This article is originally referred from iForex Blog.
Wake Up and Smell the Pricey Cappuccino
If you happen to be living in Britain and enjoying your morning cup of coffee, perhaps you should savor it, because the price of this beverage might rise, and you can pin that on the Brexit vote too. Partly, at least.
The pound fell to its lowest in 30 years against the dollar, and as U.K. roasters pay for the raw product in U.S. Dollars, they’re now have to pay more than they used to. Should consumers prepare for an instant price increase? Not just yet. Most roasters stock up 6 to 12 months in advance, so the real issue could begin around Christmas, unless the GBP will rebound by then.
We can’t blame the Brexit for everything though. Coffee prices are going up around the globe, skyrocketing by over 20% since June 1st. The combination of climate changes, increased global demand and crop issues led to an increase in coffee price and the ones paying for it are – you’ve guessed it: Consumers. Only last Tuesday, Starbucks increased coffee prices in the U.S.
Does this mean customers will stop purchasing their morning cup? Hardly. In the past, coffee drinkers seemed willing to handle price increase rather than facing the hardship of a caffeine-free morning.
This is just one of many examples of how a single political event: The UK referendum and the resulting Brexit vote, has the power to affect many different aspects of the economy. At iFOREX you can learn more about market events and their potential impact. You can also learn how to invest in a variety of commodities – including coffee prices.
Any indication of past performance of a financial instrument is not a reliable indicator of current and/or future performance of such financial instrument.
Original Source: iForex Blog