By Burhan Sansarlioglu
ISTANBUL (AA) – Coffee prices reached historic high levels in the global markets as other commodities saw sharp fluctuations after President-elect Donald Trump’s win in last month's US elections, and coffee stood out at a record of $3.2615 per pound on the Intercontinental Exchange.
The pound price of coffee increased by over 70% since the beginning of this year.
Concerns over the continuation of dry weather conditions in Brazil, which negatively impacted coffee yields, and frost possibilities in the country also gave rise to coffee prices.
The Houthi attacks in the Red Sea also contributed to the price hikes as they slowed shipments from Asia to Europe.
Meanwhile, extreme heat and droughts in Southeast Asia where coffee bean producers operate led to lower harvests, especially in Vietnam, which pushed prices upwards.
Coffee yields are estimated to further decrease with the La Nina weather extreme, which brings colder than normal temperatures across western Europe.
Typhoon Yagi, a deadly and highly destructive tropical cyclone in Asia, hit Southeast Asian countries and damaged coffee production areas, giving further rise to coffee prices.
- Coffee prices would double due to global inflation
At the same time, reports that the EU is preparing to postpone issuing new rules to prevent the import of some products produced by damaging forest areas for a year influenced coffee prices to go up. The products include soybeans, beef, palm oil, wood, cocoa, and coffee.
Giuseppe Lavazza, CEO of the Italian coffeemaker Lavazza, said that coffee prices would double due to global inflation and climate change.
Zafer Ergezen, a Turkish economist, told Anadolu that the rise in coffee prices was not much of a surprise, as the weather changes in Brazil, the world’s largest coffee producer and exporter, became a driving force.
Ergezen stated that the weather transition from El Nino to La Nina phenomenon resulted in relatively low rainfall in Brazil, fueling concerns over the flowering of coffee trees.
He noted that concerns over low yields in Southeast Asia, especially in Vietnam, and the reluctance of farmers to sell their crops due to higher prices changed the direction of pricing in coffee.
He added that production estimates and weather conditions in Brazil will play an important role in coffee prices now, as there may be changes, which could affect the direction of pricing, noting that the upward trend in coffee prices will continue for a while.
*Writing by Emir Yildirim