Coffee price fears as cost of bean hits new high
A daily caffeine fix could become a whole lot more expensive as world coffee bean prices hit a new high.
Arabica coffee prices surged to $US2.2080 a pound - the highest level since February 2012, according to a report in The Wall Street Journal.
Dry weather and little rainfall in Brazil, the world's largest largest coffee grower, has seen the price of coffee double in the past year. Projections of a continued drought has raised concerns about future harvests, and could keep prices high for years to come.
The sharp rise in global coffee-trading prices could have an impact on the lower-quality-end of the Australian market, including supermarket and chain stores, say industry figures.
Peter Nikolakopoulos from the Kaffeina Group, which sells Illy coffee in Australia, told The Australian the cost of a takeaway espresso could reach $5 in the near future, but the rise is a reflection of labour costs, and not a price spike in global coffee-trading.
He said specialty coffee roasters in Australia usually had independent suppliers around the world, making them less vulnerable to volatile coffee prices.
"I'll use the example of Illy, which is an expensive, premium coffee which retails for $50 a kilo," he said. "You get 140 cups out of a kilo, so you're talking a 35 cent coffee component. It's a long way from there to $5. The main costs are labour, rents and electricity."
The recent coffee harvest in Brazil was the smallest in three years and follows Brazil's worst drought in decades.
News Break - October 8
