"Morning Coffee is a Luxury" Hits Highest Level in Half a Century... Mixed Coffee Prices Also Rising One After Another [AK Radio]

Brazil and Vietnam See Sharp Decline in Coffee Bean Production
Global Warming Shrinks Coffee Growing Regions
Trump's "Tariff War" Adds to Price Pressures

As coffee bean prices surge worldwide, the domestic coffee market is also facing a crisis. Recently, major coffee brands have successively raised their prices, with coffee bean prices soaring to their highest levels in nearly half a century.

Consequently, the price increases are affecting not only Americano coffee enjoyed at cafes but also instant mix coffee consumed at home. Experts predict that with President Trump's tariff war adding fuel to the fire, the upward trend in coffee bean prices is unlikely to subside anytime soon.

Currently, the price of Arabica beans, the main ingredient in Americano coffee, has risen by more than 95% compared to the same period last year as of last month. The price of Robusta beans, the primary ingredient in mix coffee, has also skyrocketed by over 73%. Looking at the London Robusta coffee futures prices, they surged from $2,040 in 2023 to $5,631 in early February 2025, an increase of about 2.5 times.

The main cause of this sharp rise in coffee prices is abnormal weather caused by global warming. In Brazil, the world's largest producer of Arabica beans, a severe drought began last summer, significantly reducing bean production. Vietnam, the largest producer of Robusta beans, suffered from drought and pests, and in winter, typhoon damage further devastated coffee trees, causing massive die-offs. As a result, supply difficulties in major coffee-producing countries have triggered a global coffee market emergency.

Market experts expect that supply levels will not return to normal until this summer. Therefore, the impact of soaring coffee prices is expected to continue for the next five to six months. What is even more concerning is that this rise in coffee prices may not be a short-term phenomenon. The coffee bean cultivation areas themselves are shrinking due to abnormal weather.

AFP·Yonhap News

In particular, Arabica beans require cultivation in high-altitude regions with significant temperature differences between day and night to ensure quality. However, ongoing abnormal weather such as high temperatures, heavy rains, and droughts caused by global warming are continuously reducing arable land. If warming continues, even high-altitude areas will experience rising temperatures, gradually eliminating the cool regions suitable for coffee cultivation.

Experts warn that by 2050, nearly half of the current coffee bean cultivation areas in Brazil, Central and South American countries, Southeast Asia, and India could disappear. Another issue is that coffee farmers, facing production and supply difficulties, are switching crops to natural rubber trees or other fruit trees instead of coffee. This reduction in coffee farming households increases the likelihood of continued long-term coffee price rises.

Additionally, President Trump's tariff war is also contributing to the rise in coffee prices. On the 26th of last month, President Trump announced a 25% tariff on Colombia, the world's third-largest coffee producer, but withdrew it after nine hours. Although the tariff was not actually imposed, the announcement triggered panic in the market, leading to hoarding of coffee beans and a sharp price increase. In the United States, where prices have already risen significantly, widespread hoarding of daily necessities is occurring, and European countries with high coffee demand have also joined in hoarding beans, pushing coffee prices even higher.

The tariff war can severely impact commodity markets even with just announcements. Concerns over export tariffs to the U.S. and spreading market anxiety simultaneously affect prices of other essentials and oil. This leads to increased coffee production costs. Combined with fluctuations in the U.S. dollar exchange rate, a triple burden of export tariffs, production costs, and exchange rates forms, inevitably causing prices to soar.

Major coffee brands are taking this situation seriously. However, it is not easy to raise prices sharply. The coffee market is rapidly expanding in traditionally tea-drinking countries such as China, India, and Southeast Asia, and a significant price increase could slow growth in these emerging markets.

Accordingly, the coffee industry is also exploring technical alternatives. Research is underway on "shade cultivation," a method of growing coffee under large fruit trees or in shaded areas. If successful, coffee could be cultivated even in shaded urban areas.

Additionally, active research is being conducted on "alternative coffee," which uses other substitute crops to create flavors as close as possible to coffee. However, even if technological development succeeds, it is expected to take considerable time to replace the existing massive coffee bean market.

Experts predict that to fundamentally resolve the bean supply shortage, urgent measures to combat global warming are necessary, and the indiscriminate tariff war by the Trump administration must be limited for coffee prices to stabilize. As the leisurely morning cup of coffee enjoyed daily gradually becomes a luxury, coffee lovers are likely to face difficult times ahead.