Listen to this article now
Supply chain issues coupled with the highest inflation in decades is proving to be a source of anxiety and upset for many Americans. If $50 Thanksgiving turkeys aren’t bad enough, there’s soon to be a significant price hike in a commodity that many enjoy every day, all year long: Coffee. According to Fortune, “Arabica coffee futures on the Intercontinental Exchange (ICE) spiked to $236.95 [this morning], the highest price since Nov. 1, 2011.”
CNN reports global warming and extreme weather has affected supply at the source, and the limited product is driving prices to new heights. Brazil is facing extreme droughts, which Reuters projects could be the worst the Amazon’s seen in over 90 years. (Brazil is reported to supply almost half the world’s coffee exports.) If this weren’t bad enough, lack of shipping containers complicates the transportation process.
These supply issues are glaring, simply because the demand for coffee remains relatively constant. Coffee drinkers have more or less maintained their purchasing habits throughout the pandemic, where so many other consumer products have been deemed altogether nonessential.
As cities reopen globally, a cup of joe (or a few) only looks more attractive to workaholics getting back to their daily grind. Starbucks famously reported a record $7.5 billion net revenue for this year. (Their prices are already up nearly 5% over 2020 and this profit reflects that, in part.)
Demand continues to climb for a product that is less and less available, and consumers are having to shell out the dough for any sense of normalcy in a time of constant instability.
What do you think of the coffee inflation? Let us know down in the comments.
This article originally published on GREY Journal.