May 21, 2024

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Have €3 handy for the coffee you take with you to work

Have €3 handy for the coffee you take with you to work

I remember the times I used to pay 3 euros coffee That I was drinking in the Leventoman café (anyway, but also at the level of the café tables in the central square) in Nea Smyrni. It hasn’t been a decade since I gave a 3.40.

These are the times, aren’t they? The financial crisis was beginning to change our lives, yet the amount I was paying for one of the few things I had enjoyed consistently for years was so large that I was willing to pay it, knowing what it would cost the shop owners (the cost of the entrepreneur’s frino cappuccino was 70 cents).

Some successive problems later the owner pays €1.20 for what he now sells for – at best – close to five euros?

And with the new increases, prepare to pay close to €3 for a coffee you take in your hand, before going to work – or while you are there.

The price of this locally used product has increased by 50% since last November. Then the Houthis began their attacks on the largest sea shipping route in the world. What do they want from our lives?

We will explain next. What’s for sure is what they do in it Suez Canal It will soon (in June) lead to higher prices for a range of products, from electrical goods and clothing to bread.

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What is the new increase due to?

In 2022 when we saw the price of our honest coffee go up by at least 30 to 40 cents (a cup), that was why Brazil Who had the problem. The world’s largest coffee producer has seen its crops destroyed by the climate crisis.

Incidentally, one of the busiest sea routes in the world was also closed: the Suez Canal.

The reason was a giant container ship that was swept away by a gust of wind and remained stuck in place, disrupting the global supply chain.

Now in new increases, in the forefront remains Suez Canal While this variety is the second largest producer of the species beloved worldwide and the first in the Robusta group: Vietnam.

In Greece we hear that due to the heat and lack of water, the Robusta crop was lower in Vietnam. but Puppy intelligence (A global group of experts in agriculture, climate science and information) shows that coffee producing areas in Vietnam have been spared the negative effects of the Corona virus. In the child In 2023.

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However, in general Southeast Asia Where the variety is produced, there is an issue regarding the effects of El Niño on robusta production, with stocks reaching their second lowest level in eight years.

This shortage is what raises the price, as the product is no longer enough for everyone.

At the same time, the increase in the price of Robusta led to a decrease in the price of Arabica. Why; Because they can! But soon there will be competition from Yemen High quality coffee is now being produced.

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Do you know who is from Yemen? Those responsible for increasing all products will be seen soon.

the Houthi.

Since last November, when the price of coffee began its upward trend until January 2024, there have been 25 attacks launched by the Houthi movement on commercial ships crossing the Red Sea and the Suez Canal heading to Europe.

What do they want from our lives?

First, I will tell you what passes through Suez under normal circumstances.

What passes through Suez?

It passes almost through the Red Sea 15% of global maritime trade.

On the list is 8% of global trade Of grains12% of maritime trade oil And 8% of global trade of liquefied natural gas Gas.

The route through the Suez Canal is mainly used to connect Asia with parts of Africa and Europe, and also to deliver oil to North America.

In his statements in time s Hong Tran (See Senior Fellow at Center for Economic Geography of the Atlantic Center) explained that “It is the shortest, cheapest and most efficient way to connect Asia and Africa to Europe via the Mediterranean».

30% of the world’s traffic passes through Suez consumer goods Container transportation passes through the Suez Canal (in 2021 there were more than 20 thousand ships).

The menu includes everything you can imagine. from A piece of clothing, electricity And electronics Items are even oil, wheat, corn, natural Gas And of course coffee.

Many companies have already reported that there may be a shortage of products very soon. Among them is the largest series of furniture that we manufacture ourselves.

Commercial ships are now circling South Africa and heading to Europe and the East Coast of the United States via Southeast Asia to avoid the Houthis. Which increases the time (by two weeks) and transportation cost (+175 to 250%).

What is certain, then, is that “there is no company using the Suez Canal that has not been affected, whether by delays or by increased costs,” Tran said. We will soon experience the practical part of this development, as Cocoa will guide us on the right path

At the end of April, the price of a ton exceeded 9,316 euros ($10,000). This is four times what it was a year ago.

Who are the Houthis and what do they want?

The Houthis are a large tribe that has developed into an armed political and religious group. He comes from Saada Governorate in northwestern Yemen and defends the Zaidis, the Shiite Muslim minority in the country.

-Funded by the US Congress- Wilson Center It is noteworthy that the Zaidis ruled Yemen for 1000 years. The power was overthrown in 1962. Since then they have been trying to regain their influence in the country.

