38 STiR coffee and tea | 2022 Issue 5 (October/November)
Y
By Carrie Pallardy
ou pay a price for coffee, and it's going up. Inflation rates all around the world
are rising to a 40-year peak in 2022.
In an analysis of 44 leading economies by Pew Research Center, a U.S.
think tank, 37 countries saw inflation that was twice as high during the year's first
quarter compared to two years before, when the pandemic was just starting. In 16
countries, the rate was up four times. The war in Ukraine and its impact on prices for
energy and logistics has been a major factor driving inflation.
What about the coffee industry itself? Green coffee prices are up. Labor is more
expensive. So are other costs. To successfully manage through this period, companies
need to watch consumer spending habits and keep an eye on inflationary pressures
throughout the supply chain.
Coffee companies are paying more for raw product, thanks not only to inflation
but factors like production challenges related to weather in Brazil. Green coffee prices
went up from July to August 2022, according to the International Coffee Organization
(ICO) Composite Price Index. Green coffee average US$200.11/pound, up 4.9% over
that period. Robusta increased the most, reaching an average of US$109.65/pound in
August, up 9.2% from July.
Inflation Squeezes
Coffee
Cost pressures have risen sharply throughout the coffee
industry's supply chain in 2022
In dozens of high-income
countries throughout
the world, inflation rates
were twice as high during
the first quarter as
two years ago.
