Coffeeflation (A steep rise in the price of an average cup of coffee) By (Zain.S.Pathan)

 Coffeeflation, what does this term even mean? I Know you guys are curious  about this term ,let your curiosity stick in till the end of this blog i am sure you will find this blog educational and maybe worrisome if you are a daily coffee consumer.

 

While consuming the coffee, have we ever imagined the ingredients that go into making that coffee beans through which our delicious coffee is made and served to us.

Those beans that go into the making of our coffee powder or our coffee beverage are the premium  Arabica beans that are majorly cultivated in Brazil ,India and Ethiopia. Those are one of the most premium coffee beans used in making coffee or coffee powder.

You guys while reading this blog  must be wondering that why am i bragging  what goes into the making of  a cup of  coffee and coffee powder  and why should we  be concerned about these Arabica beans , but guys  you will have to understand this because in the upcoming time the average  price of your morning  cup of coffee is gonna rise in an steep manner to what people are gonna wonder why is this happening. 

Let me first get this in a simple and a straight way in the past year it's been witnessed by the ICO i.e International Coffee Organisation that there has been a steep gap between production and consumption of Arabica coffee beans in those countries who produce that particular beans 

 Arabica beans were discovered  and are native to Ethiopia but with certain temperature conditions like rain and heat  can be grown in other countries. The temperature window between 18- 21 degrees Celsius is the perfect temperature for the Arabica beans to nurture , but it can handle a mean temperature up to 24 degrees Celsius. But in the Arabica coffee beans producing region like Brazil, central and South America , Africa and parts of Asia, there has been  temperature recorded at an Average of 30 degrees Celsius in these regions which are harming the Arabica beans.

Arabica beans account for 60 to 70 percent of global production in coffee , the decrease in the supply of Arabica coffee beans can affect the whole coffee   because of its market share occupancy in the Coffee market.

Premium coffee chains like Starbucks , Tim Horton , Costa Coffee and Molokai Coffee use Arabica beans for preparing coffee related beverages. Due to climate change the SEI analysis (Stockholm Environment Institute) has found  that the Arabica coffee beans production can decrease by 45.2% and also the production of Robusta beans can decrease by 23.5%.

These SEI Analysis figures can prove to be quite alarming situation for the coffee market as with the growing lack of supply in coffee beans there has been a steep rise in the consumption of coffee every year there is a rise in coffee consumption by 2.7 percent whereas the production shows the negative growth rate on charts 

The graph presented below was made by The Economist  with the data of ICO gives us a clear picture of the Consumption and production gap in the Arabica coffee beans.

(Credits: The Economist)

These SEI analysis ,the figures  and graphs presented  by the ICO  and The Economist leave us with an alarming message of rise in prices of coffee in a large margin due to consumption and production gap what we refer to as in economic terms as Demand and Supply gap which leads to a rising price of the commodity as coffee is an inelastic product i.e (it has become an necessity commodity) which is more threatening, In the beginning of this blog I quoted re a term ‘Coffeeflation’ I hope this term to you is pretty much clear.