First chocolate, now coffee — the supply of modern life’s necessities is being squeezed by a changing climate. Extreme temperatures and droughts in south-east Asia, home to the world’s second- and third-largest producers of coffee beans, have led to lower harvests. Falling bean supply has implications not just for our daily lives but also for company earnings.
A heatwave in Vietnam, the world’s second-largest bean producer, could reduce output by as much as a fifth in the year to September compared with a forecast from the US Department of Agriculture. Exports from Indonesia, the third-largest producer, are also expected to drop for similar reasons, which would mark a second consecutive year of decline.
As a results, global coffee bean futures are near record highs. Prices of London robusta coffee futures, the global benchmark, are up by more than 50 per cent in the past year to about $3,500 a tonne.