Australians could soon be paying as much as $12 for a coffee as international demand puts pressure on supply and drives up prices, an expert has warned.
Standard international prices for coffee beans hit an all-time high in the first half of 2025, reaching nearly triple the cost of beans in 2020.
Essential Coffee chief executive Todd Hiscock said the soaring cost has been driven by fierce international competition for limited stock
‘The Chinese have very much converted from tea to coffee,’ he told the ABC.
‘They’re buying up unprecedented levels of coffee supplies, often they’re taking a whole Brazilian stock load in ways that’s never been seen before.’
Mr Hiscock warned national median prices per cup would have to increase to around $8 to $12 to compete.
‘We’ve got to come to the party and pay in a competitive global market,’ he said.
It comes as major suppliers have reduced bean yields available to the global market.
A cup of coffee could cost as much as $12 in the near future, an industry insider has claimed (above, a barista in Sydney)
Brazil, which accounts for a third of the world’s coffee supply, has faced years of drought, followed by a damaging cold snap.
The extreme weather conditions have sharply cut harvests across key growing regions.
Adding to the pressure, the Brazilian real has strengthened significantly – partly driven by widespread divestment from the United States.
The world’s second-largest coffee producer, Vietnam, has also faced disruptions to its ability to produce coffee.
An El Niño weather pattern left Vietnamese coffee regions in drought over the past two years.
Experts believed the damage to have been so extensive crops will not recover for another two years.
Such disruptions to the supply chain, as well as general inflation in Australia, have left just razor-thin margins for local cafés.
Essential Coffee, a major Australian supplier of coffee machines and beans, has seen their wage bill rise by nine per cent in the past two years.
Once plush coffee plantations in Brazil (above) have been decimated by adverse climatic conditions in recent years
Australia has grown its reputation in the coffee world, but hiked prices could threaten its popularity
That has been accompanied by a 29 per cent rise in rent and six per cent increase in insurance costs.
Mr Hiscock said the wholesale price of coffee had also risen 119 per cent since November 2023.
‘It’s hard because people are very sensitive to their beloved coffee and when you move the price up, you find not just a lot of negative reaction, you find some very terse expletives,’ he said.
Australia’s robust coffee culture, particularly in capital cities, stems from post-war immigration flows. Italians and western Europeans brought their appreciation for the drink, and technologies to Australia when they arrived.
Since then, Australia has grasped the culture, with more than 75 per cent of Australians believed to be daily coffee drinkers, according to data from McCrindle.
Australian brews have become internationally recognised and Australian cafés and baristas have taken out numerous international awards – including Toby’s Estate Coffee Roasters in Sydney which won the title of the ‘Best Coffee Shop in the world’ at the 100 Best Coffee Shops Gala in Madrid.
Online, however, some Australians have reacted to projected price hikes by saying they would give up the habit before paying $10 for a brew.
‘Never paying more than $6 for a coffee. if i had to have a coffee while i’m out, it will be a gas station coffee or i will bring my own mini-thermos,’ one wrote.
‘Well I guess I will just have to go without it!’ another said.
