Unpleasant news for coffee lovers: it will soon become much more expensive in Lithuania, it may be missing

This year, thunderous verses from the world’s largest coffee exporter, Brazil, have spooked the coffee market as needed. On the stock market, coffee bean prices have skyrocketed this year. However, the worst forecasts did not materialize, the harvest froze, so the supply of coffee did not decrease. However, there are worrying logistical problems: the repeated increase in container prices and their shortages.

Prices in stores do not rise sharply

Petras Čepkauskas, head of the food department of the price comparison portal Pricer.lt. Delphi he says the price of coffee sold in retail chains has yet to rise.

“Based on our observations, prices in supermarkets are not rising dramatically yet, but some chains are ditching cheaper coffee, which may reduce the number of stocks,” he says.

Like it shows Pricer.lt According to the study, the price of Jakobs Kronung, the main ground coffee in which retail chains compete, is stable, with the price of a 500g pack dropping to € 2.99 during shares, and typically not rising more than € 4.99.

Prices jumped in the stock market

However, since coffee beans are a commodity, their price on the stock market has risen since December last year. For example, since the beginning of this year, Arabica beans have risen 40 percent on the stock market and, in recent years, as much as 60 percent. However, P. Čepkauskas points out that these are not historical records.

“If we look at the gross price of Arabica from the lowest point last year, it was $ 2.84 per kilogram. Now – $ 4.77 per kilogram. We have almost doubled our growth over the years. However, this is not the biggest rebound. 5 years ago, the gross price of Arabica was $ 5 per kilogram, 10 years ago it was even $ 6.

Another type of coffee, robusta, has risen from its lowest level in April last year, when it cost $ 1.41 a kilogram, to $ 2.1, “said the expert.

Darius Vėželis, the head of the Vero Cafe chain operating in Lithuania, points out that the price of coffee raw material has increased by about 80% compared to last year. According to him, the main reason for such price spikes is speculation and the dollar-euro exchange rate.

“The last price hike occurred in July this year. Speculation is based on frost, as frost can only affect next year’s harvest. The current coffee crop is excellent, already harvested and processed.

Another reason is logistics. Container shortages and logistics costs have now tripled. The price is also affected by this year’s harvest in Vietnam, the unrest in Colombia and the insecurity in Ethiopia, ”he commented.

According to D. Vėželis, the consequences of Brazilian elements are also being felt in Lithuania: “We are currently buying more expensive raw materials. The price hike is inevitable and is expected this fall. “

We will feel the biggest jump after the new year.

P. Čepkauskas predicts that coffee prices in retail chains may increase by about 30% by the end of the year. Give an example of the popular Lavazza Arab coffee: if its prices now start at 2.99 euros, by the end of the year prices will be around 3.99 euros.

Consumers are likely to see the biggest price jump after the New Year. According to P. Čepkauskas, not only the price of the coffee beans is to blame, but also the logistics: the containers became more expensive several times, as well as the energy for roasting.

“The chain stores have stocks for stocks, we will definitely see this before the New Good Deals, maybe just a little less often. Later next year, prices are sure to go up around 50 percent.

The increase in the prices of raw materials in Brazil will not only contribute to this. Commodity prices are forecast to rise by as much as 20 percent. Turns out the harvest is not as bad as planned. However, logistics prices have risen sharply. Container transport has risen in price by 2 thousand. up to 12 thousand. euros. This problem was predicted in advance, I believe that many roasters and retailers have filled their stocks, they will stop high growth in the near future ”, says the head of food business at Pricer.lt.

In stores, prices are rising slightly

Coffee prices are rising slightly at Maxima stores. However, according to Ernesta Dapkienė, Director of the Communication and Image Department at Maxima, we are constantly looking for mutual solutions with suppliers so that customers do not feel significant price changes.

“Currently, we are seeing slight changes in the prices of some coffee brands. This was due to the higher cost of transporting raw materials and sea containers.

On the stock market, coffee bean prices have skyrocketed this year. This was also affected by frost in Brazil, which affected around 11 percent. of all the plantations of this largest coffee exporter in the world. As the supply of Arabica decreases, the need for and the price of robusta increases, ”he says.

We will see the highest prices in the cafes.

However, as P. Čepkauskas points out, visitors to cafes will feel more of the rise in coffee prices.

“We will see strong growth in cafes, due to rising personnel costs, energy and related rental prices.

