Has your morning cup-o-Joe gotten more expensive lately? Check your online trading platform to find out why. Coffee prices surged to a 34-year high last Tuesday, climbing over $3 a pound before meeting resistance.
Coffee prices behave in interesting ways. Whereas many commodities will respond to price jumps with shifts in demand and consumption, coffee behaves more like a narcotic. No matter how high prices go, consumers are still willing to dish out the cash to get their next fix.
As a socially acceptable addiction, the caffeine from coffee and resultant energy boost due to its consumption has become a societal norm in the business world among most countries. There will be variations between nations which prefer tea over coffee, but those which down that glass of hot java each morning have no doubt felt the pinch these past several weeks.
Recent consumer reports have noted that the price for coffee at most cafés in Europe and the United States have been raised by $0.10 to $0.30 per cup. The size of each price hike was not just associated with coffee, however. Rising sugar prices have also been passed on to consumers since sugar packets are often given as complimentary to coffee purchasers.
Look at your online trading platform, today's price for one pound of coffee is $2.75 (coffee prices are reported in US cents/lb.). Now, sugar prices have fallen significantly since touching their recent high of $0.35 a pound, so the relative price of sugar may have less impact than it did three months ago. Nevertheless, rising prices among these basic food-stuffs has caused many morning commuters to dole out additional funds for that energy-granting cup of coffee.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.