Commodities: coffee also among the stars for rising prices
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Posted by MoneyController on 24.09.2024
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Among commodities, coffee has also seen its price rise significantly. Maria Teresa Manuelli writes about this in ‘Il Sole 24 Ore’.
Manuelli writes that the Italian consumer association Assoutenti expects the price of robusta variety coffee to increase by 68 per cent this year. This is no small matter for the European Union, which is the world's leading importer of green coffee. As stated in Manuelli's article, the EU accounts for 34% of the global market. The most imported variety in Europe is Arabica (about two thirds of the total), followed by Robusta coffee (about one third of the total).
Let us now turn to other data also reported in the article in ‘Il Sole 24 Ore’ by Maria Teresa Manuelli; these data were notably made available by Areté, an international agrifood intelligence company, on the financial market The Ice. By March 2024, therefore, the robusta coffee variety had increased by 27%, while the arabica variety by no less than 36%.
But what is driving the price of coffee up so much? There are more than one factors here. It starts with fears related to climate trends. Then there are the dynamics of the market itself: Indonesia's production, for example, has slumped by 20%, but this has been partly offset by strong Brazilian exports. Added to this are the higher transport costs due to the tense situation in the Red Sea. Finally - but perhaps one could go on - explains Manuelli there are reasons attributable to both inflation and speculation.
Also in the same article in ‘Il Sole 24 Ore’, Filippo Roda, senior analyst at Areté, explains that while it is true that the price in recent months has been fuelled by speculation, it is equally true that in the medium term prices could remain sustained by a supply deficit: in fact, climatic events not only threaten the next harvest, but have already caused (due to the less rich harvests of recent years) coffee stocks to fall.
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