In the wave of inflation, food and beverages are the most expensive products, and coffee is no exception.
Between June 2019 and the same month of 2022, coffee prices in Mexico increased 23%. In the last year it has had an average increase of 12%, which exceeds the current inflation of 8%, according to figures from the National Institute of Statistics and Geography (Inegi).
Among the reasons that have influenced the rise of this essential product for Mexican breakfast are natural phenomena due to climate change; the recovery in demand and increased consumption after the waves of covid-19, and the conflict in Ukraine.
Why did the price of coffee go up?
“Coffee is listed on the New York Stock Exchange and Brazil is the world’s leading coffee producer. This year, the Brazilian harvest was practically lost due to frost, there is no coffee in the world and that makes the price rise quite a bit. It is triple what it was before and since the demand is high and the coffee is little, it becomes more expensive,” explained Daniela, who along with her husband runs the Tierra Sagrada Coffee Producers cafeteria in Tapachula, Chiapas.
This situation has represented a benefit for the producers, who, according to Daniela, have received fairer prices for the harvest and sale of the grain: “Here in Tapachula there are several transnationals that buy coffee from producers, and now that the price has risen, they must offer competitive prices, that helps, for the first time in many years coffee was paid at a fair price”.
The border city and coffee producer reported an inflation rate, higher than the national average, with 10%. The increases in food and beverages, clothing, footwear and accessories, in addition to housing are the highest. Ironically, coffee is one of the products that rises the most in price in this city, with an increase of 17.3%, above increases in products such as milk, fruits and vegetables, details information from Inegi.
“At the national level, we are coffee producers, but not in the quantities produced by Brazil, Colombia or Indonesia, where the magnitude of production matters. Tapachula has coffee production, it may be that it first rises in the places where it is produced and where it is distributed, like when producer prices rise,” explained Gabriel Casillas, chief economist for Latin America at Barclays.
Globally, the prices of grains and food have risen after the demand for goods intensified after the advance of vaccination against covid and consumption was reactivated. The war in Ukraine has also influenced the rise in fuel and fertilizers, factors that affect the final price of coffee.
“Everything went up, gas, La Luz, supplies, bags, milk, transportation, for many years we maintained prices, but now we can’t, in December we raised prices. The clients resent it, because everything increases, but the salary does not, it is a situation that we cannot control”, commented Daniela.
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