Due to supply disruptions, coffee futures prices continue to cause concern in the market. Arabica coffee futures have risen more than 50 percent since the start of the year, and arabica coffee prices surged to a 10-year high this week, according to data from the Intercontinental Exchange.
Concerned about growing Coffee shortages and the impact of supply shortages, Caribou Coffee Co., the nation’s second-largest Coffee chain, says it is stocking up on Coffee beans, According to A Report by Finance Union.
John Butcher, CHIEF executive of Caribou, points out that the company will continue to increase its safety inventory in key categories, and that in addition to coffee beans, it is also stocking up on cups, LIDS, packaging, chocolate and just about anything else imaginable.
Public information shows that Caribou coffee was established in Atlanta, The United States in 1992, is a famous coffee chain brand in the United States, known as the second largest coffee chain. Reindeer coffee, which has about 450 stores in the United States, said it expects to expand its franchise program in 2022.
Starbucks, the world’s largest coffee chain, has also responded to rising coffee prices. Kevin Johnson, President and CHIEF executive of Starbucks, said earlier that the company had responded to the rising cost of coffee beans by purchasing ahead of time and locking in prices to buy beans at attractive cost prices rather than raising prices.
A global shortage of Arabica beans and disruption to global logistics networks due to container shortages and port congestion will continue to push coffee prices higher for longer, industry players said.
Some of the supply shortages are also due to weather.
The world’s largest coffee producer and exporter, Brazil for a nearly a century since the worst drought and suffered two frost extreme weather, a lot of coffee production, coffee with to high transportation cost and shortage of container, the global price of coffee beans from 104 cents a pound last year rose to 152 cents a pound in July this year.
A recent report by Marex Spectron, an international investment bank, predicted a shortfall of 10.7 million bags of coffee in 2021-22 due to a sharp decline in Coffee production in Brazil.
Vietnam, the world’s second largest coffee exporter, has also added to the global coffee supply due to COVID-19 restrictions. Under the pressure of transportation, traders have difficulty in transporting coffee beans to ports and exporting overseas. As a result, the price of all coffee exported from Vietnam has risen, and several multinational companies have pointed out that they are facing supply difficulties.
The global supply shortage has pushed up price costs, which have also put retailers under pressure after German coffee retailer Tchibo and Japan’s UCC announced price increases in response.
On top of that, rising coffee prices have led to Colombian coffee not being delivered and farmers reneging on previous delivery contracts.
Coffee prices may rise further due to a shortage of coffee beans, container shortages and port congestion, industry insiders said.