Australia Coffee prices are expected to rise A mug of coffee to cost more
Crisis is brewing inside the coffee market, and your everyday mug of coffee is set to cost you $7 per cup, according to experts.
The favourite morning ritual of popping into a coffee shop for a brew is about to become pricier.
According to industry sources, the cost of coffee will rise tremendously in the next years.
A combination of factors, mostly related to global manufacturing and supply networks, will cause the cost of one cup of barista-made coffee to rise by around $1 in the short term.
The most obvious cause of the rise has been environmental concerns like as drought and frost affecting bean output in Brazil, one of Australia’s largest exporters.
The country produced almost 50% less coffee in 2021-22 than the previous year, and these difficulties are projected to have an impact on the harvest for the next three years.
“If we stated $4-$4.50 for just a small coffee was indeed the norm, I would expect you to see it at $5-$5.50 very soon,” Soho Coffee Roasters owner Steve Fulton told 7NEWS.com.au.
Mr Fulton claims that several other factors affecting global supply chains, such as rising gasoline prices prompted by the Ukraine conflict, have yet to affect Australian customers.
They will, however, eventually.
“That hasn’t happened because we have future contracts.” So we’re still pulling down on our inventories that we’ve already locked away,” he explained.
“It’ll be in the following four or six months until we secure the next stock.”
As a result, the company’s manufacturing and exporting coffee will need to pass those expenses on once more.
“As a result, we definitely anticipate a price increase.”
But the coffee we’re buying now is actually almost double cost of what we were buying two years ago.”
It works both ways.
Another issue is that rising freight charges, which are connected to shipment container backlogs caused by COVID-fueled workforce shortages, mean that Australia is having difficulty getting coffee to it’s own ports.
“Rather than going to Australia, where they’re only exporting and not really importing, they’re picking routes like USA and China because they’re getting the full cargo, both ways effectively,” Mr Fulton explained.
Mr Fulton is also concerned about labor shortage in the hospitality industry, which is driving up wages.
Many of the casual workers who were laid off by venues during the COVID lockout found work in other industries, he claimed.
A confluence of variables has led to forecasts that a regular mug of coffee from a cafe would cost $7 by the conclusion of the year.
The only thing that has kept prices from rising is cafes’ reluctance to pass on cost increases to customers, according to Café Operators and Baristas Association of Australia President David Parnham.
“The truth is that it ought to be $6-$7. It’s only that cafés are delaying passing on the per-cup charge to customers,” he explained.
Would Australians, though, pay this much for a mug of coffee? According to Roger Simpson of The Retail Solution, they will.
“I think it’s simply so ingrained in our culture,” he explained.
“A few years ago, we were paying $3.50. We now pay $5.50 to $6 depending on where you go. “I don’t think a lot of us will be prepared to give up coffee, if the price rises.”
Another concern would be whether purchasing Australian-grown coffee would drive down prices, given that the issue is one of global supply.
Not necessarily, since Australian producers are unable to meet the demand.
“However, if they were able to grow and maintain their costs comparable, it’d be simpler for us to use,” Mr Fulton said.
“We’d be pleased to do it if the quality is good.”
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