Global Coffee Shortage Averted for Now, but Bean Price Could Still Rise

Brazilian drought has cut into supplies of this very important beverage.

Freshly roasted coffee beans are sit in a bin at Graffeo Coffee on August 26, 2011 in San Francisco, California.
National Journal
Elahe Izadi
See more stories about...
Elahe Izadi
April 17, 2014, 1 a.m.

Cof­fee — the life blood of of­fices, the nec­tar of pro­ductiv­ity, the ban­ish­er of morn­ing grump­i­ness — could get even more ex­pens­ive this year.

Long story short: Brazil, which pro­duces much of the world’s cof­fee, ex­per­i­enced a his­tor­ic drought in Janu­ary. This month, the price of the pop­u­lar Ar­ab­ica vari­ety of bean that Brazil grows rose to its highest point in two years, at $2.07 a pound.

Ex­perts had pre­vi­ously ex­pec­ted Brazil to have a short­age. Now Brazil’s cof­fee in­dustry re­ports they have enough sur­plus to use as a cush­ion in the mar­ket, and sup­ply both their do­mest­ic and in­ter­na­tion­al de­mands. But the ex­tent of the crop dam­age is still not known.

At the same time, world­wide con­sump­tion of cof­fee con­tin­ues to in­crease, ac­cord­ing to the In­ter­na­tion­al Cof­fee Or­gan­iz­a­tion. Last year, de­mand was es­tim­ated at 145.8 mil­lion bags of the good stuff, with this year’s crop es­tim­ated at 145.7 mil­lion bags. “It seems likely that the mar­ket is head­ing to­wards a sup­ply de­fi­cit,” the ICO re­por­ted in March.

Are you freak­ing out yet? Be­cause I kind of am.

Well, maybe this will calm us (me) down: Roast­ers tend to keep enough beans around to cov­er them­selves for a few months, so that Ar­ab­ica price spike from earli­er in April likely won’t trickle down (or slow-pour, if you will) in­to our mugs any time soon. That could change, of course, but we shouldn’t ex­pect our be­loved cof­fee wa­ter­ing holes to have to sud­denly switch to something like tea.

And we’ve en­dured a big jump in prices be­fore. U.S. cof­fee prices rock­eted in 2011. Take a look at this chart show­ing av­er­age cof­fee prices each Decem­ber (this is cour­tesy of data from the Bur­eau of Labor Stat­ist­ics, which didn’t in­clude in­form­a­tion for 2008). Cof­fee prices fluc­tu­ated after the 2011 spike and hit a 10-year high at $6 per pound on av­er­age last year. Prices have gone down since then, at an av­er­age of $5 a pound last month. 

{{third­PartyEmbed type:in­fogram source:ht­tp://e.in­fogr.am/av­er­age-price-of-cof­fee}}

What We're Following See More »
LEAKER SHOULD STILL STAND TRIAL
Holder: Snowden Performed a Public Service
1 hours ago
THE LATEST

Former Attorney General Eric Holder said that NSA leaker Edward Snowden "actually performed a public service by raising the debate that we engaged in and by the changes that we made" by releasing information about government surveillance. Holder, a guest on David Axelrod's "Axe Files" podcast, also said Snowden endangered American interests and should face consequences for his actions. 

Source:
LOOKING FOR A CALIFORNIA COMEBACK
Bernie Hits Game 7
1 hours ago
THE LATEST

Sen. Bernie Sanders, needing an improbable comeback to take the nomination from Hillary Clinton, showed up to the Warriors' Game 7 in Oakland during a break in California campaigning. "Let's turn this thing around," he told the San Francisco Chronicle's Joe Garofoli.

Source:
BACKING OUT ON BERNIE
Trump Won’t Debate Sanders After All
3 days ago
THE LATEST

Trump, in a statement: “Based on the fact that the Democratic nominating process is totally rigged and Crooked Hillary Clinton and Deborah Wasserman Schultz will not allow Bernie Sanders to win, and now that I am the presumptive Republican nominee, it seems inappropriate that I would debate the second place finisher. ... I will wait to debate the first place finisher in the Democratic Party, probably Crooked Hillary Clinton, or whoever it may be.”

AKNOWLEDGING THE INEVITABLE
UAW: Time to Unite Behind Hillary
4 days ago
THE DETAILS

"It's about time for unity," said UAW President Dennis Williams. "We're endorsing Hillary Clinton. She's gotten 3 million more votes than Bernie, a million more votes than Donald Trump. She's our nominee." He called Sanders "a great friend of the UAW" while saying Trump "does not support the economic security of UAW families." Some 28 percent of UAW members indicated their support for Trump in an internal survey.

Source:
AP KEEPING COUNT
Trump Clinches Enough Delegates for the Nomination
4 days ago
THE LATEST

"Donald Trump on Thursday reached the number of delegates needed to clinch the Republican nomination for president, completing an unlikely rise that has upended the political landscape and sets the stage for a bitter fall campaign. Trump was put over the top in the Associated Press delegate count by a small number of the party's unbound delegates who told the AP they would support him at the convention."

Source:
×