By Marvin G. Perez
No matter how you brew it, higher coffee prices are here to stay. How high and for how long will depend on several factors, ranging from dollar fluctuations to growers’ ability to improve output and possible regulation on speculators’ participation in commodity markets.
Careful What You Wish For
Over the last decade, the specialty coffee industry sought to lure the high-end consumer in order to boost that side of the global coffee business. The new consumer reacted positively to the messages from roasters and retailers about the superior quality offered by some coffee origins, with messages that borrowed from the wine industry about appellation, terroir and other characteristics.
In time, Ethiopia’s Yirgacheffe, Guatemala’s Antigua, Costa Rica’s Tarrazú, Colombian Supremo, Kenya AA, Brazil’s Cerrados, all have become household names for coffee connoisseurs and newcomers alike, in much the way Bordeaux and Sonoma are for wine lovers. For years, the specialty coffee industry wanted that.
Demand for those origins swelled in line with prices, and what was before only a wish, became a reality for industry players. This, however, also sowed concerns for near and future supply of premium coffees. Consumption and knowledge about coffee went hand-in-hand, and the profits were handsome, for almost everybody along the supply chain. But along came higher coffee prices.
Below is a chart showing arabica coffee prices from 2007 to April 2011, highlighting arabica coffee price’s abrupt ascent starting in June 2010, which caught many by surprise.