Coffee drinkers, beware! Prices are rising and rising sharply. Why? Blame Brazil. A hot, dry season for the world’s largest coffee producer is threatening this season’s crop of coffee beans. Temperatures in Brazil, which produces fully one third of the world’s coffee supply, have been the hottest on record in January. Simultaneously, the country has seen the least rainfall in two decades. That has coffee traders on edge about this year’s crop and that has sent coffee futures flying, up 9% on Tuesday. That is the biggest jump in prices in a decade. So far this year, coffee futures are already up nearly 40%. So what does that mean for your morning coffee? It won’t happen right away, but in a month or two those higher futures prices will mean higher current prices for coffee drinkers.
Yahoo Finance’s Lauren Lyster points out in today’s Hot Stock Minute that coffee prices have been on a steady decline in recent years. Last year prices plunged 23%, but that never seems to translate to prices at Dunkin Donuts (DNKN), Starbucks (SBUX) or wherever you buy your morning jolt. Funny how that works.
In our poll today, tell us just how much you would be willing to pay for a cup of coffee?
Cast your vote and post your comments below as well.