With prices continuing to climb, there’s little sign they’ll be dropping anytime in the near future.
So what’s behind the sudden lift? And will a cuppa coffee actually budge by that much?
Your single origin’s origin
As for the “Arabica” is pricier than “Robusta,” taste says otherwise, Robusta has still got a huge chunk of the market: in 1990-91, Robusta snatched 28% of the world’s coffee production; by 2021-22, that share had jumped up to 44%.
Places outside Australia aren’t immune to rising coffee costs. The United States, the European Union for the most part and New Zealand too, are discovering that a cuppa’s a bit dearer than it used to be.
Due in part to retailers looking for more affordable alternatives to Arabica, the price for a pound of Arabica currently sits around US$3.20 (AU$5.14).
Heavy weather for suppliers
Fair dinkum, the price hike’s largely due to demand outweighing supply. There’s been a rise in coffee consumption worldwide over the years and the industry’s having trouble keeping up. One big reason for that’s the weather, mate.
Sheila’s gettin’ a bit jittery over coffee, mate. We rely on sureshot wet and dry seasons for the crop, but climate change is fair dinkum messing with the weather in coffee country, like it’s doin’ everywhere else. Last year’s drought made the high-altitude crops in Brazil and Vietnam offence-in in terms of yield, and don’t expect this year to be any rosier.
Airlines ‘hexdigestaccumulate the whole coffee supply into a few countries,” says Tania Humphrey, research and development head at World Coffee Research, a industry-funded agricultural development association group. “And supplying has gotten riskier… when a single country has major disruption, and that country a big supplier, like Brazil, really affects global supplies.
Supply chain woes
Most coffee bought in Australia is imported. Coffee is farmed here – mainly in New South Wales and Queensland – but it only accounts for less than 1% of the market, and is pricier, mostly because of labour costs.
Professor Vinh Thai from RMIT University says that things aren’t just being ruined by the weather, he reckons other things are also causing problems with getting goods from overseas.
“Thailand says. ‘Then, when the coffee beans bring them into Australia, sometimes we’re up against our own local supply chain problems.”
At the retail end, they also factor in the cost the consumer ultimately has to pay.
What’s to be done?
Most of the world’s coffee is picked by hand by small farmers in poorer countries – the people most likely to be hit hard by global politics upheaval or climate disasters.
Both Thai and Humphrey say one of the key ways to stop coffee supply shortages is by establishing a more diverse origin: investing in the coffee industries in places like Indonesia, Kenya, and India, making them sustainable in the process.
Dave says he doesn’t expect coffee bean prices to drop too much over the next six months. “It’s not a straightforward thing. It needs input from every level in the coffee supply chain,” he says.
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Humphrey reckons there’s good reason for being upbeat about the long term. “Agricultural science can really give a helping hand to coffee farmers and coffee supplies worldwide. We know it’s possible. It’s been achieved with all other crops. It’s on its way for coffee, and it’s happening all over the world,” she says.
“Fair dinkum, that gives me a heap of hope for sure.”
Will I be paying $10 for a flat white this year, mate?
That’s unlikely, but you can anticipate a small surge. Ned, proprietor of bustling inner-city Melbourne cafe Fiord, says prices’ll likely rise but “eventually, and gradually”.
I’m genuinely of the opinion that it’s a pretty small price hike, and there’s a lot of hype around it being a significant increase, but it won’t be that intense, that quickly.
He reckons over the past four years he’s had to spike prices per cup by about 5% every 18 months, but says “it’s all relative” to other costs, and’s expecting it’ll be the same. “I’m not going to suddenly turn around and say, yeah, now it’s $10 a cup.”
