Do you think the coffee has become far too expensive lately? This is largely due to the lack of rain in Brazil.
And now fate weeks are expected for what will happen to the coffee price – depending on whether there is any rainfall or not.
Every morning, Ulf Lindvall checks the weather forecasts for a variety of regions in Brazil.
As CEO of the family company Lindvall’s coffee, founded as early as 1891, the Brazilian weather has enormous importance for his business and ultimately also for the coffee consumer.
Now it looks like it is getting dry in Brazil, which is not good at all. It must start raining in March-April as well. If it does not, it will not be fun at all, he says scratch.
Leading producer
Brazil is then more than a century the world’s leading producer of coffee beans, most likely have some of the cups of coffee you drink its origin from one of the country’s many coffee plantations. That is also why it is so crucial for the world market price of coffee beans how the weather develops in the country.
If the rain comes back, Brazil gets a decimated harvest but after all a harvest. It will keep the market pretty calm at these price levels. If it gets dry, I don’t know what’s going on. Then it can explode even more upwards, says Ulf Lindvall.
The fact that a package of coffee can now cost up to SEK 70-80 in the store is linked to the price trend for the Arabic Palace on the Råvarallsen in New York. From a level of about $ 170 per pound in May 2024, the price has rushed and was at the beginning of February this year at almost $ 450. The background to this is precisely drought and fires in Brazil that came to adversely affect the harvest.
Another challenge for Swedish players like Lindvalls is the high dollar exchange rate even though it has recently backed against the Crown.
We have costs in dollars but revenue in Swedish kronor and it has not been so much fun for a while. The crown reinforcement at least dampens a little our problems, but compared to the huge rise in price (on coffee beans), the crown reinforcement is not so small, says Ulf Lindvall.
Underlying causes
No matter how the next few weeks and harvest develop, however, Ulf Lindvall points to a larger and broader perspective. The underlying causes mean that such prices in the future can become a norm:
It is the weather phenomenon that causes this and if it is now climate change that causes this extreme weather then nothing says it will be better in the future. I am worried that we will get used to the fact that coffee prices will be at these levels.
Facts: The coffee price
In the past year, the term price of coffee beans has rushed and reached levels that have not been seen since the 1970s.
The background is mainly unfavorable weather conditions with, among other things, the worst drought that hit Brazil ever when it basically did not rain anything from the spring of 2024 until autumn.
In the coffee market there are two types of coffee beans, Arabica and Robusta, respectively, where Arabica traditionally is the more expensive alternative and is also considered somewhat “finer”. Robusta contains more caffeine and is therefore used for example for espresso.
Brazil is the world’s largest producer of Arabica, while Vietnam is the market leader when it comes to robust.