Specialty Coffee Prices Rising

Posted on: 2014-10-31 12:00 AM

While still dwarfed by the European and U.S. coffee markets, consumption across Asia is growing rapidly along with rising incomes, straining already-tight supplies and pushing up prices. Some buyers say Asian bidders are more willing to pay exorbitant prices for the rarest types of coffee, which are a novelty in traditionally tea-drinking countries such as South Korea and China.
Most of the world’s coffee beans are sold in bulk by farmers, cooperatives and trading companies; just a fraction are sold in online auctions. But booming demand is helping drive up the value of beans across the board, along with Brazil’s worst drought in decades, which has crimped output from the world’s biggest grower. Benchmark Arabica coffee futures doubled this year to top $2.20 a pound for a time, forcing mass-market brands from Starbucks Corp. to Folgers maker J.M. Smucker Co. to raise prices. Coffee for December delivery traded at $1.9135 a pound Monday on ICE Futures U.S.
 
Beans sold in auctions such as the one can sell for $30 a pound or more in stores and cafes. While the prices of those beans have little direct effect on the prices most consumers pay, the popularity of rare, high-end beans does pressure some mainstream roasters to buy better beans, coffee-industry members say.

Coffee roaster are finding that specialty coffee can get over valued in on-line auctions, Roaster need to be careful because they can pay a lot of money for coffee that can often be found much cheaper through other channels.

On a positive note, when the price of this specialty coffee increases growers are incentivized to produce these higher quality products.  This in turn creates greater selection of higher quality specialty coffee available for home consumption. Smaller and often more nimble coffee shops are often taking advantage of this higher customer appreciation to create unique blends and roasts for in store purchases.  Consumers have the opportunity to elevate their experiences by trying out some of their local specialty shops for the latest trends.