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
Add to Briefcase
See more stories about...
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}}

What We're Following See More »
SANS PROOF
NRA Chief: Leftist Protesters Are Paid
23 hours ago
UPDATE
NEW TRAVEL BAN COMING SOON
Trump Still on Campaign Rhetoric
1 days ago
UPDATE
“WE’RE CHANGING IT”
Trump Rails On Obamacare
1 days ago
UPDATE

After spending a few minutes re-litigating the Democratic primary, Donald Trump turned his focus to Obamacare. “I inherited a mess, believe me. We also inherited a failed healthcare law that threatens our medical system with absolute and total catastrophe” he said. “I’ve been watching and nobody says it, but Obamacare doesn’t work.” He finished, "so we're going to repeal and replace Obamacare."

FAKE NEWS
Trump Goes After The Media
1 days ago
UPDATE

Donald Trump lobbed his first attack at the “dishonest media” about a minute into his speech, saying that the media would not appropriately cover the standing ovation that he received. “We are fighting the fake news,” he said, before doubling down on his previous claim that the press is “the enemy of the people." However, he made a distinction, saying that he doesn't think all media is the enemy, just the "fake news."

FBI TURNED DOWN REQUEST
Report: Trump Asked FBI to Deny Russia Stories
1 days ago
THE LATEST

"The FBI rejected a recent White House request to publicly knock down media reports about communications between Donald Trump's associates and Russians known to US intelligence during the 2016 presidential campaign, multiple US officials briefed on the matter tell CNN. But a White House official said late Thursday that the request was only made after the FBI indicated to the White House it did not believe the reporting to be accurate."

Source:
×
×

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.

Login