Coffee prices... like bank interest and petrol.

[martybean]

Re: Any Idea Why

Just out of interest Java where do you get your beans ?

[Javaphile]

Re: Any Idea Why

Just out of interest Java where do you get your beans ?

Im in the US and so dont have access to the wonder of BeanBay. Up until this order I had been getting my beans from a high end specialty roaster a few kms away at a very nice price. With the tightening of their bean supply and the increasing cost to replace existing stocks they decided to stop selling greens. Although there are plenty of other specialty roasters here none of them had the high end beans with one exception, and he wanted way too much. (Damn yuppies with more cents than sense!) There is a bean importer here but they wont deal with anybody other than commercial roasters and pallet sized lots.

So I turned to my favorite research source and did some digging on the net and turned up a source of high end beans out in the middle of nowhere a few hours driving from here. I rang them up to check pricing and availability and then placed the order with the intention of driving up to get it to save on shipping costs. I was very surprised when they offered to ship the beans to me for less than it would have cost me to drive ($USD50) up there and have them to me in 2 days. The final price on the beans worked out to be just over $USD8/kg, almost exactly what I had been paying.

I ended up getting a bit over 110kgs of Costa Rica Tres Rios, Guatemala Antigua, Indian Mysore Nuggets Extra Bold, Kenya AA Tembo, Nicaragua Jinotega Rainforest Alliance La Bastilla, Papua New Guinea A Kimel Estate, Rwandan Ingoboka Coop Bourbon, Sulawasi Torajaland, Sumatra Mandheling Tiger, Tanzania Peaberry, and Organic Ethiopian Yirgacheffe. Hopefully itll be enough to last me at least a few months. : ;D


Java "Sitting on his pile o beans" phile

[Thundergod]

Re: Any Idea Why

The PNG Kimel is my staple at the moment and I use the expression "more dollars than sense".

[Javaphile]

Re: Any Idea Why

The PNG Kimel is my staple at the moment and I use the expression "more dollars than sense".

Yup, I like the Kimel as well. A very nummy bean. Its one of my old favorites that I was able to grab with the order.

Most people do use "more dollars than sense" but given my fondness for word play I tend to go with cents. It smells better to me. : ;D


Java "Smelling up the place" phile

[martybean]

Re: Any Idea Why

Thats a good supply Java like the Png kimel too

[pie_in_ear]

Re: Any Idea Why

This was something I used to reply to a specific question about coffee prices rising and farmers being paid more, but I thought it would be fitting here. Ive edited it to be les of an answer but its early and a teething 7 month old prevented me from my morning coffee today.

Coffee price rises are cyclic. They have been going up for 6-8 years and probably have another 5 year rise. Then they will start to fall. This is nothing new. Typically the rise and fall of coffee prices affect cheaper beans more than top end beans. Most of my beans have only risen 10c / kilo over the last 5 years, because I am using excellent coffees and ethically produced stuff. Unfortunaly the farm workers are not affected too much from the price fluctuation.

What happens at the moment is as prices rise, so to does quality. This is because the farmers have more money to spend on production. The rise in quality drives the price up more as well as allowing smaller farms to become world traders. In the next 5 years the market will saturate and there will be more production than demand for beans. Farmers will drop there prices in order to move crops, and as the price goes down so too will quality. As the quality drops, so to will production from a number of smaller farms. As price drops, so too will demand increase until the cycle bottoms out and starts all over again.

What is interesting about this cycle is the following:
1) specialty beans are far less susceptable to the cycle than cheap commercial rubbish.
2) Price fixing schemes like Fair Trade(not starting a seperate debate here) will see less money go to the farmer than should be in a price rising time.

That said, coffee prices are all about demand Vs quality. A high quality bean which is sought after will remain high priced at all times. A perfect example of this is the Brazil Daterra. This plantation co-op has proven it is only quality that can position your plantation in the right price bracket. 10 years ago when the last cycle was at its trough they decided to be a major player in the specialty market. The average farmer on these plantations earns 300% the average farming wage in Brazil. They care more, the bean improves, more people want it, it fetches more money. Simple economics of quality.

[Javaphile]

Re: Any Idea Why

While it is true that high end beans are generally less affected by price swings in the marketplace, prices for them are on the rise here.

Something else to take into consideration is the exchange rate. With the falling US Dollar, price increases seen here are not necessarily seen to the same degree (or at all) in other countries.


