A shortage of beans increases the cost of even the cheapest cup of coffee

A shortage of beans increases the cost of even the cheapest cup of coffee


(Bloomberg) — The global cost-of-living crisis has pushed coffee drinkers to get their fix from cheaper brews. But due to a shortage of robusta beans, it is becoming increasingly difficult to find a budget-friendly cup.

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While many coffee aficionados prefer high-quality arabica beans sold in cafes, robusta is normally less expensive because the tree is tougher and requires less care, making it easier to produce in large quantities. The variety is commonly used in instant coffees, espressos, and ground blends sold in supermarkets, which have made a comeback as cash-strapped consumers look for alternatives.

However, key growers are struggling to keep up with strong demand, with wholesale prices this week reaching their highest level in nearly a dozen years.

For consumers in Europe’s largest coffee market, Germany, the tightness is having a noticeable effect on retail costs, with instant varieties rising nearly 20% more than a year ago, even as inflation for coffee beans has lost momentum. The price increase of instant coffee in the US also slowed less than the roasted version in April.

The odds of global robusta shortages easing any time soon look bleak. Vietnam – the world’s largest producer – has reported its smallest harvest in four years, after farmers focused on planting more profitable crops like avocados and durians to cope with rising fertilizer costs in the wake of Russia’s invasion of Ukraine .

Brazil, the second largest producer of the variety, has been hit by a drought and there are also concerns that Indonesia’s yield will suffer from heavy rainfall.

Despite these hurdles, more robusta beans were exported worldwide in the first six months of the current season compared to the past three years, just not fast enough to meet the higher needs. According to the International Coffee Organization, shipments between October and March were about 4% higher than the same period in 2021-22.

“The demand for more expensive coffee has shifted so much that even the market is not even satisfied with higher robusta exports,” said Judith Ganes, who runs a consultancy focused on commodities such as coffee in New York.

The switch was first seen with roasters who increased the amount of robusta in commercial blends to offset higher arabica costs and energy bills. Subsequently, double-digit inflation in many parts of the world pushed grocery bills to their highest in decades, forcing some consumers to trade for cheaper options.

As a result, robusta-heavy instant coffee is growing faster than other industry segments, according to Aguinaldo Lima of the Brazilian Instant Coffee Industry Association, whose country is the world’s largest producer of instant coffee. And leading companies elsewhere, such as India’s Nestle SA and Tata Coffee, also report stronger demand for instant coffee in their latest financial reports.

While robusta beans are known to be significantly more bitter than the arabica variety—partly due to higher caffeine levels—both Vietnam and Indonesia have improved the quality of their beans, making it easier for roasters to increase variety in blends without sacrificing quality. beans drastically. the taste, according to Ganes.

Consumers can discover “very interesting flavors” by drinking robustas, even if the taste is different from arabica coffee, said Daniel Munari, a barista who also runs Royalty Quality Cafe in southern Brazil.

“There’s sweetness and acidity, which are a great addition and give balance to the drink,” he said.

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