Why your coffee costs a little more lately
A CHAT ABOUT COFFEE PRICES IN AUSTRALIA
Hey coffee friends!
We know you've probably noticed your daily coffee costs a bit more these days. And trust us, we feel it too! We wanted to take a moment to chat about why that's happening and give you a bit of insight into the world of coffee prices.
It's a global issue!
First, it's essential to understand that coffee is a global commodity, like oil or gold, and its price is influenced by many factors.
The Global Coffee Market
Coffee is primarily grown in Brazil, Vietnam, Colombia, Indonesia and Ethiopia. These regions are subject to weather patterns, political situations, and economic fluctuations that directly impact coffee production.
Top producing coffee countries 2024/2025
Data and image from USDA Foreign Agricultural Service
fas.usda.gov/data/production/commodity
You can track the global coffee market through resources like Investing.com's US Coffee C page. This site provides real-time data and historical trends, showing how coffee bean prices fluctuate. You can see how the price of coffee has been trending over the last year or longer as seen in the image below. This example shows a general upward trend, which is what we have been experiencing.
Why is coffee more expensive now?
The rise in the price of green coffee is largely due to weather changes, lower crop yields, demand outstripping supply, inflation, supply chain issues, and market speculation, as investors predict shortages, further driving prices higher.
Weather
Climate change is real, and it's affecting coffee crops. Droughts, frosts, and excessive rainfall can significantly reduce harvests, leading to supply shortages and higher prices.
Brazil, a major coffee producer, has faced severe weather challenges in recent years, impacting global coffee supplies. Colombia has also been greatly impacted by unusual rain patterns.
Shipping and logistics
Getting coffee beans from their origin to our roasters and then to your cup involves a complex supply chain.
Increased fuel costs, shipping container shortages, and port congestion have contributed to higher transportation expenses.
Inflation and labor costs
Rising costs in every connected industry are impacted by inflation and labour costs. From farming, transport, export, and freight to cafes. These increases are reflected in the final price of your coffee.
Australia has had a period of increased inflation, impacting the costs of operating a cafe.
So, what are local cafes and coffee roasters doing to keep prices low?
From our first-hand experience dealing with many cafe owners and coffee roasters, most operators are doing their best to keep the price rise low. They are optimising operations, streamlining their businesses, reviewing all costs, creating efficiencies, assessing profit margins in all areas and offering incentives and discounts where possible.
Operators are also doing what they can to maintain the quality of the coffee and customer service we all love and rely on. This includes a commitment to sourcing high quality coffee beans and paying farmers a reasonable price.
Want to go deeper?
Check out this informative video below from Bloomberg Opinion for a great overview of the coffee supply chain and the factors that influence prices.
