Why Coffee Prices Are Soaring

If you follow my posts on this page or check the Market Feed on the Gillies website: https://www.gilliescoffee.com/education-tools then you know that the price of coffee has been going up for a while and is already being felt in Gillies’ prices.

Yesterday we were met with an additional unexpected event. There has been a frost in the coffee-growing areas of Brazil, and the New York market responded by shooting up 7% in one trading session. Rich Asplundh, a soft commodities specialist has written a report on the situation, published on barchart.com. Find it here: https://www.barchart.com/news/authors/5/rich-asplund

In years gone by coffeemen watched the calendar for Summer frost news from Brazil (seasons are reversed in the Southern Hemisphere). Frosts can be devastating to Brazil’s crop, and this is the first such event of note in about 20 years. Find a history of Brazilian frosts here: http://www.coffeeresearch.org/market/frosthistory.htm. Brazil is the world’s largest coffee producer, and a major event there really rocks the world coffee boat.

During the coming weeks, and months, the price of coffee, both green and roasted, will advance here in the US, until roasters and green merchants find an equilibrium between the value of their inventory, and the cost of replacement beans.

There are winners and losers in commerce. This is not going to be fun for any of us, but it may prove to be a blessing for coffee farm families throughout the world if the richer price point for beans is sustained long enough to let its benefits trickle down to the farmers, and their coffee kids.

I will keep in touch with you through the Gillies Blog (Coffeeman’s Diary) and through this new direct-contact tool, Mailchimp, to report intelligence that may benefit your business in the time to come. In the meantime, thank you for choosing Gillies Coffee.

-DNS, coffeeman

Additional Reading: Bloomberg / Wild Weather in Biggest Coffee Exporter Sparks Price Surge: https://www.bloomberg.com/news/articles/2021-07-20/wild-weather-in-biggest-coffee-exporter-sparks-price-surge

Additional Watching: ABC / Good Morning America: https://www.goodmorningamerica.com/food/story/reasons-coffee-prices-rising-78813660

Leave a Reply