I suspect that the price of coffee could go up 50 percent compared to the summer. or even double. If a cup of coffee now costs between 2 and 2.5 euros, the price can go up to 3.5 euros. Very soon, in November, I think we will see 2.99 euros ”, predicts a representative of Pricer.lt.

What makes up the price of coffee

The price expert gave an example of what constitutes the total price of a cup of coffee. The price includes the costs and taxes of electricity, equipment, logistics, staff salaries, room rental, milk, disposable cup.

Such a cup of coffee is reflected in the article and image of The Financial Times.

In the UK, a £ 2.5 cup of coffee includes: rent £ 0.88, wages £ 0.66, taxes £ 0.38, earnings £ 0.25, cups £ 0.18, milk £ 0, £ 1, coffee – £ 0.1.

So for a £ 2.5 cup of coffee, the price of the coffee raw material itself is only 4%. prices (about 10 cents) when rents, wages, and taxes account for three-quarters of the total price.

The price of the coffee raw material (10 cents) includes: costs of cultivation (1 cent), harvester (0.5 cents), exporter (0.2 cents), transportation (0.3 cents), roaster (8 cents). So even 80 percent. The prices of the coffee raw material go to the roaster and to the producer only 10 percent.

According to these calculations, the main factor in the general increase in the price of coffee is the increase in the cost of wages and rents.

In cafes, coffee went up 15 cents

A cup of coffee at Vero Cafe starting September 1. an average increase of 15 cents. According to the owner of the chain, the rise in prices was influenced not only by the rise in prices of coffee raw materials, but also by other raw materials used in the range, such as disposable cups. The unstable global situation of COVID-19 and Brexit caused problems here.

“We pay close attention to announcing the possibility that customers who have a reusable cup will receive 10 percent. discount for coffee, “says D. Vėželis.

According to him, the pandemic had a greater impact on the coffee market last year: “Prices fell last year as coffee consumption fell dramatically due to the limitations of the pandemic. Furthermore, due to the pandemic, harvesting was also difficult in coffee-producing countries. Coffee consumption is increasing this year, but the current instability in the world has severely disrupted the logistics supply chain. “

The highest costs are amortized by the company itself

Vigintas Bartaševičius, Director of Reitain Convenience Lithuania, the company that manages Caffeine coffees in Lithuania Delphi says that so far there is no increase in coffee prices, but to answer when it will be – it cannot yet.

“Stock fluctuations affect us. As much as possible, we amortize it ourselves. If we can’t, we will have to raise the price. I don’t know when it will happen, maybe soon, maybe later. However, not just the price. Of raw materials it becomes more expensive, but also employees and everything else, logistics. Today, nothing is cheap. As long as we can, we will not raise prices, but we will see how it will be next, “says V. Bartaševičius.

According to him, the effects of natural disasters in Brazil have not yet been felt. The coffee shop chain continues to buy coffee from suppliers for the same price.

“The roasters buy the coffee beans from us. When we get more precise information from them about how much the prices increase, we will see. The shares are not bought for another day, it will probably respond a little later,” he says.

According to the interlocutor, the pandemic has a particularly strong impact on the coffee market: “I recently spoke with the carriers if a container to bring coffee costs 2,000. euros, now it costs 18-19 thousand. euros. These are huge increases in transportation costs. There is a problem with time, you do not know when you will get it, because there simply are not so many containers due to the high demand for various products. “

When asked when these cost increases will affect the price of coffee for the customer, V. Bartaševičius estimates that it will no longer be possible to cover the losses. However, this does not happen on the same day that container prices rise.

“Some companies are still depreciating because there is a market, competition, and it is not possible to do everything so easily, but at some point there will definitely be an increase in prices,” says the head of Caffeine.

Logistical problems will lead to a coffee deficit

According to the director of the food business of Pricer.lt, logistical problems in the world can cause a shortage of coffee and an even higher price increase in Lithuania, even with the fall of prices in Brazil.

According to ESM magazine, Brazil’s coffee exports fell 27% year-on-year in August due to higher demand for sea containers.

According to the Brazilian Association of Exporters, this year, due to delivery barriers, around 3.5 million shipments were not shipped on time. bags of coffee, causing the country’s coffee industry to suffer about $ 500 million. Loss of USD.

According to the association, between 40% and 50% of ports have been delayed in the last three months due to the deterioration of the situation. of all coffee shipments, compared to 10-20%. in the first months of the year.

Brazil accounts for almost 40 percent. world coffee trade. The delay is said to disrupt the operations of some of its largest clients in the United States and Europe.