Your coffee is about to get more expensive, thanks to the latest shortage
- Coffee bean prices are on average 15% higher than they were last year.
- The cause: a record drought in Colombia, protests, and a huge backlog of shipments.
- Consumers could start to feel the effects of this shortage at the supermarket & coffee shops.
Consumers might get more than just a jolt of caffeine when buying their next cup - high bean prices means that latte drinkers and home brewers alike should prepare for some potential sticker shock.
Yes, coffee may be the next good hit by soaring prices and product shortages. According to the Financial Times, arabica - the bean that's probably powering the cup on your desk at this moment - reached a four-and-a-half-year high in early June.
The commodity soared as high as $1.70 before settling around $1.50 - well over last year's prices of around $1.13, according to data from Macro Trends. Experts say the cause of this inflation is a record-breaking drought in Colombia, protests, plant funguses, and a huge backlog of coffee waiting to be shipped.
"It's a big headache," Carlos Mera, an analyst at Rabobank, told the Financial Times. "There is plenty of coffee waiting to be shipped from producing countries, where the protests earlier this year interrupted the coffee flow."
German coffee maker Tchibo says it will raise the price of coffee by 50 cents a pound. Typically, coffee buyers have contracts with their suppliers that solidify the price of the beans for roughly three to six months. But when those contracts expire, there could be a surge in coffee price, The Financial Times reports.
But coffee isn't the only shortage we've been tracking. Feminine products, chicken wings, cars, computer chips, lumber, and more have struggled to keep up with demand post-pandemic.
And for chains like Starbucks and Dunkin, already battling an industry-wide labor crunch, the pricing pressure may be yet another issue on investors' minds.