The main topic right now is the strength of the coffee market in terms of price. It has occupied yours truly for the last 6 months already and quite frankly has made life difficult.
However the facts are this. Coffee has been cheap for a long time. Now the less agreeable bit, as everyone is aware, coffee along with most other commodities, has continued its relentless rise in both New York and London.
Since we were forced to announce a price rise in February, the New York C market has risen further 50 cent lb., reaching the dizzy heights of $2.90/lb. levels not seen since 1977. Many traders are convinced that we will test and breach the $3.00 barrier in the near future. Without a sudden, substantial but unlikely reversal in the market in the very near future, a further rise in price for roasted coffee is inevitable, probably before or during June, the increase will be determined by how far prices continue to rise on the N.Y.C. in the weeks to come. Reduced drops, due mainly to climatic events, leading to stock of raw coffee in consumers countries being at all time lows, combined with burgeoning demand, especially among consumers in the emerging world economies with huge and growing populations, will inevitably lead to global food shortages. Apart from the social and political implications, we will all have to learn to live with these higher prices, over which no-one at least of all the roasters as any control. However, the potential for future world instability caused by global food shortages, somewhat outweighs the problems we face from an increase of a penny or two on a cup of cappuccino.