More price rises are on the way for coffee drinkers

9 August 2024

Bad weather continues to hit coffee growers in Brazil and Vietnam, forcing Australian coffee suppliers to warn of shortages, and more price increases.

It’s been a tough few years for coffee producers. When I wrote about production problems almost three years ago, droughts in Brazil were impacting harvest yields, causing a reduction in supply. Labour shortages, occasioned by the pandemic, saw growers in NSW also struggling to harvest.

By early 2022, there were fears coffee might be on the way to seven dollars a cup. Mercifully, that dire prediction has yet to come to pass.

A large cup of takeaway coffee costs five dollars at the places I usually go to. It’s a sensible price, especially if paying with cash, as I sometimes do. I’ve become quite used to having no small change rattling around in my pocket, even if current coffee prices are leaving me more, er, out of pocket.

If the cost of a cup were to press on towards the six dollar mark, I’d start becoming seriously worried about the viability of many coffee shops. Surely some customers would start cutting back, though there is the argument that consumers continue to make smaller comfort purchases, while forgoing other, more costly, outgoings.

And check out the image in this ABC News article, which breaks down the cost of a cup of coffee in Australia. For a small cup, coffee beans only constitute about twelve percent of the total cost. The rest of the money goes elsewhere. But perhaps we should be thankful in Australia after all. A cup of coffee costs about eight dollars in San Francisco, while people in parts of Switzerland pay ten dollars. Five dollars must seem a like a joke to coffee drinkers in those locations.