Back in September and October there were stories in the local media claiming surging coffee prices and the weak dollar would soon take the price of a cup of coffee (flat white etc) to $5 or more (that’s an average — there are plenty of places in inner Sydney where that level is the norm). I notice Rupert Murdoch missed that big yarn.

Since then world coffee prices have fallen 25%, and while the Aussie dollar has weakened as well, the slump in prices has been greater — and curiously, The Australian, Daily Mail and MailOnline and other scaremongers from October have failed to follow up on the slide.

And the slide in prices is going to accelerate with the current Brazilian crop larger than expected, according to Swiss trader Volcafe (owned by the big commodities group, ED&F Man). Volcafe forecasts that prices for arabica-type coffee (the key global price indicator) fall 3.4% to US$1.715 a pound, compared to the peak of US$2.2910 a pound hit in October due to fears drought would cut the 2015 Brazilian crop. In fact there’s every chance coffee could join cotton, sugar, grains and oil seeds in oversupply next year, with weaker prices as a result.

“Upon completion of an extensive crop tour, our first estimate for the 2015 Brazilian crop is 49.5 million [of 60kg] bags,” Volcafe said. That’s at the high end of forecasts, which ranged from 40 million to 50 million bags. Volcafe’s forecast indicates the crop hasn’t been as badly damaged as previously thought, with recent good rains across Brazil’s coffee-growing areas helping to ease concerns. Volcafe’s forecast was after a month-long survey through the growing areas of Brazil by its experts, who travelled 13,000 kilometres.

The United States Department of Agriculture has added to the increased confidence with an upward revision in 2015 Brazilian output of 1.7 million bags to 51.2 million. Helping the coffee supply/demand balance has been a fall in net imports of coffee into Europe in the first six months of this year of 1.1%. Europe is a big processor and exporter of finished beans to other parts of the world. The fall in net imports means fewer beans (mostly green and unroasted) were imported. That indicates weak demand from consumers for coffee of all types, which fits with the sluggish level of economic activity across the continent, but especially in Italy, Spain, Greece, France, Holland and Germany.

So don’t panic. Your latte is going to be just fine.