Botanical drawing of coffee plant.
Coffee ring

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Current price trend in the coffee commodity market


Coffee is an agricultural product, subject to the vagaries of weather, the usual farming problems, and the fortunes of speculation.

Click on the graph for the most recent report from INO.com --


Our colleagues at Counter Culture Coffee in Durham have put together a comic strip with their take on the emerging coffee market and the new era of coffee prices. Their thesis is that high prices are good for specialty coffee since good tasting coffee at a high price is an easier sell than bad tasting coffee at a high price. I can't agree with everything they say, but it's worth your time to have a look here. (The guy with the beard in the comic is Peter Guiliano.)


And in case you were worried about them, don't be, Starbucks is doing just fine. After reading that story, it's difficult to be sympathetic toward CEO Howard Schultz, though he's right about speculation in the commodities market —

From The Telegraph:

Howard Schultz, who masterminded Starbucks' growth from four stores in Seattle to more than 17,000 worldwide, said that more transparency was urgently needed to identify those responsible for pushing up raw material prices. Mr Schultz, who is also Starbucks' chief executive and chairman, said that the current spike in the cost of commodities such as coffee and other foodstuffs is "not based on supply and demand" but based on market speculation. He said that the farmers who actually produce the commodities are receiving a "de minimus" proportion of the price rises. "Right now we are experiencing a very strange and almost inexplicable phenomenon in the commodities market. Without any real supply or demand issues we are witness to the fact that most agricultural food commodities are at record highs at once, and coffee is at a 34-year high," he said. "Through financial speculation -- hedge funds, index funds and other ways to manipulate the market -- the commodities market is in a very unfortunate position. This has resulted in every coffee company having to pay extraordinarily high prices for coffee." Read more ....