Tennessee Tech School Of Agricuture Director said record high coffee prices will likely continue worldwide as trade tensions worsen.
The average retail price of ground roast coffee reached a record high of $9.14 per pound. Director Jinfa Zhang said coffee-producing countries like Brazil and Columbia cannot produce enough coffee to supply America’s hefty demand of 10 lbs per capita.
“The increase of the population certainly drives the demand for more coffee consumption, right,” Zheng said. “So you factor two-thirds of Americans drink coffee so some of us drink two to three cups a day, even more.”
Zhang said the U.S. imports 80 percent of coffee beans from Brazil and Columbia, with Brazil producing 40 percent of the countries’ coffee beans. Brazil and Columbia experienced a drought this year, seeing a significant decline in coffee bean production.
Zhang said Brazil is the third largest coffee producer in the world. Zhang said coffee season lasted from May to September, when Brazil experienced the drought.
“Weather conditions, especially drought, really affect coffee production,” Zhang said. “Especially during the flowering stage.”
Zhang said during the coffee plant flowering period, a drought can affect a coffee plant’s ability to produce flowers and fruit. Zhang said soil fertility problems in these regions can affect production. Zhang said these problems cause the production of coffee to decline.
Zhang said trade conflict between the U.S. and Brazil led to hefty export costs to be placed on coffee producing countries, causing those countries to withhold product from American markets. Zhang said this caused the U.S. coffee prices to increase, as well.
“But our major providers of coffee to the U.S., so they face the ways of production problems they are faced with trade disputes and they are faced with supply chain issues,” Zhang said. “So all those are certainly combined.”
Zhang said supply and demand should reach an equilibrium, lowering the price next year.
“When the price is now is this high, the production next year will be higher,” Zheng said. “So this high demand will drive more production.”
