Coffee prices have surged to their highest level in four years, spurred by an increase in at-home consumption during the pandemic that appears to be sticking.
Futures for robusta coffee reached $2,018 a ton on Aug. 27, their highest level since 2017. Futures for Arabica, a higher-quality bean used for premium or specialty coffee, went up 3% in August after rising 18% in July.
Coffee prices have been rising steadily over the long term, due largely to global warming that pushes coffee plants out of the temperature range they need. This is especially true for Arabica, which needs cool temperatures and is often grown on mountain slopes; farmers in South America and elsewhere have literally been retreating up mountains, in search of cooler weather as the atmosphere warms.
Companies with a big retail presence in coffee, like J.M. Smucker, are saying that they will have to account for rising costs soon, possibly by raising their own prices. But Nestlé, which markets Nescafé instant products and the Nespresso pod-brewing system, said a few months ago that coffee was a strong driver for overall growth in its first quarter.
Nespresso was hurt by consumers staying home from offices, where coffee machines are more likely to be used, but it partially made up the difference through increased e-commerce sales.
