Price of coffee hits record highs as weather hits market – amount you pay for cup set to skyrocket
THE price of coffee is set to hit record highs yet we continue to dig deeper into our pockets to fight the winter chills with a warm drink.
While the cost of robusta beans is on the rise, arabica beans cost more now than they have done in 50 years.
The international price of arabica beans hit £2.70, on Tuesday, December 10, reaching levels not seen since 1977.
This is a 109 per cent increase over the past 12 months and a staggering 145 per cent in the past five years, The Grocer reports.
Due to the increases in wholesale prices over the past three years, a fancy latte in London now costs a whopping £5.
The jump in price comes after a spell of draught in two major coffee producing countries, Brazil and Vietnam.
Now coffee bean prices have surged by over 40 per cent.
Robusta beans, which tend to be cheaper as they’re used in instant coffee, broke records when they hit £4,510.63 per tonne at the end of November.
Vietnam is the worlds largest producer of the robusta bean, but after a lengthy dry spell followed by heavy rain at the start of harvest production reduced significantly.
In turn, prices accelerated and many coffee companies decided to switch to arabica beans, as it was costing around the same as robusta beans.
Again, this took its toll on arabica bean demand, driving overall prices up in the market.
However, the cost of robusta beans has remained the high due to the Houthi-induced Red Sea disruptions last December.
This resulted in a reduction of robusta production, driving up its cost.
To cope with high demand from China, coffee farmers in Vietnam are instead growing durian — the world’s stinkiest fruit.
Ole Hansen, head of commodity strategy at Saxo Bank, said: “Drought in Vietnam and farmers switching to other products is the main reason why [coffee] is trading at record levels.
“The cost of your cuppa will likely rise further, although it’s worth remembering that only a fraction of the final cost is the actual cost of the beans.”
Meanwhile in Brazil, a key producer of arabica beans took impact with a lengthy dry spell.
This raised concerns about future supplies from the country.
Despite this, one pound of coffee beans can make about 30 cups.
Plus, beans are estimated to make up just just ten per cent of a takeaway coffee’s cost.
The rest is for packaging, equipment, wages and shop rents.