Costa Rica Coffee Along With All World Coffee Prices Are Jetting Upward

Coffee from Costa Rica and other world roasters of other beans are about to pass price increases they have been thus far absorbing. Industry analysts are certain price hikes are soon coming.

Roasters pay more, and must increase their retail and wholesale coffee prices.

From 17 to 38 percent is expected for coffee at the top coffee shop chains. According to the experts, the factors for this are several, and largely resolves into a traditional supply and demand issue.

Demand for high end, Costa Rican gourmet coffee and other country growers, is decidedly up.

This reflects the fact that tastes of consumers have gotten much more sophisticated.

In conjunction with that fact, there is also the fact that there was, as reported previously, a historic marker hit in futures prices. It rose to $3.10 per pound at one point very recently.

“While there were commodities investments five years ago, the volume of that interest was on a much lower scale,” pointed out one coffee industry exec. In fact a coffee chain blames commodities speculators for the growing prices of coffee.

Inflation certainly must take its place as a factor.

Debt levels for the U.S. Government are at historic levels never before approached. The Federal Reserve has been “monetizing the debt”. That is an intentional devaluation of the dollar so that debts can be paid with a cheaper value of currency.

Since the dollar is the international reserve currency presently, and it also takes more of them dollars to buy the same amount of coffee now in the international market. The price of commodities (such as coffee) in general have been in an upward movement as investors have sought havens for their portfolios by investing in them.
Over the past year, the cost of raw (green) coffee has gone from about $1.30 per pound, where it was in June 2010, to approximately $3.10. One driver of the increase has been the futures market, which has seen an uptick in investments because of an increased interest in commodities.

High End Marketing Efforts improved

Major chains’ growth in popularity, Tully’s, Starbucks, even the stalwart McDonald’s, have all improved their offerings to customers. Some of the premier coffee brands have expanded their markets. Upgrading has been the war cry for coffee marketeers. And they have experienced a great success, sending demand for the arabica bean through the roof. Supply has not increased to meet the demand. Rather weather and other factors have brought down production of the prized bean.

Even the cheaper robusta coffee bean is in less supply than past years. Because of these many factors, expectations for producers have risen as well for the price of their farm product. They are not blind to their improved posture in the market. They will be taking advantage.

To the consumer, one can only advise: Buy now… not later.

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