A big topic of conversation in 2018 was the abysmally low coffee prices on the commodities market. The per-pound price didn’t just dip below a dollar, but stayed there, bottoming out around the 94 cent mark. The prices have since started to move in the right direction, though very slowly, and currently sit above the dollar mark at $1.04, which is still untenably low. But according to Bloomberg, the 2019 forecast is a bit brighter as coffee prices are expected to average $1.24 per pound.
The predicted price is up nine cents over last year’s average, but the reason for the increase isn’t necessarily a positive one. According to Bloomberg, the historically low prices of 2018 are likely to reduce the incentive for coffee farmers to expand their production. And with a coffee arms race brewing in China, demand is expected to increase while the supply stagnates, leading to the inflation in price.
While this not entirely modest increase is welcomed, the forecasted price is still a far cry from a sustainable level. According to research performed by the SCA, the price threshold for profitability for a coffee farmer sits around $2.50 per pound, double the projected average.
The expected price increase is nonetheless a step in the right direction, be it a baby step. It is still going to take many giant leaps for coffee prices come anywhere close to healthy levels.
Zac Cadwalader is the managing editor at Sprudge Media Network and a staff writer based in Dallas. Read more Zac Cadwalader on Sprudge.
Top image via Tanawatpontchour/Adobe Stock
The post Commodity Coffee Prices Expected To Rise In 2019 appeared first on Sprudge.
from Sprudge http://bit.ly/2C9oGPO
No comments:
Post a Comment