Heat wave, Red Sea crisis send global tea prices up

•  Global tea and coffee prices rise by up to 50% with extreme weather affecting crops and the Red Sea crisis hindering container ships

The cost of a cuppa is set to surge, with coffee and tea prices spiralling on global markets.

Wholesale coffee prices are up by more than 20% since January after crops were hit by extreme weather in key producing countries, including Vietnam and Brazil.

Tea costs have jumped by 34% in the past month alone due to rising industry costs and the Red Sea crisis affecting container ship movements.

UK coffee shops rely on robusta and arabica beans for the millions of Americanos, lattes and cappuccinos they make.

The price of robusta bean futures hit £ 3,211 per ton on the London markets this week, up 20% on January’s £ 2,674. And in New York, the price of arabica beans hit $ 5,105 (£ 4,125) per ton, a rise of 23% on $ 4,151 (£ 3,354) over the same timeframe.

A prolonged heatwave in Vietnam, one of the world’s largest producers of robusta beans, has damaged crops. Andrew Moriarty of analysts Mintec, said: “Robusta prices have been increasing for some time on two successive lower harvests in Vietnam.”

“Over the last few weeks, production estimates for the previous 23/24 crop have dropped, and now many market participants expect the last harvest was down by around 20% year on year.”

Research by The Grocer magazine found prices of Nescafé Gold Blend Instant Coffee are up by an average of 5.5% since last week. 

A spokesman for the brand’s owner Nestlé said the company has seen “significant increases in the cost of coffee, making it much more expensive to manufacture our products.”

Gareth Redmond-King at the Energy and Climate Intelligence Unit said: “The cost of our morning coffee is soaring as climate change hits crops in Brazil and Vietnam. Worsening climate extremes are threatening food crops in the UK and overseas.”

“We import half the food we consume – damaged crops limit supplies and raise prices in our shops.”

Latest data shows a 34.52% increase in tea prices over the past month – making them 50% higher than a year ago. 

The main factor is said to be disruption to shipping from the world’s biggest producers and exporters – China, India, Kenya and Sri Lanka – resulting from attacks on vessels in the Red Sea.

With shortages looming, Marco Forgione, of the Institute of Export and International Trade, said: “The tranquillity of our tea supply and demand has been disrupted by recent upheavals, which has resulted in a surge in prices.”

“These disruptions have rippled throughout the global supply chain, adding to price pressures, shrinkflation and availability issues, all of which put further pressure on consumers’ already stretched purses and complicating businesses’ supply chains.” (Source: https://www-dailymail-co-uk.cdn.ampproject.org/c/s/www.dailymail.co.uk/news/article-13329529/amp/Soaring-cost-cuppa-revealed-Global-tea-coffee-prices-rise-50-cent.html)