully at how we do things, because it may need to change,” he said.
“I think it just takes a change in the way we think.”
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