Coffee Price Increases
Our new coffee range, launched this January, has proved incredibly popular. Those of you who are dedicated consumers of, or who have dedicated customers for, these single country Fairtrade Organic Coffees will know of the quality that lies within the distinctive packaging. We’ve recently had a successful give away campaign for the decaff on our website.
Unfortunately, we are not immune from world market fluctuation. Over the last 12 months the UK coffee industry has suffered terrible price inflation. Currency has remained more or less stable but the differentials paid for coffee (over the market price) have increased dramatically – with little prospect of change in the future. This is due to a number of factors:
Poor harvests in Colombia
Colombia is the 3rd largest coffee growing country in the world, it generally produces a high quality coffee that is used widely as a single origin or in blends. The 2009 harvest was badly affected by a long period of poor rainfall just at the time it was needed for the important flowering. This reduced the crop by approximately 30 %. Again this year the crop is similarly reduced due to adverse weather and disease. This is a disaster for Colombian farmers but, because it is such an important origin, it has increased prices of other origins dramatically by about 50 %.
This fall in output has coincided with an increase in consumption, mainly from the developing world and particularly Brazil. So where there would normally be some slack in the system to substitute for Colombians, the world supply / consumption is currently delicately balanced.
The effect of all this is to increase prices, roughly by 25 – 30 % on most good Arabica coffees.
The devaluation of Sterling
Coffee is traded in US Dollars worldwide and over the last 12 months Sterling has suffered an effective devaluation against the US Dollar. This in turn has increased the costs of all imports, particularly coffee.
We have held off increasing our prices for as long as possible but there is no reduction in sight and we have no alternative to increase prices.