Coffee beans price hits 34-year high commodity shoots up by 20% within weeks and experts warn cost has yet to peak

Coffee beans price hits 34-year high
commodity shoots up by 20% within weeks and experts warn cost has yet to peak

By Ryan Crighton

Published: 12/03/2011

DEARER: Ian Cukrowski says coffee prices are rising. Kami Thomson

Record fuel prices have dominated the headlines for months, but soaring prices of another kind could be about to hit consumers in the pocket.

The cost of raw coffee beans on the commodities market has reached a 34-year high after rising by 20% in a matter of weeks, with experts warning that they have yet to peak.

The International Coffee Organisation says a combination of rising world demand and poor harvests in Colombia, Brazil and Latin America has caused a shortage of high-end Arabica coffee beans.

This time last year, 1lb of beans cost around 76p on average – but last week that price hit £1.39.

Ian Cukrowski, who owns the independent MacBeans coffee store on Aberdeen’s Little Belmont Street, said customers can expect to see the cost of coffee rise in the coming months.

“The prices just keep going up and up and up,” he said.

“The main reason is the markets – all the speculators and money men are putting their cash into soft commodities. More people are buying the drink in producing countries as well, which has resulted in there being less to export. Shipping costs have also gone up because of fuel prices and weather has hit production in some areas.

“We put our prices up 10% last month – but costs have risen another 10% since then. We have coffee to see us through the next couple of months, but down the line I do not what will happen.”

Mr Cukrowski said another problem companies are encountering is that because coffee is bought a year in advance, farmers in producing countries are ripping up contracts because they are unhappy at the price they agreed last year.

He added: “Nobody knows when this is going to peak. The last time the prices reached this level was in 1977 when there was a massive frost in Brazil, which wiped out something like half the coffee that year.”

High Street coffee chain Starbucks put prices up in September last year, when chief executive Howard Schultz said it could no longer absorb the increased costs.

“We have thus far chosen to absorb the price increases ourselves and not pass them on to our customers,” Mr Schultz said, “but the extreme nature of the cost increases has made it untenable for us to continue to do so.”