Time to switch to tea? Coffee prices expected to soar thanks to demand, world harvest

This will keep coffee drinkers up at night.

A combination of rising world demand and poor harvests in Colombia, Brazil and Latin America has caused a shortage of high-end Arabica coffee beans - and that's likely to jack up the cost of the brew.

Arabica coffee prices have risen more than 46% over the past six months to a 34-year high, the London-based International Coffee Organization reported.

"Colombian production is slowly recovering from the low levels of the three preceding crop years," the group said.

But the nine million 132-pound bags of beans that Colombia is expected to harvest this year is still a far cry from the 12.5 million bags that were produced three years ago.

As a result, the price of well known coffee brands like Maxwell House and Folgers have gone up by 25% since last year.

And that helps explain why that Grande Caffe Mocha at Starbucks has gotten more expensive, too.

Right now, Arabica is selling for about $2.97 a pound.

Coffee traders expect prices to soar past $3.40 a pound - and force roasters to raise retail prices again.

(Source: http://www.nydailynews.com/news/national/2011/03/10/2011-03-10_time_to_switch_to_tea_coffee_prices_expected_to_soar_thanks_to_demand_world_harv.html)