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 Izad
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Elahe Izad
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}}

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