Coffee market price information Coffee prices soar under the stimulation of extreme weather in Brazil

Extreme heat, devastating drought, severe frost. Today, extreme weather is creating nightmares for farmers around the world and higher living costs for people everywhere.

Arabica coffee futures have nearly doubled in the past year and are at their highest level in seven years as brazil struggles with a poor crop this year.

Battered by Brazil's drought and frost, sugar prices rose along with coffee prices, and wheat prices soared to an eight-year high.

CNN's Aug. 13 article pointed out that climate change is driving up people's consumption at the table, and the prices of commodities such as sugar and coffee are soaring as extreme weather affects global agriculture. Sugar and coffee futures have risen more than 50 percent in the past year. The Bloomberg Commodity Index is up nearly 35 percent.

prices soared

According to the FAO, world food prices have risen 31 percent over the past year. Supply shortages caused by extreme weather are among the factors contributing to higher food prices.

Robert Yawger, who has 35 years of experience in the commodities industry, said he was no stranger to rising agricultural prices, but unlike previous ones, this one was not driven by factors such as emerging market demand or a weak dollar.

Yager, executive director of energy futures at Mizuho Securities, said climate disasters in the past did not cause all prices to rise at once, but it has never been like this-all commodity prices have soared together.

According to Swiss Re, the world's largest insurance company, severe weather-related natural disaster events caused $40 billion in losses in the first half of 2021 alone.

Labor shortages, rising transportation costs

Rising food prices may be driven by a variety of factors, some of which are unrelated to climate change.

Some food price increases are due to labor shortages caused by the impact of COVID-19. And the rise in oil prices has caused transportation costs to rise as well. Not to mention the increase in packaging costs.

crop failures

Climate change is increasing the frequency and severity of droughts, according to the UN Intergovernmental Panel on Climate Change. Drought, which occurred only once in the past decade, is now occurring 70 per cent more frequently around the world.

Brazil is still in a severe drought period, with cumulative rainfall in parts of Brazil from March to July this year falling sharply from the same period in 2019 and compared with the same period in 2020, according to an article on Aug.12 by Coffee Financial Network.

Coffee and sugar prices are firm

A severe frost has damaged Brazil's coffee crop, raising fears of a serious yield drop.

Bartashus, an analyst at Bloomberg Intelligence, said that if demand stays the same or even grows with restaurant openings, but supply is constrained, this naturally translates into higher prices that consumers will eventually pay for.

Although coffee prices have fallen back, a frost in Brazil could reverse that trend. Because big companies buy coffee beans (and other goods) differently, the impact on consumers may not be immediately apparent.

However, according to Reuters news on August 9, the market expects Arabica coffee to rise to 200 cents per pound by the end of the year.