Exclusive | Crisis brews as global drought set to send NYCs coffee prices soaring

A coffee crisis is brewing.The cost of New Yorkers’ morning java is about to get even more expensive – by up to $1 – as a prolonged drought in Brazil, which produces nearly half the world’s Arabica beans, sends shockwaves around the world. “It’s a nightmare,” said Peter Longo, whose family has owned New York’s Porto Rico Importing Co.

for three generations. Earlier this month, Arabica futures – which coffee roasters like Longo have to buy to get their supply – reached a historic high of $4 per pound on commodity markets, double the $2 price just a year ago.A severe drought has been ravaging vast areas of South America since 2023.The lack of rain has destroyed coffee crops and eroded global stockpiles. Two weeks ago, Longo raised the price of his bulk coffee beans from $15.99 to $16.99 a pound in response to the global shortage.

On Monday, the price at his coffee bar is going up, by somewhere between 5-10% depending on the beverage.A medium latte or cappuccino will go from $4.90 to $5.20.Other coffee shops in the city are faced with the same dilemma, after already marking up prices to deal with raging inflation over the last three years.“It’s disturbing,” said Teodora Tomic, co-owner of Vibrant coffee in the West Village.

“We don’t want to change the prices.”Tomic conceded the shop might have to raise prices by $1 but said they will wait until the spring or summer to see what happens with the cost of coffee beans.“It’s hard to compete with bigger businesses because they have secured their prices for the whole year,” said co-owner Stefan Tomic. Big companies hedge their bets by buying coffee contracts for multiple years on commodity markets.Starbucks said it would hit the pause button on price hikes at least through the fiscal year, though that ends in September.According to a coffee analyst, no brew business will escape 2025 unscathed.“A lot of these high prices haven’t hit the supply chain yet,” said independent co...