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Drought Destroys Coffee, Prices Surge Higher

By Douglas McIntyre • December 14, 2024

Coffee trading firm Volcafe sharply cut its estimate for the coffee crop in Brazil. The South American nation is the world’s largest provider of popular arabica beans.

According to Bloomberg, “Brazil is seen producing just 34.4 million bags of the premium arabica bean in the coming season, down by about 11 million bags from a September estimate.” The country has been hit by unprecedented drought, which has been blamed on climate change.

*More Coffee Data

*Prices Hit 47 Year High

*Dought Hits Starbucks

The price of arabica beans is up 80%. The bean price hit the highest level in history. This price has been passed on to consumers at coffee chains like Starbucks, and coffee is bought for private use.

“The loss of Brazil’s 2025-26 arabica crop is a critical flag to the outlook for the market structure,” Volcafe commented about the trend.

Starbucks And Dunkin’ Donuts

Starbucks, Dunkin Donuts, and McDonald’s may be among the victims of high coffee prices. They will have to balance what they pay for coffee beans against what customers are willing to pay for a cup of coffee.

And those who make their coffee face a similar hurdle. Drink less coffee or pay more for the coffee they drink.