Coffee Price Increases Continue Upward Trend
Along with other agricultural commodities such as sugar and cotton, recent years have seen a scarcity of coffee that has propelled prices ever higher through 2010 and beyond. As coffee prices continue to increase in 2011 consumers are beginning to feel the pinch.
When times are tough economically, people still want their coffee, and more and more people around the world are developing a taste for the revered bean even as the world’s top suppliers have seen a lower output of the revered beans, and in particular the prized Arabica coffee beans.
The Arabica varietal of coffee bean constitutes most all of the world’s premium gourmet coffees.
Increases in Coffee Prices Attributed to Numerous Factors
The rise in coffee prices is attributed to several factors, not the least being the torrential rains that devastated some areas of Central America and Columbia in 2010. Another significant factor is the steady rise in demand in numerous countries, most notably China and Brazil.
For China this means a vast growing market, and for Brazil it means that country will be holding on to more of its own supply than previously. Meanwhile Europe and North America sustained their massive demand for coffee even during the recent years of severe economic woes.
Price of Coffee Expected to Continue to Increase
For these and other reasons coffee prices are expected to stay high in 2011, even after coffee futures rose nearly 80% during 2010. At year’s end coffee futures were $2.4040 per pound.
Because there are large inventories of coffee the shortage has taken some time to work its way through the supply chain to the consumer though prices increases should reach store shelves this year as well as being felt at the local coffee shop.
Coffee powerhouses Farmer Bros., Kraft Foods and Starbucks have already begun to institute price increases and other major coffee companies and sellers, including Dunkin Donuts, will likely soon follow suit.
Also see: Five Best Coffees In the World
Low Supply of Premium Arabica Coffee Beans
The consistently low supply of Arabica coffee beans has also begun to affect the world market with changes including Brazilian Arabica beans being included on the list of grower nations for the benchmark C contract, a change that will not take effect until March of 2013 but which has been sought after for more than a decade and which will likely increase liquidity in the coffee market.
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