Coffee prices are currently at their highest level in 13 years
Her standing request for its abolition Excise Tax reinstates with its announcement the Hellenic Coffee Association. As he notes, “wheel brakes for the course of the sector coffee in Greece is the imposition of the Special Consumption Tax in 2017, which further burdens prices. The Hellenic Coffee Association considers, under the current circumstances, its abolition imperative, in order to limit as much as possible the impact of the increased costs and that the price paid by the consumer does not jump”.
According to the Hellenic Coffee Association, coffee prices are currently at a 13-year high of 287.50 cents on the dollar per pound for the arabica variety at the close of the New York Stock Exchange last Monday. Prices for the robusta variety are also at a 16-year high. These are conditions that dramatically affect costs for industrial and commercial companies active in the import, processing and distribution of coffee, which despite the intense competition that characterizes the sector, will have an impact on the Greek market as well.
According to the Hellenic Coffee Association, despite earlier market estimates of a de-escalation, there has finally been a further increase in prices over the past two weeks. The increased costs can no longer be absorbed by the businesses in the sector. Therefore, the only way to avoid significant increases in the consumer price, the need to abolish the Excise Tax on coffee becomes imperative.
Historically, the price of the Arabica coffee variety has reached the corresponding point twice more, while it is worth noting that the market has been faced with three consecutive years where there is a deficit balance of production and demand, with the decisive effect of the climate crisis in the largest coffee producing countries of the planet such as Brazil and Vietnam. Conditions such as frost and prolonged drought have a decisive effect on global production, reducing the amount produced and creating upward trends in prices. Unpredictable climate conditions seem to be set to become the new normal for coffee growing and the primary sector as a whole.
But the impact of the European EUDR road map is also important, causing further pressure on prices, given that in order for a company to import quantities of coffee, it will have to prove that the plantations from which the raw material comes have not contributed to deforestation by presenting the corresponding certificates, the issuance of which additionally incurs the cost of the raw material. Deforestation is defined as the conversion of forest to agricultural land, following natural disasters that have been caused.
