In recent years, the cost of coffee has decreased dramatically, causing many consumers to question why. This trend is influenced by a number of reasons, such as excess supply, decreased demand, and shifting customer tastes.
Oversupply is one of the key causes of the decline in coffee prices. There are too many coffee beans on the market as a result of tremendous production growth among coffee growers worldwide in recent years. As farmers and traders try to sell their coffee before it spoils, this overstock has caused prices to fall.
Furthermore, Brazil, Vietnam, and Colombia are the top three coffee-producing countries. About one-third of the world’s coffee is produced in Brazil alone. Prices have fallen as a result of the oversupply caused by the increased production from these nations.
Reduced demand is another factor influencing the decline in coffee prices. The COVID-19 pandemic has caused a large number of coffee shops and cafés to cease or scale back their operations, which has decreased the market for coffee beans. Additionally, a lot of people now work from home and make their own coffee rather than purchasing it from coffee shops.
The decline in coffee prices has also had an impact on the cost of coffee futures, which are contracts to purchase or sell coffee at a specified price and date in the future. Coffee futures were selling for about $1.70 per pound as of August 2021, down from over $2.50 per pound in 2019.
A contract for coffee futures typically equals 37,500 pounds of coffee beans, and the cost of a contract is set by the price of coffee on the open market. Depending on the state of the market, the price of a coffee futures contract can change, although it normally falls between a few thousand and tens of thousands of dollars.
Finally, the type of coffee bean affects the cost of the beverage. Robusta coffee beans are typically less expensive than arabica coffee beans, which are thought to be of superior quality. Robusta beans have a stronger, more bitter flavor than Arabica beans, which are sweeter and more delicate. Due to overproduction, even robusta coffee’s price has decreased.
In conclusion, a number of factors, such as an abundance of the product, a decline in demand, and a shift in customer tastes, can be blamed for the drop in coffee prices. Coffee dealers and growers all over the world have been impacted by this trend, although it is unclear how long it will last. For those who enjoy coffee, nevertheless, this might mean paying less for their morning drink.
It is challenging to pinpoint which nation has the least expensive coffee beans because costs might change depending on production, transportation, and demand. Brazil, Vietnam, and Indonesia are a few nations that are renowned for producing low-cost coffee beans.
Contrary to popular belief, robusta coffee is actually less expensive than arabica, which is regarded as being of superior quality. Due to a number of variables, including oversupply, shifting customer preferences, and the effects of climate change on coffee production, the price of coffee has been declining generally. However, the actual cost of robusta versus arabica coffee might change based on the state of the market and other elements.