The Coffee Price Has Halved, So Why Does Your Flat White Still Cost The Same?

Coffee bean prices have been plummeting as supply outstrips demand. Photo: Shutterstock

When coffee prices rise, the price of beans is often blamed, but did you know that the global price of arabica beans, used to make premium coffee, have more than halved in the past three years?

Bloomberg reports that the industry is in for its longest slump in 20 years.

Brazil, the biggest producer of arabica coffee, is expecting a bumper crop, but supply continues to exceed demand, while Vietnam, the biggest producer of robusta beans, used in instant coffee, has seen prices fall 13 per cent in 2013.

But that doesn’t mean the cost of a coffee on the way to work will fall.
That’s because the coffee is one of the least expensive ingredients. Even the takeaway cup actually costs more than the beans , as well as milk, and the most expensive components is labour, which BIS Shrapnel estimates is around 40 per cent of the price, alongside rent (now you know why hole-in-the-wall cafes are a growing trend).

If fact, there are predictions that the price of a coffee will continue to rise, with the average topping $4 in Sydney.

There is good news though: The Smithsonian reports that fears that drinking coffee stunts growth in children are a myth, which means hipster kids can put down the red lollies and order an espresso instead.

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