Starbucks stock has taken a hit as the price of Arabica coffee beans reaches an all-time high, putting pressure on the company’s profits. Arabica beans, the main ingredient in Starbucks’ coffee offerings, have surged past $4 per pound, a significant increase from last year’s prices.
Currently trading at around $33.98 per pound, Arabica coffee has doubled in price over the past 12 months, driven by concerns about global coffee bean supply shortages. This price spike is linked to the impact of ongoing droughts in Brazil, the world’s largest producer of Arabica beans, and severe weather conditions in Vietnam, which have damaged the coffee crops.
The shortage has led Brazilian farmers to sell off a large portion of their Arabica crop, raising fears about future availability for export. As a result, the increased cost of beans is being passed on to consumers, with coffee drinkers paying higher prices at Starbucks and other retailers like Tim Hortons.
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