Coffee prices set to soar?

Global coffee prices are set to increase following a disastrous fungal outbreak in Central America. It's estimated that the fungus, known as la roya, or leaf rust, has destroyed around 20% of the high quality arabica crop in the region.

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Bean counting

Yes, because many retailers - including Starbucks - use Central America's arabica beans in their espressos and other coffee products. For countries like Guatemala and Honduras it's seriously bad news as so much of their economies are dependent on coffee.

Brazil is an alternative source for high quality arabica beans, but they're in short supply too from rising middle class local demand. "The global supply of the best quality arabica beans is hugely dependent on Brazil," global drinks analyst Jonny Forsyth, of Mintel, told the Mirror.

Cheap shot?

"And by reducing supply at a time of huge – and still rising – global demand, this could force a sharp rise in global coffee-bean prices." The International Coffee Organisation estimates around $500m worth of coffee has been hit.

Coffee drinking, globally, is climbing, despite stagnant growth in recession-hit Europe. A distinct robusta (lower quality) and arabica (high quality) divide remains though; companies like Nestle blend the two beans helping keep coffee prices low for emerging economies like India and China.

Large retailers like Starbucks and Costa should be able to contain some price rises, given that much of their overheads relate to store rent and staff salaries rather than the cost of product. But your average 227g average arabica bag of coffee isn't going to get much cheaper.

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Coffee prices set to soar?

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Fans of chocolate bars such as Mars are also sure to have consumed chocolate made from beans handled by Olam - they just don't realise it.

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However, back in 1971 there was just one Starbucks coffee shop, in Seattle, Washington.
Named after Starbuck, the first mate on the whaling ship in the novel Moby Dick, the shop originally sold roasted coffee, but did not brew coffee to sell.
Now, though, you can get everything from a blueberry muffin to a mocha frappuccino from your local Starbucks store.

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