The coffee market is experiencing record price increases: what does this mean for consumers?

Coffee prices surged 40% in the first six months of this year due to severe supply constraints caused by drought in the world's largest supplier, Vietnam. According to the Bloomberg agency, such a price increase was the result of problems with the harvest of the robusta variety, which has been facing difficult conditions for the fourth year in a row.

Drought has affected production in Vietnam and caused severe crop losses, potentially leading to shortages of this variety on world markets. On top of that, Brazil, the world's largest producer of Arabica coffee, is also experiencing an unexpectedly low harvest, further complicating the global market.

The increase in prices is a direct consequence of the decrease in supply. According to StoneX's Albert Scully, the global market could become more strained as demand exceeds supply by 5.6 million bags, according to US government forecasts, which in turn could lead to significant price volatility in the market.

Against the backdrop of these developments, robusta coffee futures are on pace for their highest price rally in the first six months since 2008, while arabica is on track for its best price start to the year since 2021.

This increase in price may be reflected in consumer coffee prices worldwide, forcing producers and retailers to adapt to new market conditions. Ukraine, like other countries, will not remain aloof from this trend, which may affect the cost of coffee for every consumer in the country.