It is not a great time to be a coffee drinker.
In general, coffee bean prices are the highest they’ve been in more than a decade, according to Gavin Fridell, a global development studies professor at St. Mary’s University.
Prices are expected to rise even higher as two of the largest coffee producers face unprecedented drought.
Brazilian coffee plantations are grappling with the country’s worst drought it’s seen in 70 years. Wildfires have decimated coffee crops.
Similar heat and drought conditions in Vietnam are already impacting next year’s crops.
“When both of these two large coffee producers are having a crisis then prices in general are going to be driven up,” Fridell said.
Brazil is the largest coffee producer in the world. Vietnam is the second largest. Together, the two countries make up about half of the global coffee supply.
Two types of coffee beans are impacted: Brazil’s arabica beans and Vietnam’s robusta beans.
Arabica beans are used in a typical cup of brewed coffee. Robusta beans are used in instant coffee.
“I don’t know that it’s going to have huge ramifications for consumers,” Fridell said.
“Coffee is a pleasure that people will pay for even when they can’t afford other pleasures.”
Locally owned shops, like Regina’s Pause Coffee Shop, likely won’t see the effects of the drought for another eight to 12 months, according to co-owner Alayne Dubord.
The shop has seen small, steady price increases, she said. Dubord expects customers may have to pay 25 cents more for their daily cup of coffee. At a specialty coffee shop, it could be an increase of one or two dollars per bag of coffee.
“There’s definitely fluctuation from one harvest to the next for the producers that our roasters work with,” Dubord said.
Pause Coffee Shop works with roasters who source their beans from several other countries besides Brazil and Vietnam, which may mitigate any supply issues.
“Brazil has been one of the most stable sources for the nice, classic, nutty, chocolaty coffees. So those might be less accessible of a price point in the next eight to nine months,” Dubord said.
Inflation has already increased coffee prices by 23 per cent in the last few years, according to Fridell.
Prices of raw coffee beans, also known as green coffee, depend on supply and demand, and are impacted by several factors including growing conditions, transportation, infrastructure and labour, according to National Coffee Association president and CEO William Murray
“Today, the commonly referenced green coffee or ‘C price’ is at record highs, in part because these factors have reduced supply and diminished the large global coffee surpluses seen in past years,” Murray said.
“Of course, the price of coffee from a café or store also depends on the kind of beverage, the cost of other ingredients and inputs, and the shop’s overhead.”
Current supply issues are worsened by a recent move from big coffee companies to purchase supply “just in time,” according to Fridell.
“This means that they haven’t been storing much coffee in their warehouses. It’s very expensive to do that when financing is so high. So instead, they’ve turned towards ‘just in time’, which makes them even more vulnerable suddenly when there’s the supply crisis,” he said.
While the drought might not impact coffee drinkers’ wallets too much, Fridell said it does raise a bigger concern around climate change. Some predictions estimate that 50 per cent of the world’s coffee crops could be lost to climate change.
“It’s not something that we’re likely to see a major impact on the accessibility of coffee in the near future. But, there has been speculation that coffee is a finite resource in the global trade exchange, and in the long, long term we might see depleted access,” Dubord said.
“So, we ought to treat it as something scarce and value it a little bit more.”