Up, Up And Away

Coffee Market Growth Chart Graphic

Well here we are at the beginning of September and we are on our second wave of the 2011 Coffee Market bull run. After reaching a low of $2.38 we now stand today at $2.90, with 18 days of consecutive gains. Roasters and importers are stressed.

The Big Dogs’ Market Impact

First, Indonesia is shipping 40-45% less coffee. Second, Brazil may or may not have damage from a light to moderate frost that may or may not have damaged future coffee flowerings. Thirdly, Colombia news is neutral and we are waiting for more new crop news. Lastly, roasters are getting creative as to how to use lower grade coffees in their blends.

The Big Dogs’ Market Impact

One thing for sure is roasters need to raise prices on their coffees or risk not being in business in 2012. So who is making all the money on this Bull Run you ask. Well, one segment, the dreaded bottom feeding “speculators”. They have control and until they find another avenue to make their profits, we are getting it in the shorts. Some of the recent volatility reminds me of two old movies “Wall Street” and “Trading Places”.

Greed Good? Not So Fast.

And while I am the eternal capitalist, I don’t agree with the ‘Gordon Gekko’ mantra “greed is good”. Maybe in the future we will have our Mr. Beaks moment and the market will come back down to earth! Until then, focus on quality. It’s what got you to where you are at, and remember there is always somebody out there that will roast cheaper grades of coffee. While the present is tough right now, I would like to think that we have clearer skies ahead.

 
Happy Roasting,

Andrew Vournas


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Feel free to email us anytime or call to speak with our friendly staff M-F, 8AM – 4:30PM PST about the 2011 coffee market bull run and up to date info on our current specialty coffee offerings, and how we can help your roasting business. 800.761.JAVA