Over recent months, global coffee prices have been impacted by a number of factors.
On one hand, there has been some downward pressure on prices as traders worry tighter global economic times may reduce consumption.
While there have been some concerns about a short-term tightening of global supply, good rains in Brazil have many in the market feeling these worries will be temporary, with strong harvests to come.
In contrast, heavy rains in Indonesia, the world’s third largest Robusta producer, are likely to see that country’s coffee production fall by around 20 per cent.
That said, the concerns around the emergence of an El Nino weather pattern which have impacted other agricultural forecasts have also raised concerns for global coffee production, particularly around the end of 2023.
All this leads to the big question of just how much the change in global coffee prices are likely to impact the price of your morning coffee, whether it be takeaway, home espresso, coffee pod, plunger, moka pot or even good old instant (as your correspondent swears by).
If we look at the most conservative case of ordinary global coffee market fluctuations, we should not see an impact on the cost.
That said, a sustained increase in the price of global coffee could ultimately filter through in costs and contribute to a retail price increase – but that would combine with other inflationary pressures already buffeting the cost.
Factors such as rising wages, increased energy prices, higher rent and packaging costs all loom large as inflationary pressures on your takeaway morning pick-me-up. Moreover, Australians drink mainly milk coffees so the price of milk is a key factor.