Coffee bean shortage driving price up

Over the past year, there have been shocks to global coffee supplies, caused primarily by inclement weather. Now, consumers are starting to feel the pinch of higher prices as coffee prices topped $3 a pound for the first time in over three decades.

CBS News reports that the uptick in price has resulted from supplies of high-grade arabica coffee falling, along with increased demand from a burgeoning middle class in China, Brazil, Indonesia and India who are increasingly craving the commodity. Moreover, the continued weakness of the dollar has boosted the prices of nearly all commodities over the past 12 months, analysts assert.

Arabica coffee hit $3.025 per pound in New York last week, representing its highest value since 1977. Supply shortages are driving prices higher; over the past seven months, coffee prices have soared, rising more than 100 percent.

The outlook on future prices shows the supply strain that's affecting the market. Inclement weather in Colombia, the second-biggest producer of arabica beans after Brazil, has caused the country's stockpiles to plummet to their lowest levels in 33 years. According to the Financial Times, global coffee inventories are currently at their lowest levels in over 50 years.