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Why is coffee from Brazil no longer cheap?

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As you will have noticed, the prices of many commodities and inputs to production have skyrocketed in recent months, and although we are reluctant, we are forced to reflect and adapt to this situation.

So let’s take a look at what is happening in the economy and how it affects us.

Energy prices

Paradoxically, the shift to green energy, combined with its unstable supply or unresolved storage, has contributed to a large return to coal or gas-fired generation. This gas is then not available for companies to produce or for households to heat their homes, and all this is pushing gas and electricity prices through the roof.

Viac na: https://www.ft.com/content/f37d2a36-4609-4b3e-9795-064b6d459676

Problems with logistics

Everything is delayed, there is nothing in the warehouses, nobody knows when things will be restocked or when these problems will be solved. From chips to paper filters to coffee filters, this situation affects the entire supply chain. And the problem is not only in production, but also in the transport capacity itself, which has shrunk during the pandemic and is currently unable to operate with sufficient flexibility and efficiency.

Read more: https://www.gbreports.com/article/logistics-challenges-in-2021

People’s willingness to work has fallen

Where have the people gone? Is probably the most common question of every HR manager nowadays. The pandemic seems to have changed people’s preferences and they are increasingly staying voluntarily unemployed. This is obviously a structural change that will not just change, at the same time the shortage of people is pushing salaries up significantly.

Read more: https://www.nytimes.com/2021/09/04/opinion/labor-shortage-biden-covid.html

Freezing temperatures in Brazil and climate change

Climate change is here. Not in 5 or 10 years’ time, but right now, we are in the middle of a crisis and we have seen it in full effect in Brazil, where it has been freezing as this year’s crops have ripened. In a country that is the largest coffee producer in the world, the harvest will be at least 30% lower. Since then, coffee prices have rocketed, and with similar problems in other countries, we can only imagine where they will stop.

Read more: https://dailycoffeenews.com/2021/07/12/frost-hits-brazilian-coffee-lands-extent-of-damage-not-yet-known/

Inflation

Not only the above factors, but also many others have shot the inflation curve upwards, to the highest numbers in 13 years. This means that we can buy fewer goods and services for the same amount of money.

Read more: https://www.reuters.com/world/europe/euro-zone-inflation-jumps-13-year-high-worsening-ecb-headache-2021-10-01/

Unfortunately, all of the problems outlined above, which have increased our production costs and the purchase prices of virtually everything, have forced us to react.

That’s why, albeit reluctantly, we’re raising the price of our coffees from November 2021. This will apply in particular to Brazil Caramelo and Highlander espresso blends.

We hope you understand our situation and thank you for remaining loyal to us,

Team Goriffee.

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