Climate Crisis Destabilizing Coffee Industry – CoffeeTalk

Climate chaos has led to a surge in the price of quality arabica beans, which has reached its highest level in almost 50 years. This comes amid fears of a poor harvest in Brazil and the devastating floods in Valencia, Spain, and the soaring cost of olive oil in recent years. The cost of the beans accounts for only about 5% of the price of a fancy latte, so the impact on coffee drinkers is likely to be minimal. However, almost every week seems to bring fresh news of climate-induced price increases.

In the rich world, these price jumps cause inconvenience and make the lives of low-income households harder. In developing countries, they can mean outright hunger. Sometimes these price jumps follow extreme weather events, such as the Spanish floods, which have already become more common as a result of the climate crisis and will continue to multiply. Or the jumps may result from higher temperatures that have become a new and alarming normal, forcing farmers to rethink longstanding cultivation patterns.

A paper for the UN’s Department for Economic and Social Affairs recently said that staple crops like corn, soya beans, wheat, rice, cotton, and oats exhibit suboptimal growth when exposed to excessive heat. The diminishing availability of water was another damaging factor as climate patterns changed. If a single foodstuff is affected, the impact in shoppers’ baskets in the developed world at least may be minimal, as retailers can source alternative producers and shoppers can substitute other products. But economists are increasingly starting to assemble evidence that global heating is putting systemic upward pressure on food inflation and injecting volatility into the food production system worldwide.

Climate-related transport bottlenecks can compound the challenges, as seen when the number of ships that could transit the Panama Canal each day had to be cut because of low water levels. Research published earlier this year in the journal Communications Earth & Environment found that climate pressures could add on average anything from 0.9 to 3.2 percentage points to global food price inflation over the next decade, depending on how much hotter we allow the planet to get. In hard-hit regions, the impact can be much worse.

This raises the question of whether policymakers have the tools to cope with this new era of uncertainty. Whacking up interest rates is not meant to be the right response to supply shocks anyway, but it seems particularly ill-suited to dealing with climate-induced shortages. Economist Isabella Weber has shown that corporations have extraordinary pricing power in the grip of shocks such as this, which they use to build profit margins at the expense of consumers. Governments may have to use unconventional approaches to managing the resulting inflation, including price caps and potentially even building up buffer stocks of staple foods for emergencies.

Read More @ The Guardian