|
You may have heard that coffee production in Colombia is off. Turns out it's WAY off. What started as a nasty rumor has now been made official--production for April is only 60% of April 2008.
You also probably know that Colombia ranks as either 2nd or 3rd in the world in total coffee production (Colombia and Vietnam are virtually neck and neck--one month one is #2 then next they switch). Only Brazil produces more. And you probably know coffee is traded as a commodity. In fact, it ranks second only to oil in terms of dollar value in international trade. And you probably also know that a mere rumor can cause commodity prices to sky rocket or crash, while an actual "fact" can have enormous consequences.
Albert Einstein once said that compound interest was the most powerful force in the universe. Well, percentage increases in price are similar to compound interest. In just the past two months the price we pay for Colombia Popayan has risen 20%. We just checked our records, and it is up 250% from what we were paying for it just 3 years ago. Because Colombia is such a powerhouse in the coffee world, price rises here tend to pull up prices for other coffees around the world.
OK, so much for the lesson in geo-economics. What does this mean to the home coffee roaster? Just what you'd expect, initially--we had to raise the price of our Colombia Popayan Supremo. We absorbed some of the cost increase, however, and only raised our prices 10%--still, that is one of the largest we've ever had to do, and we did it with great reluctance.
The second thing it MAY mean later in the year is that Colombia coffee may not be available at any price. World specialty coffee production for 2009 is forecast to only be 80% of demand. When you throw in a dramatic and unexpected decline in Colombian coffee production, there is a tendency for coffee brokers and importers to scramble to "stock up" on coffees, particularly the ones known to be scarce, and for large commercial roasters lock in a quantity of bags for future shipment, and bingo--no coffee of certain kinds available on the open market.
How does The Captain's Coffee fare? Right now, we have plenty of Colombia Popayan Supremo on hand. However, it is one of our best selling coffees, and supplies later on in the year are anything but certain. So if Colombian coffee is a favorite of yours, you might want to consider stocking up a bit yourself. All this might very well not come to pass--we may be able to get Colombia Popayan throughout the season--but we thought it only the right thing to do to give you a "heads up" for what might be a supply problem in the months ahead.
Blessings and Happy Roasting
Denny & Priscilla |
News From The World of Coffee 