The price of coffee beans hit a 7-year high on Friday amid ongoing logistical issues and global supply concerns.
Arabica coffee bean futures slated for March delivery rose as high as 4.8% to $2.235 a pound on Friday, Bloomberg reported. Prices are up more than 90% over the last year and have reached their highest level since Oct. 2014.
Bloomberg noted the price surge could result in higher costs over time for U.S. firms such as Starbucks and Peet’s Coffee and Tea.
INFLATION WILL LIKELY GET WORSE BEFORE IT STARTS IMPROVING, GOLDMAN WARNS
The price surge occurs as Brazil, a top coffee producer, contends with an ongoing drought and the aftermath of a cold snap that destroyed some crops. Meanwhile, excessive rainfall has impacted harvests in Colombia, another leading supplier. Ongoing supply chain issues have complicated the shipping process and led to higher costs.
Coffee dealers told Reuters the spike in prices is also attributable to higher demand and falling stockpiles of arabica beans. The high cost of fertilizer and ongoing labor shortages are other factors.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The cost of everyday products and commodities such as coffee and gas has surged in recent months as the global economy recovers from the COVID-19 pandemic. The consumer price index rose 6.2% year-over-year in October, marking the largest increase in more than 30 years.