Coffee Prices

In March, Bloomberg reported that coffee supplies in the United States hit a 6-year low. A drought in South America and rising shipping costs (not helped by the blockage that happened in the Suez Canal) are reported to be the primary reasons for this.

South Africa’s climate is largely unsuitable for growing coffee, so most coffee is imported. Have local coffee prices also increased?

Coffee sold in supermarkets generally comes in three forms: coffee beans, ground coffee and instant coffee. We’ll take a look at each of these three categories.

First, let’s look at the price of coffee beans.

Overall, the price of coffee beans has increased by 6.4% over the last year. This is fairly close to the overall South African food price inflation rate, which was reported to be 5.7% in March 2021 (the most recent figure available at the time of writing).

How about ground coffee?

The price of ground coffee has increased by 6.3% over the last year. Interestingly, prices have actually decreased since a high in November 2020.

It’s only when we look at the price of instant coffee that things get really interesting.

The price of instant coffee has increased by 6.5% over the last year. Again, this is fairly close to South African food price inflation, but it’s somewhat disturbing to see how consistently the price of instant coffee is rising from month to month. It will be interesting to see how prices change ahead of 30 October 2021, when new regulations that apply to some instant coffee products will come into effect.

Overall, South Africa seems to have been spared from dramatic price hikes so far, but prices have steadily climbed over the last year. Are prices set to rise more steeply, especially with winter around the corner? Only time will tell.

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