Global coffee prices have plummeted – but you don't notice it

The global market for coffee has knocked commodity prices all the way down. But several years of very low raw material prices have not yet propagated to the price Danes pay for their coffee.

The black drops are difficult to avoid at a time when the coffee shops lie and rub shoulders in the streets of Copenhagen. In most other major cities, café latte, cortado, and americano have become everyday jargon. At the same time, gas stations and 24-hour kiosks are investing in becoming part of the coffee-drinking Danes' lifestyle and setting up special coffee areas, while more and more advanced coffee machines of all sizes are finding their way into private homes.

But while coffee has never been in such high demand among consumers, the global commodity price of coffee continues to plunge. On the stock exchange in New York, the price of a pound (0.45 kilo) of Arabica coffee beans has been around one dollar for the past year. From a historical perspective, this is a low level and a significant drop from when the price peaked in 2011 at three dollars per pound of coffee – almost five years ago the price was over two dollars.

However, the low prices on the global commodity market have not spread to either the shop shelves or the cafes.

"In the consumer segment, which is the price that meets you and me, there is no question that prices have fallen at all. It is connected to the fact that the demand is still so great,' says Helge Pedersen, chief economist at Nordea.