Coffee has always been something special in Germany. This was clearly noticeable after the Second World War. At that time, two towns in the west of North Rhine-Westphalia came to the Netherlands for a few years as reparations. And because butter, cigarettes and coffee were available in the neighboring country, but almost not available in Germany for years to come, the residents of the two towns of Elten and Selfkant had hit the jackpot.
As the German economy recovered, visitors came to the border region again. Not because of the beautiful landscape, but because of the butter and coffee – a good business for the new Dutch. Selfkant also profited from smuggling. There, as in the border region with Belgium, smuggling was a major problem that the police and customs could not get under control. This only became a problem when the German economy recovered.
At the moment, the history of the coveted bean seems to be repeating itself, as the Germans’ favorite drink is becoming noticeably more expensive again. The global market and high energy costs are making the hot drink more expensive, according to German coffee market leader Tchibo. At the beginning of May, the Hamburg company announced that it would have to “adjust” its prices for roasted coffee: “Last year, many costs continued to rise, including for green coffee. In order to continue to offer our customers the quality they are used to, we now also have to act.”
The Evangelical Press Service is also monitoring the rising coffee prices and has asked Gepa, the largest European importer of fair trade food from the global south. The agency quoted commercial director Matthias Kroth: “We are currently in an economically challenging situation.”
Gepa complains about a decline in sales due to inflation-related reluctance on the part of customers. The high raw material prices for coffee and cocoa as well as the war in Ukraine had a negative impact. Andrea Fütterer, head of the policy and policy department at Gepa, is also concerned about high prices and fluctuations on the raw material markets. This is due to plant diseases promoted by monocultures as well as climate change, which brings with it drought or excessive rainfall.
On the other side of fair trade, among producers in the global south, coffee farmers are also suffering. Their lobby group Fairtrade International told DW that unfavorable weather conditions, especially in Southeast Asia and South America, are driving up prices. This is leading to fears of supply shortages. Fairtrade told us: “This is exacerbating the already delicate balance of supply and demand. Long periods of drought in Vietnam, the main producer of Robusta beans, have damaged the plants. Brazil, on the other hand, the main source of Arabica beans, is suffering from heavy rains that are affecting the harvest.” Fairtrade concludes: “The climatic uncertainties, the disruption of international trade routes and the speculative nature of many investment portfolios have created a perfect storm in the coffee market.”
Carsten Fritsch also notes that the armed conflicts that have flared up around the world are casting their shadow on the markets. The Commerzbank analyst is monitoring developments in the markets for “soft raw materials”, which include food. Speaking to DW, he refers to a study he prepared for Commerzbank Research: “In contrast to Robusta, Arabica is hardly affected by the hindrances during transport through the Red Sea, as the large Arabica producers do not need this route for transport. The situation is different with Robusta coffee, which is predominantly produced in Southeast Asia.”
But everything has two sides and so one producer can benefit from the difficulties of the other: “However, the significant price increase and the shortage of Robusta could increase the demand for Arabica.” The advantage is Brazil, where 80 percent of the world’s Robusta harvest comes from.
In addition, in the case of the world’s largest Arabica producer, the forecasts are good. “For the 2024/25 crop year,” says Fritsch, “there are signs of a higher coffee supply in Brazil. In its January forecast, the Brazilian forecasting authority expects an increase of 5.5 percent compared to the previous year to 58.1 million bags of 60 Kilograms of this amount will be 40.75 million bags for Arabica and 17.33 million bags for Robusta.”
However, the operator of a German coffee roasting company is dampening this cautious optimism. Steffen Schwarz expects further price increases. This is also due to problems in recruiting migrant workers on the plantations and the increasing coffee consumption in the growing countries themselves. Schwarz told the magazine Der Spiegel: “So we have lower yields, a shortage of workers and at the same time increasing demand.”
The increasing demand is not only due to the “coffee fad” in Europe and the USA, where coffee someliers celebrate the hottest baristas and more and more coffee drinkers consider themselves coffee connoisseurs. The increasing consumption in countries that have cultivated a tea culture for thousands of years is driving up prices. In South Korea and China, demand for the aromatic beans is increasing.
We have to get used to the high prices, says Steffen Schwarz. He thinks coffee should cost 25 to 30 euros per kilo. That, he told Spiegel, “I have to at least be willing to pay if I want good taste and ecological and social aspects are important to me.”
Author: Dirk Kaufmann
*The article “Coffee is becoming a luxury item again” is published by Deutsche Welle. Contact the person responsible here.