It was only a few weeks ago that LVO wrote an excellent piece decomposing Australia’s detonating cafepocalypse.
A critical component of the meltdown is the exploding price of coffee beans.
There is no immediate end in sight to the shortage. There is a heavy backwardation in futures but no return to reasonable prices for years.
Coffee shortages tend to last on average for roughly two years.
In better news, speculators are very long, so a sharp change in price is possible.
It hangs on the weather. Goldman.
Coffee was also one of the best performing commodities this year (+78%). Climate change-induced weather anomalies, including droughts and unseasonal frosts in key Coffee-producing regions like Brazil, disrupted Coffee bean production through 2024.
There is now speculation that your morning coffee will cost more than your entire breakfast.
Coffee drinkers could be rethinking the habit after learning their morning brew could cost as much as $10 by the end of the year.
Australian Restaurant and Cafe Association chief executive Wes Lambered warned the cost of a coffee “could reach double digits” in some capital cities due to the high price of beans.
“It isn’t unfathomable … in some CBD locations and airports,” he said.
Other news today shows that the cafepocalypse is in full swing and still mushrooming.
Cost pressures from higher wages, energy bills, food inflation and increases in alcohol excise, coupled with penny pinching consumers, have hurt hospitality businesses, with many closing their doors across the country.
Figures from ASIC show insolvencies in the sector have increased by 70.2 per cent to 1312, compared to 771 in the same period a year ago, while other services soared 70.1 per cent to 808 and retail trade rose 14.2 per cent.
The raw data from ASIC tells the tale. Cafes and builders are getting smashed.
Remember, these are only those businesses that have external administrator appointments. I’d be willing to bet that most cafes go under without making a sound with regards to ASIC.
It appears the cafepocalypse has only just started.
