The futures price of coffee beans has gone up! Can ordinary people still afford Starbucks coffee?

At present, coffee has become a kind of drink with rigid demand in many parts of the world. But years of global supply shortages and recent dry weather in Brazil and Vietnam have pushed the prices of both Roberta and Arabica coffee beans to 18-month highs. While many people worry that they may not be able to afford coffee in the future, there are also many people who speculate on the raw materials of coffee beans with the mentality of gambling.

Although many people are worried that the commodity futures market, which has been frantically speculated, may perform in the style of "flat sand and falling geese" at any time, in view of the fact that supply from Brazil continues to be affected by catastrophic weather, coupled with the continuous entry of speculators into the market, most analysts believe that the value of coffee beans will remain high.

A study from the United States Department of Agriculture shows that for every 10 cents increase in the price of raw coffee beans, the cost of processed coffee manufacturers and end-point retailers like Starbucks will increase by 2 cents. However, many analysts have pointed out that manufacturers and suppliers can hedge the risk of rising coffee bean prices by using relevant financial swaps, and pass the pressure of rising costs on to consumers.

The futures price of coffee beans has gone up! Can ordinary people still afford Starbucks coffee? ? imageView&thumbnail=550x0

The price of coffee futures on the London International Financial Futures Exchange has risen 21% so far this year due to continuing tight supply. A team of analysts at Societe Generale predicts that coffee prices still have about 30% room to rise by the end of next year. The futures price of Roberta coffee beans on the Intercontinental Exchange has risen 23% since the beginning of the year. The December futures contract for these commodities changed hands at close to $1.5495 a pound on Thursday.

Ms. Caroline Bain, an analyst at Capital Economics, said the coffee bean market is expected to remain in short supply over the next two quarters. The USDA also forecasts that the global supply of coffee beans will be at its lowest level in five years in 2016-17.

According to the USDA, American coffee producers mainly import raw coffee beans from Brazil and Vietnam, as well as Indonesia, Colombia and Guatemala. Arabica beans, despite their higher cost, are more generally more popular, while Robesda beans are mainly used to make the base of Italian espresso. At present, most of the coffee sold in American supermarkets is a mixture of the above two kinds of coffee beans.

However, in recent years, major coffee farms such as Brazil, Vietnam and Indonesia have suffered severe droughts due to abnormal weather such as El Ni ñ o. Without Rain Water's nourishment, the output of raw coffee beans is nearly halved.

Jason Rotman, a director of a consultancy, believes that with the formal ouster of former Brazilian President Dilma Rousseff, the political situation is clear and the weather continues to dry, which is conducive to the continued rise in coffee prices. However, considering that coffee production and sales companies in the United States often have rich experience in agricultural financial hedging, there is no need to put upward pressure on downstream business partners and end-consumer experts.

The current inventory of coffee beans in the United States also seems to support this view. By the end of July, the total inventory of raw coffee beans in the United States, including Arabica beans and Roberta beans, had reached its highest level since 2003, according to the New York-based raw coffee bean association.

Although strictly speaking, the cultivation, production, processing and sale of coffee is not a pillar industry, but to some extent, it can also reveal the growth prospects of the global economy. Ms Bain of Capital Macro predicts that demand for coffee will pick up again as both developed and emerging economies begin to recover from 2017-2018. In the longer term, people in developing countries will further support the demand of the coffee market from being generally used to drinking tea to more and more people falling in love with coffee.

The rise in coffee futures prices has spurred speculative enthusiasm to some extent, but Ms Bain still believes that if Brazil recovers in 2017-18, the price of locally produced Arabica beans will fall. The agency expects the price of Arabica buckles to be about $1.50 per pound by the end of the year, down from the current level of $1.52 per pound. But Ms Bain does not rule out the possibility that the price of Arabica beans will soar to $1.60 a pound by the end of next year once demand for coffee beans grows.

Rotman pointed out that once the price of coffee beans falls below the $1.50 per pound level again, a large number of buyers will sweep the goods on the bargain.

To sum up, even if the price of coffee beans continues to rise, the manufacturers in the industry will be able to smoothly relate to the cost, which will do no harm to the general public's interest in drinking coffee.