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In the 1990s, the Houthi tribe began a movement to revive Zaidi traditions, feeling that state-sponsored Salafist preachers posed a threat.

Movement (a Ansar Allah Ansar Allah has been fighting the Yemeni government since 2004. Since 2011 it has expanded beyond its Zaidi roots to become a broader movement opposed to the central government. Since then, the rebels have called themselves Ansar Allah (“Hezbollah”).

Since 2014, they have occupied the country’s capital, while also controlling northwest Yemen, including the Red Sea coast. Most of the country’s population lives there, where the Houthis collect taxes and print money.

Iranian officials I supported The Houthis and were compared to Hizb allahWith information that the latter wants to provide the former with weapons (even ballistic missiles), training and financial support.

The Houthis, in turn, said they were part of the Iranian axis of resistance against Israel, the United States, and the West more broadly.

They began attacking commercial ships passing through the southern Red Sea and the Gulf of Aden in mid-November last year. It was said to be a response to the Israeli attacks on Gaza.

In the period from 11/18/2023 to 4/1/2024, they carried out 25 attacks by all possible means (from missiles to drones) that were internationally condemned. Shipping companies have begun to make longer – and therefore more expensive – journeys around southern Africa.

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The Houthis recently They announced That they would attack any ship heading towards Israel from the Mediterranean Sea within their range.

What does all this mean for your pocket?

Greece ranks first in Europe in terms of coffee consumption. A third of the world market is used on our continent, and we Greeks drink 3 kilos per capita. We are in fifth place on the list led by its compatriots luxembourg, With approximately 10 kg per person per year. the Italians Famous for this type, it ranks 21st in the classification (at 2.5 kg per capita).

As he says in News 24/7 the Tasos Yacogluits president Greek Coffee Federation Estimates are inevitable given the way the coffee market is moving.

Yes, there is such an exchange.

The main problem with increases is their effects Climate change. There has been a water shortage in Vietnam, so we have limited quantities of the Robusta variety – it is traded on the London Stock Exchange. This is a fact that led to the rise in prices and dragged the prices of Arabica (traded on the New York Stock Exchange) with it.

The reality of terrorist acts in the Suez Canal also weighs heavily on reality, causing commercial ships to circle around Africa, instead of transiting Suez. The result is increased freight rates (the freight market is also traded on an exchange) and increased insurance premiums, as well as long delays.

There is always a relative amount of speculation in commodity trading, and prices have been rising since last November.

“The increase in the Robusta variety in the last six months is 50 to 55% and Arabica is about 35%. Retail prices are expected to rise by 10 to 20%.”

So far, companies have absorbed a large portion. But here, where we are, there is no longer any price retention. It is inevitable that we will see changes in price lists if the same phenomena continue.”

As a result of what I read and the problems that arose, a ton of robusta reached a price of 4,190 euros in March, compared to 2,505 last January. Now, as they write Financial Times At a price of 3678 euros.

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The price of 450 grams of Arabica (one pound) rose in the same period from 150 euro cents to 205 cents. Today its price is 2.18 euros.

Experts estimate that we will soon be paying between 10 and 20% more for the coffee we drink, an expected increase in price per kilo depending on the level at which each company purchases.

For example, 1 kg Greek Coffee, which has sold for 20 to 21 euros so far, will cost between 22 and 23 euros in June.

to Fredo cappuccino Prepare to pay €2.60 to €2.90 for it as well Fredo espresso From 2.40 to 2.60 euros.

The beauty of being healthy to be able to endure what lies ahead – the new -.

Can the rise be stopped?

Mr. Yakutoglu explained that there are some facts that can save us from the biggest expenses. But I suggest not holding your breath.

“There has been a slight de-escalation since Holy Week, while there is also the Brazilian crop that ‘comes out’ in June and July. This year is expected to be one of the biggest in the last 35 years. In theory, we should see pressure – Downward – on prices, as long as nothing negative of a climate nature happens.”

The expert stressed that we must always remember that this is a product that is traded on stock exchanges, adding that “The enforcement factor is particularly aggravatingExcise tax on coffee -From New Year 2017. It is an ad valorem tax with revenues of €140 million per year.

It charges 2 euros for raw, unprocessed and processed coffee, 3 euros for commercial product from abroad, and 4 euros for instant coffee.

Once imposed, the liquidity needs of companies double.

It certainly does not allow us to be particularly flexible. on the contrary. At the market value of coffee, this tax adds an average of 50 to 55% to the price of coffee.

Since this is a highly competitive industry, the consumer can enjoy their daily habits at a lower cost if the special tax does not exist or is reduced.».

Good luck and hope always dies last.