As world coffee prices surge, could a $10 cup be ‘on the horizon’?

Sunday, 9 February 2025

Coffee prices have reached record levels on world markets.

At the same time, the NZ dollar has been falling sharply against the US dollar.

The boss of a NZ coffee company has raised the possibility a $10 cup of coffee being “likely on the horizon”.

Coffee drinkers are being warned to brace for the arrival of a $10 cup of coffee as world prices for the commodity soar.

That indication came from Flight Coffee managing director Richard Corney, and while Mojo Coffee’s Wellington boss described the suggestion as “pushing the boundary”, he did say Mojo’s prices would be going up by an expected 10c to 30c a cup within the next month.

Mojo hadn’t put its prices up in 2024, despite increased prices, but was now having to review its pricing, Mojo Coffee’s Wellington general manager Capellino said.

Coffee prices had jumped in the past six months, and the NZ dollar had fallen against its US counterpart, he said. While Mojo had to absorb some of those costs, it also had to future-proof its business.

“Markets go up and they go down as well,” Capellino said.

“For the foreseeable future they (coffee prices) are going to stay much higher than we would like them to be. But it will come down. When, I can’t say.”

Arabica coffee futures prices breached the US$4 a pound mark for the first time in New York on Wednesday (local time) after climbing steadily for the past couple of years, and surging in recent months.

Flight Coffee’s Corney warned that the New Zealand coffee and café industry was in unchartered territory.

“Things are about to get scary,” he said in an article on the Flight Coffee website, which explained why that was happening.

Coffee prices must go up, Corney said.

“In the same way consumers pay more for petrol when oil prices are high, consumers will be paying more for their coffee, from the supermarket shelf to their favourite café.”

Prices by the cup were already arbitrarily low when compared to the relative increases in operation costs impacting hospitality in the past 10-15 years.

Back in August, Corney said the price of a cup of coffee should be more than $8, although he acknowledged that price “wasn’t something sustainable for consumers to endure outright”.

In his latest article, he said consumers must be prepared to pay more for their coffee, or change their coffee habits.

“Industry, hospitality and cafés won’t absorb these increases, lest they go under.”

Writing a few days before the US$4 a pound mark was crossed, Corney said that if that level was reached, and the NZD remained weak against the USD, “brace yourself as $10/cup is likely on the horizon”.

A Stuff staff member found the $8 mark may be creeping closer. She was charged $7.15 for a small oat flat white in Auckland on Thursday, although that did include a surcharge for the public holiday. Another café in central Auckland was charging $7.50 for the same thing, without the surcharge, she said.

In central Wellington on Friday, a quick survey of six cafés found the price of what was described as a regular or medium flat white varied between $5.20 and $6.20, although another Stuff staff member reported one café in town charging just $4.50.

Coffee traders expect crops to shrink after the world’s two largest producers, Brazil and Vietnam, were hit by bad weather and the drink’s popularity continued to grow, the BBC reported.

The Trading Economics website said soaring Arabica prices were being driven by speculative buying and persistent supply concerns.

Arabica prices had been supported by an anticipated sharp output decline in Brazil, the world's top producer, following an extended dry spell in 2024 that impacted the latest harvest.