Coffee Prices Set to Climb Further Amid Supply Challenges

Coffee prices in Sweden's grocery sector are being negotiated in ten-week cycles, with a new period set to commence on Monday. Consumers can expect a price increase as the cost of coffee beans has surged dramatically.

Anders Thorén, a communications officer at Löfbergs, attributes this spike to extreme weather conditions and climate change, which have adversely affected harvests. He notes that current prices are reaching unprecedented levels, indicating that further increases are inevitable.

According to the latest Consumer Price Index from SCB, food prices in Sweden generally rose in February, but coffee saw a notable increase, climbing nearly 11 percent compared to January and 28 percent year-on-year.

A survey by Löfbergs, labeled "Kafferapporten," reveals that eight out of ten Swedes regularly consume coffee. Ulf Lindvall, who runs the family business Lindvalls Kaffe, highlights multiple factors contributing to the rising coffee prices. A drought in Vietnam has led to a shortage of robusta beans, increasing the demand for arabica beans. Furthermore, security issues in the Red Sea have driven up shipping costs for robusta, forcing suppliers to seek alternative routes.

Lindvall explains that major consumers of robusta beans had to pivot to sourcing the milder arabica variety. However, Brazil experienced a significant lack of rainfall from spring through October, further complicating supply.

As retailers prepare for the upcoming price adjustments, many are informing customers via social media about the anticipated increases. Some outlets are warning of potential hikes of up to 20 kronor per package. Martin Ekman from Ica Kvantum in Landvetter expressed his concern over the impact of these price hikes on consumers and encouraged them to stock up before the prices rise.

Coffee prices are influenced by trading on a commodities exchange in New York. Last year, the price of unroasted coffee beans soared by 70%, and there has already been an increase of over 20% this year, as reported by Reuters. However, the final retail price may not reflect the full extent of these increases since many factors influence the pricing of each individual package.

Typically, it takes about a year for price increases of coffee beans to fully impact consumers, according to a report from the FAO. The report also indicates that these price effects could persist for at least four years.

While North America and Europe are the largest coffee consumers, the growing demand for coffee in other regions is contributing to the current price surge. Thorén emphasizes that while coffee prices are rising, even with the expected increases, a cup of coffee will still cost less than a glass of milk, soda, or juice.

For more information on the rising coffee prices and their implications, stay tuned for further updates.