Global coffee prices have been changing by as much as 7% week to week — a direct result of ongoing trade wars, increasingly felt not only by financial investors but also by everyday consumers, including those in Poland.
After the first three quarters of this year, coffee prices in Polish stores are up an average of 22.6%, and ground coffee alone has risen by 28.8%. The spike is primarily driven by turbulence on the global commodities market.
Year-on-year, coffee has become 48% more expensive worldwide. In September its price again reached 420 cents per pound, the highest level since February. It came within just 5% of the all-time record for arabica — before pulling back.
The initial price surge was triggered by a lack of rainfall in Brazil, the world’s largest coffee producer, just as coffee trees were preparing for the next growing season. Prices began retreating only after more optimistic weather forecasts emerged.
Trade wars have added fuel to the fire. Donald Trump imposed steep tariffs on Brazil, pressuring its judiciary to drop charges against former president Jair Bolsonaro. The move failed — in September the Brazilian Supreme Court sentenced Bolsonaro to 27 years and 3 months in prison for orchestrating the January 8, 2023 attack on government institutions in Brasília in an attempted coup. That ruling effectively meant that at a global price of 400 cents per pound, Americans must pay closer to 600 cents.
“Brazil is the world’s largest coffee producer, and the U.S. is one of its major buyers — one-third of the coffee consumed in America comes from Brazil,” says Michał Stajniak, Deputy Head of Analysis at XTB, in an interview with MarketNews24. “Finding an equivalent volume elsewhere on short notice proved very difficult — which led the U.S. to aggressively bid up global prices. Americans are now experiencing the sharpest coffee price spike since 1999.”
For individual consumers in Poland, the price increase may not feel drastic given coffee’s relatively small share in household budgets. But for business owners, especially cafés, the difference is already significant.
However, Poles will feel it strongly when visiting New York — one of the world’s most expensive cities — where a simple cup of coffee can now cost $5 to $7.
“What’s important is that price volatility on global coffee markets has become extremely high,” adds Stajniak.
Investors can gain exposure to coffee through futures contracts, coffee ETFs, shares of coffee-related companies, or indirectly via CFD contracts. The Bloomberg Coffee Index shows that while coffee rose 16% over the past 6 months, nearly 15% of that increase occurred in just the past month. Weekly price moves are currently reaching around 7%.
Source: ManagerPlus.pl
