Cost of morning coffee to rise as price of beans hits 34-year high
HARD-pressed consumers could soon be paying up to 40pc more for their morning coffee as global prices for coffee beans hover at 34-year highs, Java Republic boss David McKernan has warned.
"Prices are heading towards historic highs, there's no way companies can continue to absorb the rises," the coffee boss said, adding that sugar and paper prices were also on the up.
Futures for Arabic coffee rose to 34-year highs yesterday, as poor weather dragged down supply while soaring demand from countries such as China upped the pressure on pricing.
Hedge funds and speculators bailing into "safe" assets like commodities have also been blamed for the latest surge in coffee prices.
The surge means the price of a cup of coffee on the high street is likely to go up by "35 to 40pc" by the end of June, according to Mr McKernan.
"Most people will have done some level of forward buying so it will take a while for the increases to flow through," he said. "But the bad news is coffee prices could stay at these levels for two or three years."
"The fear in Ireland is that it [the higher prices] will have a huge effect on demand," Mr McKernan added, pointing to the pressures people's incomes were already under.
Starbucks has reduced its Irish footprint, while other coffee chains have been reducing prices and investing in special offers to keep sales up.