The reason lies in the crop failure in Vietnam and the drought in Brazil
Morning coffee in bed will become inaccessible for many Russians. It's nothing you can do. Coffee does not grow in Russia and comes to us through imports, which depend on many factors. It so happened that all the factors came together not in our favor. This time, unpleasant circumstances have affected the cheap and widespread Robusta coffee, which is usually used as instant coffee. According to market participants of the “energy drink”, prices have already faltered and crept up.
A whole chain of matches. The world's largest producer of this coffee — Vietnam — has collected the smallest crop in recent years. Because of this, Robusta prices will now creep up. According to analysts — to a historical maximum over the past 12 years. And the small harvest was due to the fact that prices for fertilizers increased for Vietnamese farmers last season.
It should be noted here that if Russia were allowed to export its mineral fertilizers, then, perhaps, there would be no crop failure in Vietnam and prices for instant Robusta coffee would not rise. However, due to the imposed sanctions, Russian fertilizers cannot reach buyers, including Vietnamese ones.
And it turns out that coffee lovers around the world are suffering. Due to the deteriorating economic situation in the world, Europeans, in order to save money, began to abandon expensive Arabica and switch to cheaper Robusta. But it turns out that she does not give any guarantees. A sharp increase in demand led to a shortage of beans on the market.
In Vietnam, of course, the light did not converge like a wedge. The second largest producer of this raw material is Brazil, and the third is Indonesia. But in Brazil last season there was a severe drought, and in Indonesia, on the contrary, it rained. Therefore, the rise in price is inevitable. However, it will hit not only Russia. In Germany, instant coffee of this brand has risen in price by 20%.
Some experts argue that nothing critical will happen on the Russian coffee market from the rise in prices for robusta. You just need to redistribute. If you, for example, drank 5 cups of coffee a day, then you can drink three and two cups of tea. Allegedly, health will only become stronger.
Until recently, approximately the same amount of both was consumed in our country — 160 thousand tons per year. In 2019, the sympathies of Russians leaned in favor of coffee. But it's probably not too late for us to return to our «roots». Which are slightly cheaper than coffee, but also expensive.
As you know, simultaneously and exclusively all sorts of coffee (both Arabica and Robusta) went up in price about two years ago. And not purely symbolically, by the usual 5-10%, but immediately by 2.5 times.
However, now Arabica is not at risk — there is nowhere else to raise prices for it. Cheap varieties of instant coffee will jump up, to which many of us have already become accustomed. Some jokers, as a substitute, suggest switching to vodka — it is cheaper anyway.
According to Ramaz Chanturia, Director General of the Roschaikofe Association, the emphasis in the world balance of demand for coffee has shifted in favor of Robusta, which is why its exchange price has risen slightly.
— This is a technical moment, he believes. — If earlier Arabica was about 20% more expensive than Robusta, now it will be 10% more expensive. This is the market reaction to the fact that the demand for cheaper varieties of coffee has become higher. All over the world, not only in Russia.
— This is a market story. It must be said that there are a huge number of stages between raw material prices on the exchange and finished products in the store. And the green grains themselves do not play a decisive role. In the cost of finished products, they occupy 20-25%. You need to look not at their stock quotes, but at other expenses.
Today, in Russian stores, a more significant price factor is the change in the dollar exchange rate. Coffee is 100% imported. Until recently, we bought it in the price range of 60-65 rubles for the «green», and now the «American» costs at least 75-80 rubles. Such a change in the exchange rate cannot but affect the selling price. Trade is now recalculating prices. Peak values for Robusta coffee can affect prices in trade in 4-5 months.
— Our tea is also almost 100% imported, and of course, its price in strong dependence on the exchange rate of the national currency. So, for now, it will still be possible to save money on tea in the morning, but soon such a pleasure will be a serious blow to your pocket.