From NOT A LOT OF PEOPLE KNOW THAT
By Paul Homewood
h/t Ian Magness
More piss poor reporting from the increasingly unreliable Daily Telegraph.
A new article headlined “Costa warns over rising coffee prices”, claims that Costa has “warned of rising coffee prices as climate change threatens to drive up costs”.
Apparently, markets have been thrown into turmoil by El Nino and other extreme weather events, particularly in Brazil, the world’s leading coffee producer.
The tosh has evidently been fed to them by Philippe Schaillee, Costa’s chief executive, no doubt keen to evade the blame for falling profits.
Instead of challenging him about his feeble excuses, the naive journalist, Tom Haynes, Senior Business Reporter, accepts them hook, line and sinker. Copy & Pasting at its best!
Coffee production in Brazil has been on a steadily upward trajectory for decades, despite regular bad harvests. This is true for total output and Arabica itself:
https://www.indexmundi.com/agriculture/?country=br&commodity=green-coffee&graph=arabica-production
As production has increased, so has consumption. Just since 2021/22, world consumption has risen by 7%, thus maintaining an upward pressure on prices.
Ironically the worst harvest in recent years in 2021 was due to unusually severe frosts.
While drought affected Brazilian crops last year, this year is expected to be a record one.
https://www.fas.usda.gov/data/coffee-world-markets-and-trade-07222026
It is the same with global output.
What the Telegraph has failed to tell its readers is that Brazilian coffee production always features big swings from year to year. According to the USDA:
Brazil accounts for nearly 40 percent of world production and exerts significant influence on global supplies and prices. Brazil’s role in Arabica markets is even more pronounced, typically supplying between 40 and 50 percent depending on the biennial crop production cycle. Arabica trees naturally alternate between high-yielding on-years and lower-yielding off-years as energy shifts between fruit and vegetative growth.
This biennial pattern is especially evident in Brazil due to several unique growing conditions. Arabica trees are cultivated on elevated plateaus and rolling hills with relatively uniform weather patterns, rather than mountainous microclimates that are typical of other producing countries. Extreme weather events such as frost, heat, or drought tend to synchronize yields across large areas by forcing trees into an off-year.
Costa charges about £5 a cup for its coffee, but how much of this is accounted for by the coffee itself?
A 200g bag of Costa coffee beans costs £4 at Amazon. My good Mrs tells me you would get 13 cups out of this, equating to 30p each. That’s retail, so Costa probably pay no more than 10p a cup. Much of that includes the cost of shipping, distribution and processing, not the cost of the green beans.
The other £4.90 per cup covers all other costs, most of which, I suspect, are staff costs.
If Costa’s costs are going through the roof, it will be because of Rachel Reeves’ tax and minimum wage hikes, not global warming!
