The Coffee Crisis Cometh

This is the kind of exogenous economic shock that could really devastate metro economies. I'm thinking Seattle and Brooklyn in particular.

The price of coffee beans hit a 12-year high today. I thought there might be some kind of reclusive-hedge-fund-guy-corners-coffee-market story, like we saw with cocoa earlier this summer.

But the main driver of coffee prices right now is more prosaic: Colombia has had a few years of weak coffee harvests because of too much rain, which has reduced the global supply. And coffee drinkers keep buying coffee, even as prices rise (in other words, demand is inelastic).

If you thought the lines outside Starbucks were long now, just wait until the Arabica Crisis of 2011.

Read the full story at NPR.