The Strategist

Reuters: World coffee prices could rise due to Colombian suppliers

10/12/2021 - 08:11

World coffee prices have already risen 55% this year due to a poor harvest in Brazil. They are expected to be even higher because Colombian farmers have decided to hold back supplies in order to sell their products at a higher price, Reuters reports.

Colombia is the world's second-largest supplier of arabica. According to the agency, producers in that country have not delivered up to 1 million bags of coffee beans this year, accounting for nearly 10% of the crop. As a result, coffee exporters, traders and roasters faced serious losses.

Also, some Colombian producers cancelled contracts already signed to resell coffee at higher prices. The average loss of large buyers of coffee could be around $8-10 million.

"Supply disruptions from a major producer like Colombia could exacerbate price spikes on world markets, although they would be temporary," one of the interlocutors told Reuters.

Earlier it was reported that the abnormal drop in temperature after almost a year of drought in Brazil could reduce the coffee bean crop by 30% year-on-year.