Coffee Prices on the Rise

5 03 2011

Ah yes, the morning drink. Only recently have I discovered how wonderful it truly is. And as of late, prices have been soaring and it isn’t just because of the spring tradition of Roll up the Rim to Win. The price of Arabica coffee, alone, has increased 48% within the last few months.

Authorities on the issue say that there are two reasons for this. First of all is the ever increasing demand for coffee, especially of high-quality. The global population is in a growth trend so therefore more coffee drinkers (number of buyers), and more members of developing markets (ex. China, India, Brazil) are starting to desire this good. Secondly, supply of coffee has decreased due to poor harvests. The world’s greatest producer of coffee is already forecasting low yields of low quality beans. This has to do with the number of sellers, or in this case the farmers that were able to produce proper yields within this year. Since less producers where able to rack in their typical yields of coffee, the supply has decreased. Both these factors contributed to a higher equilibrium price and the change in quantity which is slightly ambiguous.

As a result, the price of purchasing a nice warm cup of Joe has gone up globally.

Article: http://online.wsj.com/article/SB10001424052748703559604576174841918967636.html

Advertisements

Actions

Information

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s




%d bloggers like this: