Coffee Rust Fungus Expected to Cause Coffee Prices to Spike

Posted on May 19, 2014

A fungus, called coffee rust, is expected to cause coffee prices to spike. Reuters says the coffee rust is a yellow and orange-colored fungus. It has already caused $1 billion in damage to coffee plants across Latin America and the Caribbean. CBS News reports that this is the worst fungus outbreak ever recorded in Central American coffee farms. It is already causing problems for suppliers by reducing coffee supplies and by reducing the quality of the coffee they receive.

CBS News shows a chart that shows the market price of coffee has climbed from $1.16 on January 2nd to $1.85 on May 16th, an increase of 60%. This appears to be a chart showing the average price for a tall brewed coffee. Time reports that major U.S. coffee companies have been able to get enough supply to avoid new price increases, but smaller companies have already started raising prices. Prices of specific blends could go higher if the coffee plants they are sourced from are hit hard by the fungus. More significant price increases may be on the way if growers cannot find a way to defeat the coffee rust fungus and the major companies start having supply issues as well. Take a look: