Recent months have seen coffee beans traded on international markets achieve some of the lowest prices in years. Overnight, prices dropped to 117.25 US cents a pound, levels not seen since 2013.
The International Coffee Organization blames the downward run on a number of factors: currency fluctuations, China’s economy, and fears that the upcoming El Nino could be one of the strongest on record.
But this may be the norm for a while. The coffee futures market is looking pretty bearish as well, with prices only rising above 140 US cents a pound for the 2018 contracts. Here’s the recent trades for beans that will be delivered in December this year:
While all this has been going on, the price of a brewed coffee continues to rise. According to the Cappuccino Price Index, the average price for a cup of Joe in Australia has risen 11.8% in the past five years.
So, the million dollar question: why hasn’t the declining cost of beans trickled through to consumers?
Well, added to the fact that coffee beans are priced in USD, against which the Aussie dollar has recently declined, the cost of the beans are just one input in the cost of your coffee. While beans have been going down, other incidentals, most notably rents, have been stable or rising.
Still, wouldn’t it be nice to see a barista price war?
Business Insider Emails & Alerts
Site highlights each day to your inbox.