13 May 2011

Coffee prices continue to rocket on global markets (Source BBC business news 10/5/11)

Arabica c/Pound

Robusta $/Tonne

Both arabica and robusta world green bean coffee prices have now doubled in the last 12 Months. The expectation is for prices to continue to rise throughout the year with frosts in Brazil challenging production and demand ever increasing, particularly in emerging markets (India and China).

It's still worth bearing in mind that even with prices at a 20 year high, a cup of quality Ciao coffee still costs from just 4.7p - 7.9p (depending on the blend)

12 April 2011

Clipper Tea Launch

We are proud to announce the launch of our new fine tea range. Clipper Tea is a premium range of high quality Fairtrade and organic teas offering a large range of both everyday and speciality tea options.

Check out our Clipper Tea starter kit which has been prepared especially for Denby Dale Coffee which contains a free Clipper Tea display stand and point of sale.

Click here to check out the Clipper Tea Range.

April 6 2011

News is still dominated by further coffee increases. illy, Gaggia, Kimbo, Lavazza and every other coffee roaster have announced yet more price increases to take effect at the end of April 2011. That's an average of 3 increases in the last 12 months or 35%. Denby Dale Coffee are determined not to pass on anywhere near these increases. We have been forced to implement some increases on branded coffee (illy & Gaggia) but only by an average of 9%. The Ciao coffee range remains unaffected.

Annual Commercial Machine and Domestic Coffee Maker increases have been modest but we have not increased our prices for the 3rd year in a row.

For more information as to the world coffee price hikes, read the update below.

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March 14 2011

You have likely heard about the price hikes in many commodities and are probably starting to feel the pinch on your wallet. Unfortunately coffee, and in particular Arabica Coffee, is affected in these large price increases. After reading through several articles, there are several explanations for the increase in world coffee prices last year and is looking equally challenging for 2011.

Decreasing World Supply

This past 18 months has proven to have some very strange weather conditions all over the globe. The changing climate is altering weather patterns and interfering with the weather conditions required to grow coffee beans. Ideal conditions for growing coffee beans are periods of rain followed by sunny, dry periods. Without these conditions, the coffee plant is not able to flower, produce cherries or ripen. Consequently, harvests last year were disappointing and there is speculation that this year will be equally poor.

Increasing Demand for Commodities in Emerging Markets

For the most part, emerging economies of Asia and Latin America are the primary driver of rising commodity prices. The emergence and growth of the middle classes in China, Brazil and India, in particular, are altering the commodity markets. These countries are now competing for the limited supply of coffee beans with Europe and North America; the competition and increased demand is contributing to increased prices.

Political Unrest

Food prices have been rapidly increasing for several months but the political unrest in North Africa and the Middle East has caused another sharp spike in pricing. The unrest brings fear of inflation. Many countries are stockpiling their food supply as a means of national food security. The result: less fluid coffee available and higher pricing.

Rising Oil Prices

The price you see at the pump reflects the prices you pay elsewhere. Because oil is used in the transportation of goods, the increase in oil affects almost every other commodity and consumer product out there, including coffee beans.

Elasticity of Coffee

Elasticity is an economic term that simply refers to the ratio of change between two variables. Typically, if an item becomes more expensive, consumers buy less of it, to some extent. Economists are noticing that coffee is fairly inelastic – that is consumers are buying the same amount of coffee regardless of the price they pay. The major result is that the increases in coffee prices will not help to alleviate the falling supply of coffee beans.

For now, coffee retailers and coffee consumers are going to have to prepare for the future prices of Arabic coffee beans, which have already reached a 20 year high.

Bear in mind however that even a hefty 33% price increase in coffee beans at trade (assuming you have a business selling coffee through your commercial coffee machine, or using at home with your coffee maker), the cost increase per cup will only be between 2p - 3p.

