Coffee prices are expected to soar around the world due to natural and manmade factors.
Changes in the coffee market have reduced coffee supplies and are driving some coffee-bearing regions to stockpile coffee beans. This is big news if you are a coffee drinker. Prices are expected to increase around the world. It is a lesson of basic economics - the law of supply and demand - and there is nothing that can be done about it this year. Unfortunately, everyone from coffee farmers through roasters and retailers, right down to you and your coffee mug, is feeling the effects a poor growing season can have on an agricultural product that is consumed internationally but only grown in a few select regions.
Weather is as unreliable as a commodities market, and these days, it seems just as unstable. A bad season in South America led to weaker than usual harvests and a resultant decline in this year’s world harvest of Arabica coffee beans. Like a run on the banks, this has led to panicked stockpiling in other regions of the world. Beyond that, investors in coffee commodities too took a lemming-like run on robusta coffee beans, driving up prices of the lesser quality coffee bean as well. This combination of natural and man-made factors in the coffee market this year has formed the perfect storm to drive up all coffee prices.
The result is that coffee prices have reached an historic high. All of this has happened at a time when domestic stockpiles of coffee beans are low. Not a single domestic manufacturer of whole bean, ground or single serving coffee is escaping the increase in costs that this leads to. The result is as much as a twenty percent increase in coffee prices. Of course, this cost increase is passed on to the retailers and unfortunately also affects the pocket books of coffee drinkers.
We are expecting even the best K-Cup coffee prices to increase 10 - 15 percent and other coffee products to see similar price jumps in the first weeks of October. That makes now the time to stock up in order to beat the price increase.
Coffee is a market-based commodity; as demand stays steady and the supply declines, worldwide prices increase. We can all hope for a better harvest next year on all the coffee farms the world over.
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WATERBURY, Vt. (September 7, 2010) – Green Mountain Coffee Roasters, Inc. (GMCR) (NASDAQ: GMCR), announced today a price increase on all K-Cup® portion packs for its Keurig® Single Cup brewing system sold in North America. The increase will occur across all sales channels and will be effective beginning October 11, 2010. Consumers could expect to see a purchase price increase of approximately 10 to 15 percent over the next several months as a result.
