Coffee cost set to riseThe price of coffee beans hits seven year high

23 August 2006

 

A cup of expresso.

The price of a cup of coffee could be about to rise after bean prices soared to their highest point in seven years.

The price of robusta beans - used to make instant coffee - has risen by about 50 per cent in the past year due to dwindling global supplies and lower exports from Vietnam.

Vietnam is the world's biggest supplier of robusta coffee, but heavy rain has disrupted production. There's also concern that rain and pest damage to crops in India will hit next year’s production.

Brazilian drought

There's also been an increase in the cost of arabica coffee due to a drought in Brazil; price rises could lead to more expensive coffee in supermarkets and coffee shops.

But the International Coffee Organisation (ICO)  said any price increase was likely to be small as the raw material accounted for only 20 per cent of the price of coffee in supermarkets and around 5 per cent in coffee shops.