Coffee price-rise brewing predicts expert

AUT University retail and marketing lecturer Helene Wilkinson

An expert says that although local coffee retailers have buffered themselves against a 20 per cent increase in international coffee bean prices, they will use the news to raise prices anyway in order to compensate for rises in the price of milk as well as other factors.

International coffee bean prices have risen in the past two weeks on speculation that drought in Brazil – the world’s leading supplier of Arabica beans – could lead to a shortage in high quality beans.

AUT University retail and marketing lecturer Helene Wilkinson says, “Local suppliers will likely have locked in rates some time ago and the exchange rate has been incredibly good for us (and therefore New Zealand coffee suppliers) thus providing a buffer against the price rise.

“However I do suspect that a few retailers will be moving their prices shortly anyway due in main part to price rises in milk/dairy as well as general increases in wage costs, utility costs and food supply costs which have continued over the past 12 months. The market will probably perceive this to be a result of the bean costs but it’s simply a coincidence.”

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