Coffee Prices in Australia – Rising Costs and Market Pressures

At various times of the year, as new season coffees are negotiated by exporters and importers, the market loses stability. This reflects the constant tension between strong demand and moderate supply inventories.

Predicting the future price of coffee is difficult, but one trend is clear: prices are rising as consumers expect improved quality.

Coffee Value Chain – Quality vs Cost

The coffee value chain is never predictable.
Pressure to improve both quality and value is constant.
In Australia, coffee stopped being a cost‑based game years ago.
Sourcing the cheapest beans became a race to the bottom with no real winners.
Today’s market balances commodity coffee for price‑conscious buyers with specialty coffee for quality‑focused consumers.

Beyond Raw Coffee Prices – Rising Business Costs

Traditionally, coffee companies focused on raw coffee price changes. But in today’s market, other costs are rising faster:

Real estate: property bubbles and falling yields drive rents higher.
Energy: gas shortages along Australia’s East Coast have pushed prices 200–300% above overseas equivalents.
Labour: wages and compliance costs continue to climb.
Logistics: congestion, toll roads, and heavy vehicle taxes increase freight costs.

With 99.7% of coffee roasted on gas systems, energy price spikes have direct implications for roasters.

Logistics and Freight Challenges

Melbourne and Sydney face intensive road congestion.
Toll roads and cartage costs add pressure to margins.
Truck drivers actively seek routes to avoid excessive tolls.
Logistics inefficiencies compound the rising costs of coffee production and distribution.

Impact on the Coffee Industry

For the first time in a decade, business costs in the Australian coffee industry are rising faster than raw material volatility or exchange rate shifts.

Margins are being squeezed by real estate, energy, and freight.
The impact is not fully visible yet, but signs point to retail coffee price deflation in the coming years.
Businesses must adapt by optimizing quality and value while managing costs astutely.

Final Thoughts

Australia’s coffee industry faces unprecedented challenges. Rising costs in energy, logistics, and real estate are reshaping the market more than raw coffee price volatility.

For roasters and retailers, the path forward is clear: focus on quality, efficiency, and customer value to survive in a market where margins are under pressure.