Java "Making like Scrat and stashing his beans" phile



*stomp*stomp*stomp* Oops! :-/

[Andy]

Coffee prices... like bank interest and petrol.

Well every bean broker I have spoken to in the last month is in a flap.  

The commodity indexes that nearly all world prices are based off (including our suppliers) are going through the roof at the moment, highest in 12 years and the forecast for December futures are around the 190 mark.  The suspected cause includes the US property thump and lower value of the US$, both cause investors to look somewhere else and the soft resource sector is the one they are heading for.

The bad news is that just like the banks and oil companies that charge the new price for money they already had or for the petrol that was already in the tanks, the bean brokers are all passing the rises on to us (regardless of their stock holdings).  Average pricing increases are $0.50-$.80 so it wont be long till that flows down the chain to the cup of coffee in a cafe too.

FYI, the below image is pricing for the last month...




The good news is that Thundergods 78kg stash is now worth $60 more and rising.


The below image shows the previous 12 months data.

[Javaphile]

Re: Coffee prices... like bank interest and petrol

Yup, prices are on the rise. Weve been discussing this in another thread over the last couple of weeks. Ill splice that thread onto here to bring it all together in one spot.


Java "All stocked up!" phile

[Andy]

Re: Coffee prices... like bank interest and petrol

Yup, prices are on the rise. Weve been discussing this in another thread over the last couple of weeks. Ill splice that thread onto here to bring it all together in one spot.
Java "All stocked up!" phile

Thanks Java, I missed the other thread due to a cryptic subject I think (I do now wonder just how many of the 90,000+ previous posts I have missed?).

I was posting it because broker here ARE putting prices up. The 150 mark is the point where all those with forward contracts get twitchy and most Australian broker pricing I have seen in the last month has had seemingly random price rises of AU 50-80 cents.

What is interesting is that the prices are only for IMPORTED beans that trade out of NY and London. The positive for our local coffee growers is the chance their product pricing gap will narrow and as a result might become more viable in cafes?!?!

[benipk]

Re: Coffee prices... like bank interest and petrol

I did mention this in the thread previously, before it was moved - But Fairtrade is not a fixed price contract. Please investigate and learn about the trade system before making sweeping claims about it.


Edit: If I do seem to get annoyed about this sometimes, its due to a lot of rumor and misinformation flying around, with no credible sources. Things like this can really hurt a movement like Fairtrade. As I said previously, its not perfect. No system is - But at least its a step in the right direction and one that is doing more good than harm. Rather than criticising those trying to make a difference, suggest ways in which the system can be improved

[GrindOnDemand]

Re: Coffee prices... like bank interest and petrol

... average pricing increases are $0.50-$.80 so it wont be long till that flows down the chain to the cup of coffee in a cafe too.

Most possibly, but not the sole justifiable reason for an operator to rise price ...

90% Oz coffee drinkers have milk - that being the bulk of their chosen beverage. Drought (1), inflated fuel costs meaning increased cost of transportation (2), means the (current & rising) price of MILK is probably equally, if not more, a concern with cafe owners when considering when to impose a price hike on to the punter.

I getta heluva lot more shots from a kg of beans, than I get an equal return from a litre of milk!

Lets contextualise for a mo ...
Tony

[psaigh]

Re: Coffee prices... like bank interest and petrol

I did mention this in the thread previously, before it was moved - But Fairtrade is not a fixed price contract. Please investigate and learn about the trade system before making sweeping claims about it.

Comment retracted

[Ray_C]

Re: Coffee prices... like bank interest and petrol

I guess there has to be a flow on affect right across the board when basic commodities are on the rise, transport and other primary expenses have all risen, so the $64 question is: Where does it all end, Ill tell you, its when the trumpet sounds and we are called from the four corners of the earth.

ponder about it, its of extreme importance......... Ray.

[Andy]

Re: Coffee prices... like bank interest and petrol

I did mention this in the thread previously, before it was moved - But Fairtrade is not a fixed price contract. Please investigate and learn about the trade system before making sweeping claims about it.

Sigh...
Fairtrade CAN BE A FIXED PRICED CONTRACT and most often is.
Back at ya -- "Please investigate and learn about the trade system before making sweeping claims about it."

Ben, please keep the FT discussions to the other thread that you are posting in at the moment. It becomes hard to follow the multiple postings in multiple threads.