Corona and coffee - are coffee prices going up now?

Public life has been at a standstill for a week now. Exit restrictions, home office and shutdown restrict people worldwide and turn all our lives upside down. Restaurants, bars, pubs and coffee houses have to keep closed and suffer from the consequences of the lockdown. Shutdown factories and interrupted supply chains cause sometimes blatant delivery problems. Experts even expect prices to rise in the coming months.

Lower demand depresses prices

At the beginning of the corona epidemic, the shutdown led to an initial decline in global demand for coffee. In China alone Starbucks had to close more than half of its 4300 shops. Accordingly, the raw material prices for coffee fell into the cellar for the time being. But in the meantime, prices have already recovered from their low by more than 20% and a further increase cannot be ruled out. All over the world, people seem to be stocking up on coffee. The high demand for the popular pick-me-up brings a lot of work for coffee traders and roasters.

Are supply bottlenecks looming?

Two types of coffee in particular play a major role on the world market: Arabica and Robusta. Arabica beans account for around 60 percent of the global supply. Large coffee roasters such as Lavazza or Nestle are currently replenishing their stocks. They are afraid that supply bottlenecks could occur more frequently due to the corona effects. This is why many coffee traders prefer to place their orders. If there are any failures in harvesting, production and delivery, at least the warehouses are full. The fear of delivery difficulties could drive the price of coffee and lead to new highs. How the price will develop in the future depends on several factors. A record harvest is expected for 2020, which does not speak for rising prices. On the other hand, further interruptions in supply can be expected at any time as a result of Corona. Experts therefore expect the price of coffee to be more volatile during the crisis.

Harvest season begins at the end of April

At the end of April and beginning of May, the harvest of coffee beans begins in Central and South America. In Honduras alone, exports in April slumped by about 20% compared to the previous year. Due to the exceptional situation surrounding the corona measures and the drop in coffee prices, the production of the largest Central American coffee producer fell considerably. But this could change. Brazil in particular is expected to have a record harvest in 2020. However, it is currently still unclear whether the beans can be harvested and exported due to the corona epidemic. In many countries a shutdown has been in force since March. The curfews and restrictions could lead to a shortage of workers. Restricted freight capacities and difficulties in loading the goods in Brazilian ports are already causing problems time and again. So it remains to be seen whether the production and export of the popular wake-up call will continue to function without problems and whether we will be able to enjoy our favourite drink at the usual prices in the future.