As the sun peeks over the horizon and the kettle begins to whistle, millions of Australians reach for their favourite mug, anticipating the rich aroma and invigorating taste of their morning coffee. However, that cherished ritual might soon leave a bitter taste as coffee drinkers around the country brace for a jolt—not from caffeine, but from soaring prices.
The reason? A dramatic surge in the cost of coffee beans on international commodity markets, which has seen prices hit record highs.
Arabica beans, the world’s most beloved variety for their smooth, sweet profile, have seen an increase of over 80% this year alone, reaching a staggering $11.88 per kilo. Meanwhile, robusta beans, the backbone of many instant coffees with their stronger, more bitter flavour, have nearly doubled in price, touching$8,937 per metric tonne.
This price hike is the result of many factors that have been brewing for some time. Brazil and Vietnam, the globe’s coffee powerhouses, have been battered by adverse weather conditions, leading to diminished harvests. Brazil faced its worst drought in nearly a century, followed by heavy rains that threatened its crops. Vietnam, too, has grappled with bad weather, putting further strain on robusta production.
The impact of these climatic challenges is compounded by a relentless increase in global demand for coffee. As more people seek out the comfort and routine of a good cup of coffee, the pressure on supply chains intensifies.
This has led major players in the industry, such as Nestlé, owner of Nescafé and Nespresso, to make tough choices. They have raised prices and reduced pack sizes in an effort to balance the books against the rising cost of beans. While they strive to be more efficient and absorb costs where possible, the reality is that they ‘have seen significant increases in the cost of coffee, making it much more expensive to manufacture our products’.
Similarly, the Italian coffee giant Lavazza has warned that prices are likely to remain elevated until at least mid-2025, citing, ‘The coffee supply chain is dramatically under pressure.’
However, some industry experts, like Will Corby of Pact Coffee, suggest that the price increase could have a silver lining, stating that coffee has been ‘sold for far too cheap from its countries of origin to the West for far too long. Huge coffee companies might say that these market highs are bad news, but, in reality, farmers are finally being paid enough to live on.’
So what does this mean for you? It’s time to brace for impact. Your daily brew may soon cost more, whether you’re picking up a latte from your local café or stocking up on beans for your home espresso machine. It might be hard to adjust, but understanding the global context can help us appreciate the true value of our beloved cuppa.
In the meantime, we’d love to hear from you. Have you noticed a hike in your coffee expenses? Are you changing your coffee habits in light of these price rises? Share your thoughts in the comments below.
Also read: Why does coffee made with alternative milk cost more?
