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27th September 2024
02:19pm BST
Wholesale coffee prices have soared to their highest level in over a decade, and experts warn it may soon affect the price of your daily cup.
Arabica coffee, the most popular variety, is now trading at $2.69 per pound on the Intercontinental Exchange (ICE) - a price not seen since 2011.
This spike follows predictions made earlier this year by Citibank analysts, who warned that coffee prices could continue to climb in both the short and long term.
Speaking on Newstalk Breakfast, Business Editor Joe Lynam explained that the price hike is largely due to extreme weather conditions in two of the world’s largest coffee-producing nations.
“Brazil is facing one of the worst droughts on record,” Lynam said.
“Fires have broken out in some of the country’s sugar-producing regions, and Arabica, which is the most widely consumed coffee bean, has been hit hard.
“All of this is driving up the cost of coffee, and it’s likely we’ll see these higher prices reflected in Europe, where coffee is already expensive.
“It's becoming rare to get a cup for less than €3.50.”
The price surge began with a heatwave in Vietnam, which disrupted the production of Robusta coffee, a variety often used in instant coffee blends.
The shortage of Robusta has had a ripple effect on Arabica, further driving up prices.
Beyond weather disruptions, Citibank analysts also point to changing consumer habits as a factor in the ongoing rise.
As more people around the world embrace coffee as their go-to morning beverage, demand continues to grow, putting additional pressure on supply.
Irish customers may soon feel the pinch, with Lynam warning that they could end up “paying a lot more for your favourite tipple every morning.”
As the global coffee market faces challenges from both environmental factors and increased demand, it seems likely that higher prices for your morning brew are on the horizon.
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