Coffee will become more expensive in 2016

ABN Amro‘s economic bureau has published another report on the coffee industry, claiming the price will once again increase in 2016. Prices dropped extensively in 2015, but lower productions and higher demand will turn that trend around.

Poor weather conditions

ABN Amro expects coffee demand will grow 2.4 % in 2016, particularly in emerging countries where demand should rise 5.4 %. On the other hand, coffee production will be lower than before in 2016, particularly because of a major drought in several countries. That combination will result in higher coffee prices in 2016.

Cacao beans will become slightly cheaper, after they had become 10 % more expensive in 2015. A large part of that price increase has already dissipated in 2016 and ABN Amro expects it will drop more than 10 % compared to 2015.

The sugar market will face a manufacturing shortage for the first time ever, which means its price – continuously falling since 2010, will no longer drop. The demand is still increasing, while the production faces lousy weather conditions, which is why ABN Amro forecasts a 15 % price increase compared to a year ago.