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.

Is your cappuccino or flat white fix at risk from a new price hike?

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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