Really bad news for coffee lovers in South Africa

 ·13 Jan 2025

South African coffee drinkers should expect coffee prices to remain high—or climb even higher—in 2025, as global producers suffer from poor crops, with more of the same to come.

This is according to the Chief Economist of the Agricultural Business Chamber of South Africa, Wandile Sihlobo, who recently crunched the numbers on local imports.

According to Sihlobo, South Africa imported almost 24 000 tonnes per annum in the past five years, mostly from two countries, Brazil and Vietnam, which account for 54% of imported beans.

“We import from both, and both have serious weather challenges—drought and heavy rains in the case of Vietnam—which have affected production,” the economist said.

“While other countries have relatively stable production, the largest producers, Brazil and Vietnam, have had bad seasons. The consequence is the lower global production, which has increased coffee prices globally.

“More worrying is that the coffee bean production forecasts for 2025 are not looking good either. The production challenge may persist in Brazil and Vietnam, thus keeping coffee prices elevated for some time.”

Sihlobo said that South Africa has few options to circumvent the problem, noting that sourcing beans from other countries would incur additional costs and push prices in a similar direction.

One major issue is supply: three countries (Brazil, Vietnam and Colombia) account for two-thirds of the world’s coffee production.

FNB agricultural economist Paul Makube noted that there is simply no alternative source that can adequately fill the gap left by the Brazil and Vietnam crop failures.

The other major issue is demand, with Sihlobo noting that there has been a surge in demand for coffee in China, which is up over 150% in the last decade.

So there is a growing demand for a commodity at a time that supplies are under severe pressure. This means that prices are facing only one direction – up.

Globally, coffee prices surged by over 70% in 2024, with robusta coffee beans reaching a 47-year high in August.

Nestlé warned that coffee prices could climb by another 30% to 40% in 2025.

Local pricing in 2024 reflects this as well, with Stats SA’s latest consumer price inflation (November 2024) figures showing a 12% % to 19% increase in pricing for coffee (beans and instant) year-on-year and a 10% to 16% increase since January 2024.

“Regardless of where South Africa imports coffee, we will not escape the current upside cost pressures that coffee shops will soon pass on to consumers,” Sihlobo said..


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