Coffee prices

[admin]

there was an article in this weekend's Australian about coffee prices going upwards [after years of being very low] - good news for farmers in developing countries, but interesting to know what effect it might have on retail coffee prices?

A

[moto coffee]

My thoughts are that consumers are very price sensitive at the moment and retail outlets need to be careful with their pricing, that said you need to manage your pricing to make a profit (nasty business this is).

[askthecoffeeguy]

Melbourne coffee prices have been too low for too long -  I have no problems paying more or charging more for great coffee - especially if that coffee is specialty and boutique roasted, and made by folks who care about what they do!

And any price increase to the farmers can only be a good thing - they would need to be paid significantly more than what they're getting on average at the moment, before that price increase impacted upon what consumers pay for the final product

[hazchem]

Melbourne coffee prices have been too low for too long -  I have no problems paying more or charging more for great coffee - especially if that coffee is specialty and boutique roasted, and made by folks who care about what they do!

And any price increase to the farmers can only be a good thing - they would need to be paid significantly more than what they're getting on average at the moment, before that price increase impacted upon what consumers pay for the final product

same here. I'm more than happy to may more for specialty coffee that is properly roasted and brewed with care. I've even tried to give some places more money on occasion as I know they must be taking bath on some coffees when they are sold at only $3. Never works though so I just put it in the tip jar.

More money back to the farmer is key though and we all know the reasons why. But how to get the mass market to accept this and swallow a higher price at retail? The Fairtrade model, as flawed as it is, has at least gotten the message of a need for a higher price at the farm gate. But where to from here? Do retailers push the CoE auction message based on how the coffee has been judged? I fear that in the short to medium term, this is only going to appeal to a niche. For the mass market, I think that sustainability and social responsibility message is what will get traction first. This also means that other programs like UTZ, Rainforest Alliance etc aren't excluded from getting their messages to cut through.

I think/hope that once this message cuts through, retailers will find it easier to expand on the ideas and educate customers further about freshness, exciting flavours and all the things we really love about specialty coffee.

That's just my sense as a consumer though, I may well have the wrong end of the stick! 

[admin]

Interesting update on this topic from Businessweek online: Coffee Rises to 12-Year High as Inventories Drop for 20th Month; - article text below:

Inventories of arabica coffee in warehouses monitored by ICE Futures U.S. have dropped every month since November 2008, falling 54 percent. Based on price-chart analysis, futures may extend the rally to the highest level since August 1997, said Jim Stellakis, an independent analyst, and Robin Rosenberg, a futures and options strategist at PFG Best.

Arabica-coffee futures for September delivery rose 3.25 cents, or 1.9 percent, to close at $1.763 a pound at 2 p.m. on ICE in New York. Earlier, the price reached $1.7875, the highest level for a most-active contract since Feb. 6, 1998. The commodity jumped 6.2 percent this week.

In 2010, coffee has gained 30 percent, the most among 19 raw materials in the Reuters/Jefferies CRB Index and coffee futures may jump as much as 13 percent to $2 which would mark the highest level since Aug. 11, 1997.

On the Liffe exchange in London, robusta-coffee futures for September delivery gained $63, or 3.6 percent, to close at $1,810 a metric ton at 5:30 p.m. local time.

Stockpiles of robusta, grown mostly in Vietnam, were 211,930 tons as of July 26, down 39 percent from the end of 2009, according to figures from NYSE Liffe in London. (Bloomberg)

[askthecoffeeguy]

heard on the grapevine today that one of australia's big two coffee importers is dropping out of the australian market for reasons that I wont mention here - leaving only one major importer for the whole of australia i.e. a closed market with massive demand!

expect coffee prices across the board to get a whole lot higher sooner than expected!

[admin]

boy, that's pretty big news ACG - which are the ones that are dropping out; which one will be left?

A

[Dry bean.]

heard on the grapevine today that one of australia's big two coffee importers is dropping out of the australian market for reasons that I wont mention here - leaving only one major importer for the whole of australia i.e. a closed market with massive demand!

expect coffee prices across the board to get a whole lot higher sooner than expected!

Ahhhh yes, but keep in mind that (Nature abhors a vacuum) if there is sufficient demand and the market will support more than one player expect the gap to be filled quickly by some enterprising outfit, monopolies seldom last long. 

[askthecoffeeguy]

According to my sources the same situation has happened twice before each time leading to an escalation of coffee prices...

[Dry bean.]

According to my sources the same situation has happened twice before each time leafing to acedpud escalation of coffee prices...

leafing to acedpud   

So if the same situation has happened twice before someone must have stepped in and taken up the slack.

[askthecoffeeguy]

According to my sources the same situation has happened twice before each time leafing to acedpud escalation of coffee prices...

leafing to acedpud    

yep... if those damn coffee prices keep escalating you wont find me sticking around... I'll be catching the next train to Acedpud!

oh, yeah.... and I'll probably stop using my iphone to add content to forums as the damn autospell check has a mind of its own!

[Dry bean.]

Where the heck is Acepud? googled it with no result, are coffee prices more reasonable there?

[DoubleRistretto]

anywhere near Kandina -ha, ha?

dR

[Dry bean.]

Back on topic, I have no problem paying a fair price for coffee if its worth drinking, I object strongly to paying $3.50 for a cup of swill that in my home cafe would be a sink shot, and sadly this is the case all too frequently, its pointless sending it back and complaining because you know they will replace it with another exactly the same, so all you can do is cross the joint off the list of places to frequent.

[AM]

Back on topic, I have no problem paying a fair price for coffee if its worth drinking, I object strongly to paying $3.50 for a cup of swill that in my home cafe would be a sink shot, and sadly this is the case all too frequently, its pointless sending it back and complaining because you know they will replace it with another exactly the same, so all you can do is cross the joint off the list of places to frequent.

So true...

I would be happy to pay $4 or more... Problem is most places should be paying me...

Yes Australia is getting into the coffee stuff... But most have dropped the quality for the sake of a few $$$

And even the places I once went to have now changed hands and for teh new owners etc it is about TRENDY etc and the old fashioned coffee culture is no longer there OR if so, is no as strong...