The United States is importing coffee, and lots of it, at the highest prices in a decade.
In 2021, customs value – the price paid for goods when sold for export to the United States, excluding items such as import duties, freight and insurance – for coffee imports into the United States reached $6.8 billion, up from $5.6 billion the previous year, according to new data from the US Census Bureau.
Rising prices haven’t stopped the United States, which is the world’s largest coffee importer, from buying more beans. In 2021, the average price per kg reached $4.27, the highest since 2012. Twenty years ago, a kilo of coffee cost $1.26. In 2021, coffee imports reached 1.58 billion kg (3.48 billion pounds), up 3% from 2020, a figure that includes green, roasted, caffeinated and decaffeinated beans.
The increase in imports at higher prices suggests that bulk coffee buyers in the United States are concerned about future coffee prices, says Federico Ceballos-Sierra, a coffee producer and consultant in Colombia. “You wouldn’t buy at that higher price if you expected prices to go down,” he says. “Roasters are just trying to ensure they will be supplied throughout the year.”
After receiving coffee prices on a regional call, he and his father sit down each day to discuss when to sell, he says. They look at the futures markets and what the countries that are big importers are doing. For now, they will hold onto their coffee, he says, as the data suggests coffee prices will continue to rise.
The weather is partly to blame
The choice of artisan coffee shops and Starbucks, Arabica coffee plants are particularly sensitive to climate. (Robusto is the other main coffee variety grown and brewed in the world.) Drought, followed by severe frosts, reduced production in Brazil, which accounts for 30% of US coffee imports, the largest share. La Niña has brought heavy rains to Colombia, which sends 21% of its beans to the United States, since last year, Ceballos-Sierra says. In Colombia, coffee production fell by 11% from February 2021 to January 2022, says Ceballos-Sierra. At the same time, supply chain challenges, from port congestion to lack of workers, have sent transportation costs skyrocketing.
As a result, Arabica coffee reserves certified by the US Intercontinental Exchange Futures (ICE) exchange fell to the lowest stock level since February 2000, according to data released by the US exchange ICE Futures on February 7. The reduction in reserves is worrying. because countries source when they cannot get enough overseas.
Are high coffee prices here to stay?
Higher prices have already surfaced on the menus of coffee chains. Starbucks said it plans to raise menu prices again in 2022, following increases in January this year and October 2021. For now, Starbucks has an ample supply of coffee, said Meg Lagesse, company spokesperson. Starbucks buys coffee 12 to 18 months before delivery. When it comes to pricing decisions, the company says it considers not only the cost of coffee, but also labor and distribution costs.
Home caffeination will not necessarily protect coffee drinkers from rising prices. Coffee, meaning the beans and instant coffee available to consumers rather than the coffee market, is one of many products becoming more expensive in the United States, with prices reaching 8.6 % year-over-year increase in January, according to US. Bureau of Labor Statistics. Overall consumer prices in the United States rose 7.5%.