From Drought to Demand: The Multi-Year Crisis Behind Surging Coffee Prices

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Coffee production has been severely impacted by climate-driven crises, including a 2021 Brazilian drought and frost, a Vietnamese typhoon, and ongoing Brazilian heatwaves/droughts through 2023. The crisis worsened in mid-2024 with Vietnam's worst drought in a decade and Brazil's continued dry spells and drought into December 2024, consistently threatening global supply.

Extreme weather impact on coffee price

Since March 2020, the coffee supply chain has faced ongoing crises, including pandemic stockpiling, major logistical shocks (Suez Canal blockade - March 2021, Colombian transport protests - June 2021, Vietnamese shipping backlogs - late 2021 leading to higher Robusta prices), proposed UK anti-deforestation rules (March 2024), and adverse weather (mid-2024).

Supplier problems impact on coffee price

Case Study: Coffee Price Volatility

Between 2021 and 2024, extreme weather and supply‐chain disruptions drove Arabica prices from under $1.00 to highs above $3.00 per pound. Key events included:

  • May 2021 – Severe drought in Brazil
  • July 2021 – Frost wipes out 20 percent of Brazil’s Arabica crop
  • September 2021 – Typhoon Noru hits Vietnam’s coffee belt
  • Mid-2024 – Vietnam’s worst drought in a decade
  • Ongoing dry spells in Brazil into December 2024

By layering these events against price data, Semantic Visions’ market intelligence dashboard flagged volatility triggers in real time. This insight helped commodity traders and risk officers adjust hedging strategies ahead of sudden price moves.

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