The price of Arabica coffee beans is expected to rise sharply during 2019. According to a Reuters poll of nine coffee experts, the price shift will likely come from the global coffee deficit which is expected to hit markets as Brazil begins a smaller year of harvesting. By the winter of 2019, experts predict the price of coffee will hit $1.25 per pound. Currently, Arabica beans are trading at around $1 per pound.
Although consumers will feel this price increase, it may inject much-needed cash into the coffee production industry. Years of record harvests have driven the price down so low that many farmers, particularly in South America, cannot turn a profit with their existing crop. The pending decrease in supply may be the boost growers need to continue operations.
“Arabica prices should find some support by the fact that 2019/20 is set to be an ‘off year’ output in Brazil,” said Capital Economics’ analyst Caroline Bain while speaking to Reuters.
Like all other industries, coffee prices are influenced by supply and demand. With the current outlook on Brazilian coffee harvests this year, experts believe the demand for coffee will exceed supplies by about “one million 60 pound bags,” according to a report from Fox Business. This is in sharp contrast to the current surplus of more than four million bags.