Coffee Chaos: Skyrocketing Prices and Global Impact

Global coffee prices have surged to nearly 50-year highs due to adverse weather in Brazil and Vietnam. This has pressured roasters like Nestle to raise prices, prompting consumers to seek cheaper alternatives. Farmers benefit from high prices, but traders face significant challenges due to hedging costs and supply issues.

Global coffee prices have surged to their highest in nearly 50 years, driven by poor weather conditions in major producing countries Brazil and Vietnam. This has seen companies like Nestle compelled to raise prices, while consumers search for cheaper options amidst the ongoing cost-of-living crisis.

Farmers stand to gain from this year's elevated prices, yet traders are confronting significant hurdles with exorbitant hedging costs and fierce competition to secure pre-purchased beans. Production challenges in Brazil and Vietnam have led to a global supply deficit persisting for three years.

The coffee industry faces further strain with traders Atlantica and Cafebras entering court-supervised debt restructuring due to surging prices and delivery delays. Meanwhile, roasters and consumers brace for a ripple effect from these soaring costs, affecting market dynamics and pricing strategies.

(With inputs from agencies.)