Coffee prices are falling. Will you pay less for your morning coffee?

New York ( Business) — Coffee futures are plummeting. But that doesn’t mean a real change to the price of your cup of coffee.

In August, Arabica coffee futures were trading at $2.43 per pound. This Wednesday, the price had fallen to US$ 1.59, which represents a decrease of 35%.

There are several reasons for the constant fall in prices, explains Carlos Mera, head of Rabobank’s agricultural commodity markets team.

On the one hand, the weather in Brazil is better than in the last two years. The rains this autumn suggest that the country will have a good coffee harvest, ensuring supplies.

“September is usually the start of the wet season,” Mera explained. “The start of this wet season has been really very good.”

It also has to do with the strength of the US dollar.

“When the dollar goes up, everything that is measured in dollars, like international coffee prices, tends to go down,” Mera said. Farmers outside of the US are incentivized to sell their produce because they will earn a US dollar price that translates into more foreign exchange back home.

“Farmers are more willing to sell whatever stock they may have,” Mera said.

The situation marks a strong setback compared to what happened last year.

In November 2021, coffee futures rose to the highest level since January 2012. That was thanks to severe drought and unusual frost conditions in Brazil causing market turmoil.

And the shortage of shipping containers made roasters nervous, and they were inspired to stock up as much as possible.

Now, “there are some delays, but nothing compared to what happened before,” said Mera.

Coffee has also become more expensive for consumers.

In the year to October, without adjusting for seasonal swings, coffee prices rose 14.8% at grocery stores, according to data from the Bureau of Labor Statistics.

Starbucks said in November that it has raised prices this year by about 6%.

But improved conditions will not necessarily mean a big drop in coffee prices for consumers, Mera said. This is because, although coffee prices are falling, other costs, such as labor and distribution costs, remain high for producers.

“I think if we see prices come down, it will be in a modest way,” he said.

In addition, large coffee companies like Starbucks secure long-term contracts, which help protect them from short-term volatility.