The price of Arabica coffee hit a record high of over US$4 per pound on the New York futures market. This is the first time in history that prices have surpassed this threshold. Since August 2024, green coffee bean prices have been rising sharply, driven by concerns over global supplies following disappointing harvests in major coffee-producing regions like Brazil and Vietnam.
The rising coffee prices are a global issue, affecting roasters worldwide. However, each country faces its own set of challenges. In New Zealand, the crisis comes at a time when the hospitality industry is already in a difficult position. Richard Corney, Managing Director and Co-Founder of roaster Flight Coffee, explains that several factors have combined to create a tough environment for the sector.
“New Zealand’s COVID recovery didn’t really finish until 2023. If 2022 was the hangover, 2023 was the headache,” says Corney. “Then, we had a change in government that led to major cuts in the public service, with 6,000 public servants losing their jobs and half a billion dollars being removed from the economy.”
These challenges, along with rising rents and increasing staff wages, have caused a downturn in the country’s hospitality sector. “In 2024, we saw more cafés closing than opening, and there was significant consolidation in the roaster space,” Corney adds.
As the country continues to navigate these issues, Richard believes the situation is about to worsen due to the sharp rise in coffee bean prices. Since most coffee contracts are negotiated 12 months in advance, the price hikes first observed in August 2024 will soon hit roasters and cafés, making it even more difficult for the industry to recover.
Related topics:
- Compose Coffee to Raise Prices as Global Coffee Bean Costs Soar
- Pret A Manger Price s Price Hike, Maintains £5 Coffee Subscription
- Coffee Prices Reach Record High Due to Supply Disruptions
