In today’s Finshots, we tell you why coffee production is in trouble, why your cup of joe is getting pricier and whether we’re really running out of coffee.

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The Story

Coffee isn’t having the best of times these days. The world consumes around 2 billion cups of it every day, but the production is only dropping. And if the demand for coffee keeps rising as it has over the past three decades, consumption could double by 2050, while half of the land ideal for growing it may no longer be suitable. Naturally, you can see why prices are shooting up.

And if you think that this doesn’t matter to you because India loves chai (tea), think again! Sure, we may drink 30 cups of tea for every cup of coffee, but India still gulps down 11 million cups of coffee every day. That’s no small feat, especially when less than a third of the population are coffee drinkers. And let’s not forget that India is the eighth-largest coffee producer in the world. So we are going to feel the pinch too.

But why are coffee prices rising in the first place?

Well, as you’ve probably guessed already, the real culprit behind it all is climate change. And it’s hitting all the major coffee-producing nations hard.

Take Brazil, for instance — the world’s coffee giant, responsible for 40% of the global supply. In 2021, a frost wiped out coffee plantations the size of Mauritius. And now, erratic weather, including droughts, insufficient rain and extreme heat, continues to wreak havoc. Coffee farmers are left with smaller-than-usual beans. And the arabica variety of coffee has been hit really bad. This is the stuff that most people sip at cafés. Brazil produces it in abundance, but these climate swings are shrinking its output.

So, naturally, we look to Vietnam, the second-largest coffee producer, which specialises in robusta coffee beans. It’s the variety used in instant coffee, and thankfully, it’s more resilient to heat and pests. Plus, it’s cheap and mass-produced, making it the go-to for multinational companies that use coffee beans for instant coffee, soft drinks and even pharmaceuticals. So, while it may not be as fancy as arabica, robusta is kind of the world’s backup plan right now.

But here’s the thing. Vietnam isn’t immune to climate troubles either. The country’s been dealing with prolonged dry spells, and a recent typhoon has raised fears that coffee production will take a hit. And even though Vietnam’s robusta coffee is more weather-resistant, the country isn’t willing to gamble with unpredictable climate shifts. So, it’s making a move that’s crushing the coffee industry’s last hope. It’s shifting away from coffee production and turning to a rather unusual alternative ― a pungent fruit called durian.

The logic is simple. Global demand for this garbage-smelling, yet oddly tasty fruit has skyrocketed — up 400% year on year. All thanks to a craze fuelled by China.

You see, China’s middle class is growing, and more people can now afford durians, which are far from cheap. For context, a durian from Thailand, China’s main supplier, sells for about $20. And another prized variety from Malaysia can fetch up to three times that price! Not only that. Durians have also become a popular gift among friends and family in China.

So, Vietnamese farmers are ditching coffee and jumping on the durian bandwagon to cash in on this booming market.

And you can’t blame them either. Growing and selling durians can be five times more profitable than coffee. So, coffee’s last hope isn’t really much of a hope anymore.

The end result is that this reduced coffee output from two of the biggest coffee suppliers is translating into rising prices. In fact, just a few months ago, coffee prices on the commodity exchange shot up, especially for the robusta variety, which saw its biggest spike since 2010.

So, what’s the solution, you ask?

Well, one option gaining traction is synthetic or no-bean coffee alternatives. Companies are turning to biotechnology and food science to brew up coffee replacements that don’t come with all the climate baggage.

These alternatives are made from things like chickpeas or “upcycled” agricultural waste, such as date seeds. Some even use lab-grown cells from real coffee plants to mimic the taste and feel of your regular cup of joe.

And since these substitutes are sustainable and don’t rely on deforestation to plant more coffee trees, they might just be the future of your morning brew. Just a heads up though. Your coffee could start tasting a little different.

But that’s more of a workaround than a solution, no?

That’s exactly why some countries, like the US, Argentina, Uruguay and China, are thinking ahead by taking advantage of warmer temperatures to start growing coffee in new regions. While that’s promising, it likely won’t be enough to replace the output of the world’s top coffee producers.

So the real solution may actually be tackling climate change head-on. By keeping temperatures in check, we can protect wild coffee species that could help revive production. You see, there are over 120 varieties of coffee in the world, but we mostly drink just two — arabica and robusta. But these other wild varieties hold potential for crossbreeding to create more resilient strains that can withstand pests, diseases and changing climates.

But there’s still a catch. Climate change is threatening those wild coffee varieties too.

And even if we develop new varieties, there’s still a long road ahead for coffee farmers. Coffee bushes take three to four years to bear fruit, and new crops require more labour and support.

So, while backup solutions like no-bean coffee and new coffee-growing regions may hold us over for now, the real key to safeguarding coffee’s future is addressing climate change.

And let’s hope we do. Because the last thing we need is a world without coffee.

Until then...

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