Why are we paying $50 for instant coffee?
Tightening global supply, market volatility and a weaker NZ dollar are being blamed for soaring coffee prices.
Coffee lovers are facing sticker shock as instant coffee prices soar past $50 for a jar. New World is currently advertising Moccona classic medium roast at $53.99 for a 400g jar. Woolworths attributes the price hike to a combination of factors including restricted global supply, market volatility, and a weaker New Zealand dollar.
Westpac economist Satish Ranchhod attributes the high global coffee prices to poor weather conditions in key producing regions like Vietnam and Brazil. These production cost pressures have been exacerbated by recent increases in global fuel costs. Chief economist Mike Jones from BNZ admits he was caught off guard by the price when he went to purchase more instant coffee recently.
The global coffee price trend has been volatile but has roughly doubled over the past four years. While the full impact on New Zealand has not been realized yet, the low New Zealand dollar over the early part of the year likely did not help, as it raises the cost of imports. According to Stats NZ data, the average price of 100g of instant coffee has risen from $6.25 in July 2019 to $8.02 in July 2023, dropping as low as $5.40 in late 2020.
Reddit users have expressed shock at the expense of Moccona coffee. One commentator noted that paying nearly $50 for a jar of coffee is equivalent to 1/17th of their weekly pay, likening it to spending a significant portion of their income just for a couple of days' worth of food.
Written by urgent.news from RNZ Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
