Are Coffee Prices on the Way to a 10-Year High?

Coffee has become an expensive treat during the pandemic after coffee prices rose to a full $2.50 per pound at the end of 2021, close to 2011 levels. At that time, coffee prices rose to over $2.90 per pound.

Coffee Prices 2021 – Today
Coffee Prices Over the Last 13 Years

According to the Brazilian Coffee Industry Association (ABIC), coffee production in Brazil plummeted 22.6% last year. Brazil is the largest producer of coffee beans in the world. The slump is mainly blamed on the unfavorable weather, but of course, the pandemic has also made its contribution.
It also sounds more like inflation, because the last time coffee prices skyrocketed was in 2011, which happened to be after the last crisis. A higher amount of currency chasing a smaller amount of goods, in this case, coffee, sounds like classic inflation.

What’s more, the higher costs are now being passed on to the customer. In South Korea, it is reported that Starbucks is on its way to increasing the selling price of coffee. This is met with great criticism there, as many already consider coffee prices to be high. The price of coffee there is around 4,100 won, whereas in many other coffee shops the price is around 3,000 won.

Analysts are now predicting further increases in coffee prices for 2022. It remains to be seen whether the highs from 2011 will be tested. Many countries, including the U.S., now want to pursue a stricter monetary policy because of rising inflation. This could counter the price increase, but here is still the classic supply and demand theory given. If coffee production does not recover, further price increases can be expected.

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