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The cost of a cup of coffee is likely to start creeping up. Bloomberg reports that Arabica futures, an industry-wide bean price benchmark, are trading at the highest levels in 18 months.
The price of a standard contract — a 100-piece lot of 60-kilogram bags — topped $300 on Tuesday before settling slightly lower. The commodity is up nearly 28% for the year and 56% compared to a year ago.
Like with cocoa, coffee harvests are shrinking because of climate change. The Wall Street Journal reported earlier this year that soaring global temperatures and fluctuating rainfall patterns are making it harder for traditional exporting nations like Vietnam, Indonesia, and Brazil to maintain harvest levels.
Plus, more people are drinking coffee than ever. German broadcaster DW notes that even traditional tea-drinking strongholds around the world have gotten hipper to drinking a nice latte.
Plus, a recent working paper from the National Bureau of Economic Research suggests that the introduction of a Starbucks location to neighborhoods without a coffee shop increased the number of startups it produces by as much as 12% a year. But as the planet gets hotter, those habits might be a harder to sustain.