Coffee shops are being hit hard by poor harvests in Brazil just as they have begun to feel the benefits of workers returning to the office.
Arabica beans, which are known for their smooth taste and favoured by companies including Starbucks and Pret a Manger, reached as high as $2.39 per pound on Friday, the highest level since the food crisis in 2012.
Analysts have warned that higher supply costs could filter down to the customer with the cost of caffeinated drinks likely to rise this winter.
“The weather-related impacts, together with coffee shops reopening and demand back to pre-covid levels in many consuming countries has moved coffee prices upwards,” said Paul Rooke, the executive director of the British Coffee Association.
“Whilst price risk management is part of all commodity sectors it is inevitable that prolonged prices movements will result in some of that being fed through to the final consumer,” he added, suggesting that higher commodity prices could enable coffee producers to invest back into their businesses.
In comments to The Telegraph Charles Sargeant, a commodity broker at Britannia Global Markets said “the higher prices are not going away [and] that will translate into higher consumer prices.”
The alternative option for coffee shops will be to turn to harsher tasting Robusta coffee beans which contain more caffein than Arabica beans and have a bitter flavour.
The crisis is being driven by a poor harvest in Brazil, the world’s main supplier of Arabica, where frosts have followed droughts to wreak havoc on the crops.