Wholesale bean prices are buzzing at 13-year highs after consecutive poor seasons across the globe, a spike in demand for coffee in Asian countries like China and a weaker US dollar.
Agricultural markets research last week showed that Arabica coffee - a bean used in most espresso coffee outlets in Australia - had reached prices not seen since the 1970s, while some of the world's top roasters have hiked prices by more than 20 per cent this month.
The cost jolt will be felt by caffeine fans, particularly in Sydney and Melbourne where a takeaway coffee is priced below the national "best dine-in price" of $3.30 a cup.
The price per cup in cafes is expected to rise between 10 to 50 cents across the nation within three months.
The cost of raw beans is just one factor driving daily coffee into the luxury basket, according to Gilkatho Coffee managing director Wayne Fowler.
"The cafe market operators are experiencing increased costs across many areas of their business. The headline price rises of Arabica coffee beans is a contributing factor but other rising costs include shop rents, staff wages, electricity and the general cost of business, " Mr Fowler said.
However he says coffee shop operators should tread carefully with hikes.
"Coffee is a price sensitive, it can't go up too dramatically or people will drink something else," Mr Fowler says.
He also points out that that coffee drinkers would be unprepared for the rise.
"Our research has shown that on a national average basis, the selling price of a cappuccino has risen by 2.5 per cent in the last year. We have seen green bean prices increase dramatically over the same period. It is important to remember that coffee actually makes up a small proportion of the selling price of a cup of coffee."
If the wholesale cost of beans doubles it will only add 25 cent to the average cup of coffee, he says.
The Coffee Club which has more than 273 shops in Australia, New Zealand and Asia says any price rises in its outlets are likely to be moderate.
"Just because wholesale coffee bean prices have gone up doesn't mean that the price of a cup of coffee will go up 50 cents a cup," a Coffee Club spokesman said.
Meanwhile, Perth has the most expensive coffee in the country, a new survey has found, with cafes charging $3.70 on average for their cheapest brew.
Sydneysiders pay the least for their daily fix ($3.11), followed by Melbourne where cafes charge $3.15 and $3.30 in Adelaide, the Gilkatho Cappuccino Price Index shows.
Gilkatho surveyed more than 1000 cafes across Australia.
(Source: http://www.news.com.au/money/coffee-price-hike-sours-brew/story-e6frfmci-1226025395458)
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