Ask LH: Is Coffee Becoming More Expensive?

There has been some talk around the coffee community recently about the potential increase in coffee prices and this, understandably, has caffeine addicts spooked. Sorry to be the bearer of bad news, but there is some truth to the whispers that coffee may start becoming more expensive across the board – and it’s bigger than your local spot jacking up its prices.

Whether you’re a cafe coffee junkie or a brew-your-own-cup-at-home kind of person, you may not be able to escape the incoming coffee pricing shift.

So, for this week’s Ask LH, this non-coffee drinker explored precisely what is up with the coffee price hike.

Why is coffee getting more expensive?

As if 2021 couldn’t get any more chaotic, global coffee bean prices on average have surged 21.6% over the past year. This increase will not only affect coffee consumers but will also greatly impact local coffee roasters and retailers.

According to data from IBISWorld, the global coffee price is set to jump to $3.65 per kg this year alone. Those are some pretty expensive beans.

The cause? Climate change and Covid19 – two things we are far too acquainted with at this point. If you thought that the only thing staying warm was your cup of bean water and not the globe, brace yourself. It looks like climate change has gotten its grubby mitts on your precious coffee beans, too.

Brazil, aka the world’s largest coffee producer and Australia’s second-largest source of coffee imports, is experiencing the disastrous effects of climate change.

Frost and drought have severely impacted Brazil’s coffee plants, destroying almost 20% of crops. While coffee farmers in Brazil are used to frosts in July and August, this year, freezing conditions came as a shock as an unprecedented Antarctic front caused it to snow over the farms.

How are the beans affected?

These unprecedented and damaging conditions are concerning because they will directly impact the number of coffee beans that Brazil will be able to export. The frost has killed off a majority of the younger coffee plants that are under two years old, while the ones under four years old will start producing less coffee over the coming years.

Brazil is also in a drought, so they can’t exactly access the levels of water needed to maintain and preserve the coffee plants. It’s not looking good, my coffee lovers, and I hate to say it, but we could potentially experience a coffee shortage soon.

Most of the impacted crops were Arabica beans, which are the most well-known for their superior taste. They are also likely the beans responsible for that delicious brew on your desk right now – so savour every last drop you can.

What does Covid have to do with coffee beans?

Beyond the damaged crop, there are other factors leading to the global increase in coffee beans prices, like the global pandemic.

Brazil has faced one of the worst coronavirus situations, with more than 600 thousand deaths from the virus. Sick workers and farmers and rising freight costs have meant that the coffee industry in Brazil, which relies heavily on workers and manual labour rather than automated systems, has been dramatically affected.

This spells disaster for the coffee industry globally because sick workers affect the ability to transport stock at a speed that meets the demand.

Covid hasn’t just plagued the transportation of coffee in Brazil though, there is currently a global supply chain crisis. If a country like Brazil cannot export enough coffee, then the entire chain will be affected and could potentially collapse.

And it isn’t just coffee that is being affected, either. Everything from feminine products, chicken wings, cars, computer chips, lumber, and more have struggled to keep up with the demand post-pandemic.

Will this affect Australian coffee prices?

Despite all the terrible things happening globally that I literally just mentioned, it doesn’t necessarily mean bad news for us Aussies – not yet at least. I’m sorry for taking you through that caffeine-induced panic read but I needed to get all the facts out there first so you wouldn’t be shocked by all this in the future.

Although the price of the Arabica coffee beans is skyrocketing around the globe, Aussie coffee lovers will be okay for the short term. Because we are bloody obsessed with coffee here in Australia, it means that we have a wide variety of brands (or cafes) to choose from.

This just means that local roasters and suppliers have to get competitive with pricing, which also means that they will be the ones to cop the full brunt of the price surges.

With coffee doomsday approaching, local suppliers may have to rely on pre-existing stock, which runs the risk of your coffee not tasting as good, so there’s that, too. This will eventually lead to the raising of prices for consumers because bean demand will be higher, but as you just read, we ain’t got any.

If you’re anything like my coffee-addicted friends, I know you won’t stop buying coffee, no matter the price. So don’t be too angry that your morning pick-me-up is going to cost you a little bit extra, just do what I do for everything and blame it on the neverending chaos of 2021, and climate change, oh and the pandemic.