A coffee crisis is being brewed.
New Yorker morning Java costs, a long-term drought in Brazil, which produces almost half of the world's Arabica beans, sends shockwaves around the world.
“It's a nightmare,” said Peter Longo, whose family owns Portolico Import, New York, for three generations.
Earlier this month, Arabica futures that coffee roasters like Longo need to buy to get supplies hit a historic high of $4 per pound on the commodity market, doubling the price of $2 just a year ago.
Since 2023, severe droughts have been destroying vast areas of South America. Lack of rain has destroyed coffee crops and eroded global stockpiles.
Two weeks ago, Longo raised the price of bulk coffee beans from $15.99 to $14.99 in response to the global shortage. On Monday, his coffee bar prices have risen between 5-10%, depending on the drink. A medium latte or cappuccino can range from $4.90 to $5.20.
Other coffee shops in the city are facing the same dilemma after already marking prices to deal with the heavy inflation over the past three years.
“It's getting in the way,” said Teodora Tomic, co-owner of Vibrant Coffee in West Village. “I don't want to change the price.”
Tomic admitted that the shop might need to raise prices by a dollar, but said they'll wait until spring or summer to see what happens at the cost of coffee beans.
“They've been keeping prices all year round, so it's hard to compete with big companies,” said co-owner Stefan Tomic.
Large companies hedge bets by purchasing coffee contracts over multiple years in the commodity market. Starbucks said it would press the pause button to raise prices until at least the fiscal year, but that will end in September.
Coffee analysts say the brewing business will not escape unharmed in 2025.
“Many of these high prices have not yet hit the supply chain,” says independent coffee consultant Stephen Colten. “Roasters need to increase their prices.”
Kolten said New York retail coffee prices could rise 10-25% in the coming months.
At trendy coffee shops like Blue Bottles, medium lattes are currently selling for $7.25 without add-ons. This means hiking from 72 cents to $1.60, up to $8.85.
And New Yorkers are becoming more uneasy.
“It's so expensive!” cried Anna Rudnitska in a coffee run for her colleague.
“I think it's crazy. Starbucks' Sam Singerman said:
“It's very difficult to get good coffee at a low price. It feels like it's becoming a designer coffee,” another customer said.
