"Starbucks Prices Rising Again?"... Coffee Bean Prices Break 47-Year High

Coffee Bean Prices Hit Highest in 47 Years
Due to Brazil Drought and Trump’s Second-Term Trade Policies
Will the Coffee Industry Continue Relay Price Increases?

The price of Arabica coffee beans has surged to its highest level in 47 years since 1977. This is due to droughts in Brazil, the world's largest coffee producer, and concerns over trade policies under the 'Trump 2.0' administration. As a result, there are growing fears that 'coffeeflation' will become a reality.

According to foreign media such as AFP and Bloomberg on the 27th (local time), the price of Arabica coffee futures in the New York market rose to $3.20 per pound. This is the highest level since 1977, when it was $3.38. The price of Arabica beans has increased by about 70% just this year. The Robusta variety, mainly used for instant coffee or blending, is trading at around $5,200 per ton in the London market. Its price increase rate has also exceeded 80% this year.

The surge in coffee bean prices began as severe droughts in Brazil this year raised concerns about next year's coffee harvest. In another major producing country, Vietnam, dry weather during the growing season and heavy rains during the harvest season have added to supply concerns. Carlos Mera, an analyst at Rabobank, explained, "The rise is due not only to concerns about Brazil's supply next year but also to EU forest regulations, increased pre-purchasing in preparation for tariffs and trade disputes anticipated by Donald Trump's election."

There are concerns that price adjustments in the coffee industry will be inevitable due to the rise in bean prices. Already, Nestl?, the world's largest coffee producer, recently stated that "coffee prices will need to be raised and packaging sizes reduced" due to the increase in bean prices. Earlier, in August, Starbucks, the industry leader, adjusted coffee prices for the first time in two years and seven months. As of July 30, when Starbucks announced the price adjustment, the price of Arabica beans traded in the New York market was $5,088.22 per ton, up 40.2% compared to the same period last year. Accordingly, Starbucks raised the prices of all drinks by 300 KRW and 600 KRW for Grande (473 ml) and Venti (591 ml) sizes, respectively.