Why coffee bean prices are on the rise

Why coffee bean prices are on the rise

Hey fellow coffee lovers you may have heard that coffee bean prices (green bean) have been on a tear over the last 12 months, up well over 100% and there is no clear signs of that slowing up.


Which is great news if you trade the long side of coffee in the commodities market. For the rest of the coffee market it is not so good and may further change the shape of the coffee market in our post COVID world.

Why are they on the rise?

A series of environmental events in Brazil, which is the world’s leading coffee producer at about 35% of global production has been a big driver behind the increase. A severe drought early in the season along with a snap freeze damaging some of the crops that flourished have led to the lowest harvest in 12 years at the same time coffee consumption is on the rise.


Add to that the Covid related impacts on the supply chains, such as increased shipping costs and labour shortages, and you can see why green bean prices are flying.


We are already seeing an increase in wholesale pricing due to coffee roasters paying more for green beans and rising freight costs. I wouldn’t be surprised if that great cup of coffee at our local café starts to nudge up over the next 3-12 months as higher bean process and other inflationary pressures forces café owners to put prices up.

What does that mean for me?

I will be watching the coffee market with interest to see how coffee lovers’ consumption behaviours adapt to the changes.


At the start of the pandemic, we saw many coffee lovers pivot from buying Café coffees as the norm towards self-brew coffee consumption at the workplace and office with many staying the course as they saved money whilst still getting the quality coffee experience they expect.


And why not right, in 2021 with such an array of affordable brew methods and quality local coffee beans on offer you can get a comparably quality brew with the ego boosting self-talk joy of "Ahh, I created this".


At Perth Coffee Exchange we are already seeing an increase in self-brew coffee consumption as coffee lovers are looking to save some dollars from other inflationary pressures showing up in the weekly shop, fuel, utilities etc.


Will this trend of increasing self-brew coffee consumption accelerate once a cup of social coffee creeps higher?


Time will tell on this one and it will be interesting to see how the coffee market evolves in the post COVID world.

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