Global coffee bean prices are soaring due to abnormal weather conditions. Since humanity began trading coffee, record-high prices are being broken day after day. As concerns over supply disruptions grow, companies have announced plans to invest $10 million in response to climate change. However, it appears difficult to prevent an immediate increase in coffee prices.

On the 6th (local time), Arabica coffee futures traded at $4.0895 per pound during the session on the New York market, setting a new all-time high. On the previous day, Arabica coffee surged more than 4% and surpassed $4 for the first time since coffee trading began. However, according to a Nasdaq report, prices have soared for 12 consecutive trading days, breaking the record high in just one day.

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The price of Robusta beans, mainly used for instant or low-cost coffee, is also skyrocketing. On the same day, Robusta futures on the London exchange reached $5,684 per ton. After setting a record high of $5,644 on May 31, the price broke the record again within a week. During the session, it even reached $5,707. This marks an 82.2% increase from $3,096 a year ago, and a 176.6% rise compared to $2,040 two years ago.

The main reason for the rise in coffee prices is a supply shortage caused by abnormal weather. Brazil, which accounts for 60% of Arabica production, experienced its worst drought in 70 years last year. The key growing region of Cerrado Mineiro suffered from extreme heat exceeding 40 degrees Celsius, causing production to plummet by about 30%. Sudden frost in August of last year is also estimated to have reduced output by 10-20%.

Vietnam, a major exporter of Robusta beans, has also faced abnormal weather. From March to May last year, the Central Highlands, Vietnam's coffee-producing region, suffered its worst drought in a decade. After the drought ended, Typhoon Yagi, the strongest in the past 10 years, struck. Some areas experienced an abnormal downpour of 500mm in a single day. The Vietnam Commodity Exchange expects coffee production to fall by about 10-16% due to these abnormal weather events.

As coffee bean prices soar, domestic coffee prices are also rising. Paul Bassett raised the prices of major products by 200 to 400 won on the 23rd of last month. Starbucks Korea and Hollys also increased product prices by 200 to 300 won starting from the 24th. Low-cost coffee brands have also joined the price hike. Compose Coffee raised the price of iced Americano from 1,500 won by 300 won on the 3rd of this month. Private brand (PB) coffee products sold at convenience stores such as Emart24 and Seven Eleven have also slightly increased in price.

The international community has taken action to stabilize coffee prices. The non-profit agricultural research and development organization 'World Coffee Research (WCR)' announced at the end of last month that it would invest 10 million dollars in programs to strengthen coffee breeding and seeds. This means pouring funds donated by more than 190 member companies, including Starbucks, into the development of next-generation coffee varieties. The goal is to provide 100 varieties that can withstand various origins and extreme climates by 2030.

Nevertheless, the upward trend in coffee prices is expected to continue for the time being. The Brazilian Coffee Industry Association (ABIC) expects prices to continue rising until new beans are harvested around April to May this year. Coffee bean prices are usually reflected in coffee prices with a lag of 5 to 6 months. Since the current shortage of coffee bean supply is causing prices to skyrocket, this means coffee prices could increase further.

Fernanda Okada, who is in charge of coffee price analysis at Standard & Poor's (S&P), told the BBC in the UK, "Demand for coffee remains high, but the inventory of (coffee beans) held by producers is low," adding, "The upward trend in coffee prices is expected to continue for some time."