Coffee Prices Rise to 13-Year High: Durian Fruit and Extreme Weather as Price Drivers

Coffee prices have reached their highest level in 13 years, attributed to the rising demand for the world-renowned durian fruit. Global coffee supplies have been severely affected by supply disruptions, extreme weather, and massive demand for the exotic durian fruit in China. Known for its pungent smell, often compared to raw sewage, durian is banned on public transportation in many Asian countries. At the same time, the fruit has attracted a growing fan base who refer to it as the "king of fruits" for its distinctive taste. Particularly in China, durian enjoys increasing popularity, prompting Vietnamese farmers to replace Robusta coffee plants with durian as they are more profitable. This has been exacerbated by drought, heat, and pests in Vietnam, hindering the growth of the country’s coffee plantations. Vietnam is the world’s largest supplier of Robusta coffee, used by many major brands. Concurrently, harsh weather and crop failures in Brazil, the largest global exporter of Arabica coffee, have also driven prices up. Although other regions have increased their exports, it has not been sufficient to alleviate the demand pressure. Both Arabica and Robusta beans have reached near-record highs. The sharp price increase raises the likelihood that British coffee drinkers will have to pay more at retail, despite a significant drop in overall inflation since 2022 and 2023. Rising coffee prices in recent years, combined with higher labor and energy costs, have already resulted in consumers paying higher retail prices. According to food industry experts Allegra Strategies, the average price for coffee at Pret a Manger, Caffè Nero, and Costa in London has risen by 20 to 40 pence since the beginning of the year. Pret has discontinued its popular subscription model and replaced it with a new offer providing drinks at half price for a reduced monthly fee of £10. While the average retail price for a latte ranges between £3.50 and £4, customers can easily pay £5 or more for their drinks if they add syrups or opt for iced or flavored coffees. Jeffrey Young, CEO of Allegra, warned that consumers might buy less coffee if prices continue to rise. He stated, "If a medium latte costs £4, I think we are exceeding the limit of what consumers can afford daily. This could be a tipping point where people start to seriously reconsider their daily coffee consumption. I think we are now at a point where the industry should take a pause and reflect.