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Feb. 23 2011 - Arabica Coffee Shortage is Driving Up Coffee Prices in 2011

Coffee Market Business Report. Coffee stockpiles in Brazil are now being held from sale in anticipation of higher prices for the green coffee beans (unroasted coffee beans), adding yet another concern to an Arabica coffee bean shortage that is helping to drive up coffee prices.

Since Brazil is the largest coffee grower in the world, their announcement of withholding coffee stockpiles from sale serves only to exacerbate the current problems in the coffee supply chain which have contributed to significantly higher coffee prices in the last six months as well as a spike in the price of coffee futures on world markets.

According to one of Brazil’s top coffee officials, Brazil is holding out for higher prices before releasing its coffee stocks. This provides fresh support for the current rally in coffee prices and coffee futures.

Coffee Stockpiles Reach Historic Lows Worldwide

Brazil Coffee Consumption Increasing at a Rapid Rate

World Coffee Harvest in 2011 Facing Difficulties on Several Fronts

A New Breed of Gourmet Coffee Lovers Affects World Coffee Markets

Brazil’s domestic coffee consumption has been rising much faster than the worldwide level of two percent annually, and this is also the case in Asia including the economic powerhouse of China where many people have switched over from tea (some say to emulate Europeans and Americans) and are now developing a taste for gourmet coffee.

China’s coffee consumption has increased an estimated forty percent in just the last two years.

Worldwide Demand for Arabica Coffee Keeps Growing

Brazil Holds On To Its 1.2 Million Bags of Stored Coffee

Tight Coffee Supplies Could Lead to Future Coffee Price Increases

Some analysts are predicting a coffee shortage in 2011 and 2012 and this could be made worse if there are any new disruptions in the supply chain (e.g., bad weather, coffee hoarding by coffee growing countries).

Coffee Supply May Not Meet Demand Which May Cause More Coffee Price Increases

With coffee demand threatening to exceed the supply and the world’s coffee storehouses having been significantly depleted in 2010, coffee prices will likely continue to sustain their high levels at least throughout 2011 and possibly well into 2012.

Brazil Expecting Reduced Coffee Production in 2011 

In January of 2010 the coffee harvest of Brazil for 2011 was estimated by the Brazil crop supply agency Conab to be in the range of 41.9 million to 44.7 bags (60-kilogram bags) which is a decrease from the 48.1 million bags of coffee produced by Brazil in 2010.

Coffee Price Increases In Recent Years Continue Unabated

Coffee prices rose 40% from May through December, 2010 and the current supply of high quality Arabica coffee beans remains very tight as the countries around the world develop a taste for specialty coffee including espresso drinks such as cappuccinos and lattes made with espresso produced from specialty coffee beans.

Coffee Yield Reductions Already Factored Into Coffee Price Increases

Coffee Futures Rise On Expectation of Future Coffee Price Increases

Coffee futures contracts are traded primarily on the Intercontinental Exchange with the the New York Coffee, Sugar, and Cocoa Exchange handling Arabica Futures and the London Futures Exchange handling Robusta Futures. Coffee futures rose 72% in 2010 ending at a 13-year high.

Massive New Coffee Plantings Still Not Meeting Increase in Demand for Arabic Coffee Worldwide

Though some of the world’s top coffee growers – including Brazil and Vietnam – have planted massive new coffee acreage it has not yet served to stabilize coffee prices amidst rapidly rising worldwide demand for coffee. Most analysts are seeing a fundamental shift in the world’s coffee markets as demand has clearly caught up with and now likely exceeded supply. Colombia’s coffee harvest could see further problems due to the persisting La Nina weather pattern.

Coffee Supply Problems Will Likely Continue to Cause Coffee Price Increases

Coffee Shortage Fueled By Worldwide Coffee Demand Outstripping Supply

In 2012 it is estimated the demand for coffee will be exceeded by the supply by an amount of about five million bags of coffee. If this holds true expect higher coffee prices.

Coffee machine and coffee maker manufacturing have seen modest increases.