Wholesale coffee prices have hit their highest level in over ten years and it may not be long until it impacts on the cost of your morning cuppa.
Arabica coffee is now trading at $2.69 per pound on the Intercontinental Exchange (ICE), the highest level it has reached since 2011.
It comes after Citibank analysts earlier this year warned that coffee prices could continue to rise in both the short and long term.
On Newstalk Breakfast this morning, Newstalk Business Editor Joe Lynam said the surge is down to weather conditions in two of the world’s largest coffee producing nations.
“Brazil, basically, is experiencing one of the worst droughts on record,” he said.
“Farmland fires have broken out in some of the sugar-producing regions as a result and Arabica, which is the most popular bean you can get, is affected by this.
“This is all pushing up the price of coffee … which almost certainly will translate into higher prices in Europe and they are high already – how often do you get a coffee for less than €3.50 these days?”
The rise in prices began with a heat wave in Vietnam which impacted on Robusta coffee production, which had a knock-on effect for Arabica.
Citi group is also pointing towards a change in consumer attitudes with more people around the world now choosing coffee as a natural source of energy in the morning.
Either way, Joe is warning Irish consumers that they could soon find themselves “paying a lot more for your favourite tipple every morning”.
