Coffee enthusiasts can expect to pay a slightly lower rate for their favourite cup of java as retail prices of coffee beans are expected to stabilize in 2023.
The price of coffee has been rising since the beginning of 2021, reaching a seven-year high last July at $7.57 for a pound of roasted coffee and about $15.85 for a pound of instant coffee.
But coffee futures, which are exchange-traded contracts on the Intercontinental Exchange (ICE), have dropped 35 per cent since February, according to Sylvain Charlebois, a professor in food distribution and policy at Dalhousie University.
"Coffee futures are down, which typically would indicate that in months to come, prices will stabilize or even drop a little bit," he told CTVNews.ca on Monday.
"There seems to be a quite strong correlation between retail prices and coffee futures in Canada. Over time, you'd typically see a plateau."
While coffee prices have been consistently rising since 2021, there are slowly starting to trend down. It cost $8.60 for a pound of roasted coffee in August, and $8.38 for a pound in September.
Charlebois says that low demand triggered by an economic slowdown is likely why prices have dropped, paired with an unpredicted
to reach 68.5 million 60-kilogram bags, as the agricultural powerhouse sees a recovery in its plantations after a smaller-than-expected crop this year, according to Reuters.
The upbeat estimate comes amid heavy rainfall that has soaked coffee crops in Brazil's primary producing regions. The healthy turn in nature comes after the worst cold snap since 1994 in Brazil last year, which sent the price of raw green coffee beans to the highest level in almost seven years, raising prices for roasted beans and ground coffee in grocery stores.
Demand for coffee in Canada though is almost inelastic, according to Charlebois.
"In Canada, we're addicted to coffee. In other words, doesn't matter what price it is people will keep on buying it," he said.
"They won't necessarily notice a price increase even with this year's increase. People just kept on buying."
With files from Reuters
