You can stop rubbing your eyes. The price of that steaming cup of coffee that gets you from your bed to the office has gone up!
But it’s not time to click send on that abusive email to Juan Valdez. Instead, curse the weather and the world’s growing love for caffeine.
“The demand for coffee has grown and the supply is not growing nearly as quickly,” explained Sandy McAlpine, president of the Coffee Association of Canada. “They had been close to balanced, but now the squeeze is getting tight.”
There are two main types of coffee in the world: Arabica, with its aromatic flavours, and Robusta, its hardier, less tasty cousin.
High-end coffees are typically made from 100 per cent Arabica beans; instant coffees and the cheapest drip tar you buy at the gas station is made entirely from Robusta. In the middle are a number of blends where the two types of beans are mixed.
But it doesn’t matter what you drink. The cost of the green beans – the seeds the world’s roasters toast to make your favourite grind – are on the rise for both types.
While the number of people clawing at their cupboards for coffee in the morning continues to grow in North America and Europe, a sharp increase in demand for caffeine has emerged in Brazil, Russia, India and China, areas that traditionally steered clear of the beverage, explained McAlpine to the Star.
Not only do these caffeine-hungry nations squeeze international supply with their large populations, but one of them is also the world’s largest coffee supplier.
Brazil produces 47 million sacks of Arabica and Robusta beans a year, 35 per cent of the world’s total production. But the recent surge in the nation’s coffee drinkers now sees them downing nearly half of their own supply.
Three years of bad weather and recent floods have also devastated areas of Colombia’s Arabica coffee crops.
“Colombia is the third-largest coffee producer in the world,” said McAlpine. “It is a treasured source for coffee in Europe and North America. The failure of their crops has only magnified the squeeze. If they have another shortfall, there would be a huge jump in the worldwide shortfall, again.”
The loss in Colombian coffee production hits Canada particularly hard. Turns out our love for the gourmet bean has made us the largest buyers per capita of high-end coffee in the world, said McAlpine, with high-end Colombian beans being one of our main sources for import.
So, let’s just grow some more coffee. That’s not so easy, says McAlpine. Coffee crops take three to four years to grow and are not the safest bet for farmers in a constantly fluctuating market.
“Coffee prices were so low 10 years ago there was a disincentive for people to grow coffee, so people considered other agricultural products,” plowing over their coffee plantations to grow crops for which there was a greater local and global demand, said McAlpine.
The result? With a limited stock, roasters are shelling out more for beans from the coffee-producing areas of Latin America, Africa and South East Asia.
A few years ago coffee commodity prices were at $1.20 to $1.40 per pound. They jumped to $2.60 to 2.80 per pound this year.
Arabica bean futures doubled in price by early March as compared to June 2010, when prices started to rise.
And this rise in trading prices is spilling over into Canadian consumers’ coffee cups.
Second Cup recently increased the cost of their coffee by 3 per cent, the company said in an email to the Star.
Tim Hortons prices will rise on Monday, April 11, with a large cup of coffee costing 7 cents more, a representative told the Star.
Prices for coffees sold on supermarket shelves have also increased.
Kraft’s Maxwell House and Nabob Roast and Ground, and Maxwell House Soluble coffees cost 6 to 9 per cent more as of March 20.
Nescafé told the Star in an email that the price of their products will increase this year.
Does this mean coffee drinking could become a costly habit, even for those of us avoiding vanilla soy lattes?
“The underlying trends are going to support higher prices than we experienced at the beginning of the decade and the middle of the decade,” says McAlpine, “but I couldn’t predict six months from now if we are going to be at a higher or lower base.”
Best to bring an extra dime to stay on the safe side.
Glad I drink tea…lol