Coffee prices may be set to soar as the global market skyrockets
The past week has seen the equivalent of the total world’s annual coffee product traded in a five-day period, creating panic buying.
Origin producers have also begun withdrawing from the market in anticipation of higher prices in the future, according to Australian coffee roasters Griffiths Coffee.
“The increase in coffee bean prices will have an immediate effect on spot prices for beans across the board, especially speciality varieties, with coffee bean prices this month alone increasing by 25 per cent,” said Chris Togias, Director Griffiths Coffee.
With coffee prices already increased by 50 per cent in the last year, the market is becoming even hotter for coffee beans, according to Griffiths Coffee. Coffee prices are getting an additional jolt as abnormally hot and dry weather in Brazil, which produces a third of the world’s coffee beans, pushes the price of Arabica to its highest price since October 2012 on concerns of tighter global supplies.
Flow on to consumers
The change of weather in Brazil has caused estimated losses from 3 per cent to 30 per cent of coffee bean crops, with uncertainty on which crops can be revived from drought by rain, and which are past the point of saving.
The increase of current coffee bean prices that affects the market currently will eventually flow on to consumers in the coming months, according to Griffiths Coffee.
“In the short term, prices should remain stable, but in the depths of winter, as roasters’ forward contracts expire, a cup of coffee could increase upwards of 20 cents a cup,” Mr Togias said. “This global trend is similar to the price hike of 2010/2011,” he said.
Australian Food News reported in May 2012 that the price of takeaway coffee in Australia had increased significantly in the first six months of 2012.
Founded in 1879, Griffiths Coffee is an Australian family-owned coffee roaster with coffee roasting facilities in Melbourne. Griffiths Coffee distributes across Australia to both the foodservice and retail sectors.