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Will we see the morning take-away coffee break through the $4 barrier?

It’s not often that financial news sends shivers down the collective generation Y spine. As renters, a diving property market or rising interest rates mean little. Foreign currency exchange rates are only of interest while we’re backpacking, clumsily converting rupees to euros and back to dollars depending upon the route we’ve taken.

When it comes to finance, the jargon is just plain confusing. Aren’t hedges quaint borders for gardens? As for options, they’re written in chalk on the local cafe blackboard: macchiato, latte or short black.

But there was one report last week that had gen Y had bothered to read it, their wallets would have been shaking with fear: the price of coffee is at a 12-year high.

Holy flat white!

The world’s second largest producer of the Arabica coffee bean, Colombia, has been hit by two consecutive years of crop damage due to heavy rains, and Arabica beans have hit a new high of $US1.667 a pound as a result.

Considering my inability to function without a morning caffeine hit, I was rather shaken by this announcement. Coffee aficionados in the Sydney suburb of St Leonards are already charged a whopping $9 for a single shot of coffee made with Kopi Luwak beans. Granted the production method is high maintenance and requires a small, Indonesian cat-like animal. The beans, reported to sell for $1500 a kilo, are collected once they have been eaten and passed through an Asian Palm Civet.

In my neighbourhood cafes, it is not unusual for a Latte to cost more than $3, and there is not so much as a kitten involved in its production.

Will we see the morning take-away coffee break the $4 barrier?

The report in the Australian Financial Review allayed my fears. Most cafes use specialty beans that are of a higher quality than the regularly traded Arabica, and customers already pay a premium above the $US1.667 a pound. Cafe-goers are safe, but coffee roaster Toby Smith says retail customers who purchase 250 gram packets of Colombian coffee from supermarkets may see a slight price rise.

Given gen Y has been handed a temporary reprieve from the effects of global financial markets, we can go back to worrying about our $100,000 HECS debts, 40-year mortgages and lack of job security passed down by previous generations.

And then you wonder why we can’t get through the morning without a decent shot of caffeine? Make mine a double.

BRW

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