Coffee Prices Soar Due to Shortage
September 27, 2007
Auction prices on the Nairobi Coffee Exchange (NCE) rose, on average, $9/50kg as buyers rallied on quality lots after a glut of sub-par coffee resulting from cold spells and isolated bouts of Coffee Berry Disease (CBD). Prices peaked at $136.91/50kg on Tuesday. Overall, crop estimates are down from 58,658 tons to 53,693. The 10% decrease in crop yields coupled with growing global demand is expected to maintain the higher prices in the near to mid-term. According to Daniel Mbithi, an official on hand at the auction on Tuesday:
“The markets are intertwined and the latest developments on both sides are quite impressive. The overriding factor is demand and we expect this to stay on a little,”
So with increasing global demand out pacing production the shortage in Kenya this year only exacerbates the bigger issue.
Read the full article at All Africa Here.
Africa: Kenya and Ethiopia Making Major Strides
September 13, 2007
Kenya — The International Finance Corporation (IFC), the branch of the World Bank responsible for private lending, is investing a little over $210,000 in educational programs to increase the knowledge base of local coffee farmers and roasters. The 5 day training seminar will teach the basics of cupping and quality control. The goal is to bolster local coffee producers’ understanding about the quality of their product as well as provide the tools they need in order to demand higher prices on the open market. As Dr Peter K Michori, chairman Coffee Board of Kenya, puts it:
“When Kenya coffee is subjected to specialty grade assessment methods and certified, it will fetch better prices in the international market …”
Ethiopia — Dozens of European and American roasting and distribution companies have finally agreed to use Ethiopia’s specialty coffee trademark. Chief among US companies was The Coffee Co. that shall not be named, which had earlier filed suit to prevent the country from protecting its own property rights. Now the struggling African country will bear a greater responsibility for the logistics of its primary export. However, with a renewed sense of pride and ownership the coffee can only get better.
Read the full articles here and here.
The NY Times on ‘Direct Trade’
September 12, 2007
The New York Times has a fascinating piece today on Direct Trade coffee companies.
In the past few years, big coffee companies (e.g., Starbucks, who buys roughly 300 million pounds per year) have started marketing “Fair Trade” and “organic” coffees. Many customers have no problem shelling out a bit more for beans that were more thoughtfully and carefully grown. Yet, these labels - or even the methods - offer no guarantees for the actual flavor or quality of the beans. Even more recently this has given rise to Direct-trade coffee companies such as Stumptown and Intelligentsia and others, who buy their beans directly from the farms and cooperatives that grow them (i.e., not from brokers).
This gives the relatively small roasting companies an unprecedented relationship with coffee farmers, and thus unusually direct control over the quality of their coffee offering.
“It’s an exploration of coffee’s flavor, really” is how George Howell explains his mission. Mr. Howell, who runs George Howell Coffee Company, a roaster based in Acton, Mass., has had a hand in practically every lurch forward in the quality coffee scene since he started out in the business in 1974. “We’re finding flavors we’ve never ever tasted before, different fruit and floral flavors from really pristine, clean coffees. These are flavors that have been lost or diluted in the old methods of blending coffee down to an average product.”
In many ways, the direct-trade roasters are building on the foundation laid by companies like Peet’s and, later, Starbucks, which went outside the commodity system to find superior coffee. But, Ms. Blumhardt said, those companies are too big to comb over every bean in every sack the way some direct-trade companies do. Starbucks bought more than 300 million pounds of coffee last year; Intelligentsia, the biggest of this group, bought 2 million pounds.
Direct Trade companies develop a unique relationship which goes beyond the basic buyer/seller. Duane Sorenson (owner of Stumptown) recently travelled to Rwanda, and after discussing the needs of the local coffee growers, started a nonprofit group called Bikes to Rwanda. This April, 400 bikes specially engineered for carrying heavy loads of coffee over hilly Rwandan terrain were delivered to the cooperative just in time for the harvest.
“It’s not charity,” he said. “Our producers invest back into their workers, coffee shrubs, equipment and land. We know this is happening because of all the time we spend with them throughout the year, on their farms and in their homes.”
The entire article is a great read. Go check it out and while you’re there, view the From Cherry to Cup slideshow.
(via Grendel)
