Coffee-Addict Alert: Sorry Folks, You’ll be Paying More for Your Coffee

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You'll have to pay more for your caffeine fix

Getty images/Jim Shields

Wake up and smell the coffee. And high prices too, unfortunately.

Coffee prices have hit $3 a pound for the first time in over 34 years. With the middle classes in countries like China, Brazil, Indonesia and Asia adopting the coffee culture and developing a taste for cappuccinos, arabica beans are highly in demand.

Jeffrey Young, managing director of Allegra Strategies, a leading consulting firm, told Newsfeed that in countries like India, “growth is going to be staggering in the next 15 years.”

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Poor harvests of high-grade Arabica beans have also contributed to the surge in coffee prices. Colombia, the second-largest producer, expected to have a supply of 10m bags in 2011, but because of heavy rain, traders have scaled down their forecast to about 8.5m.

Crops in places like Mexico have been affected by low temperatures, and market analysts are especially concerned about Brazil, the world’s biggest coffee producer, for producing less than expected medium quality beans.

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But the wholesale price increase, which has been passed onto customers, probably won’t affect our coffee-drinking habits.  “Coffee is now ingrained into our lifestyles. It’s such a routine daily treat,” Jeffrey Young told Newsfeed.

Prices rise because if lower prices don’t cover their production costs, farmers struggle to eat adequate food, to pay medical bills and school fees. Adrienne Fitch-Frankel, from Global Exchange, told Newsfeed that “for most coffee farmers on the planet, the situation is one of tremendous poverty.”

Harriet Lamb, director of Fairtrade Foundation UK, told Newsfeed that “…at the end of the day, what matters is the impact on the coffee farmers.”

Benjamin Markey Schmerler, coffee category and producer services manager at Fairtrade Foundation US, is concerned that high demand is a disincentive for farmers to invest in quality, which he says harms the long-term sustainability of coffee growing communities.

“We are looking to increase access to credit for farming cooperatives so they can fulfill contracts and pay for increases in the costs of sustainable production,” Schmerler  told Newsfeed.

The good news for farmers that do have coffee to sell is that they will be getting paid more for their coffee. But if more people start planting coffee, prices will inevitably come down. (via the Guardian)

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