Coffee price

[Ann]

https://247wallst.com/commodities-m...nt-translate-to-cheaper-coffee-for-consumers/
Why Lower Coffee Futures Prices Won’t Translate to Cheaper Coffee for Consumers

Well thankfully that isn't true at my supermarket!
I just bought a 400g jar of Moccona coffee for $14 that is $2 cheaper than I have ever been able to buy it before. Thankfully my Robert Timms coffee bags regularly go on special for half price. If anyone has not tried these, they are awesome especially the Italian Espresso and so convenient.

 

[MARKETWINNER]

Hi Ann: Thank you for the kind response. My coffee drinking pattern has changed vastly. My mum used to make coffee from roasted coffee beans. Then I got used to instant coffee as it was very convenient. Now I am with pre ground coffee but I mainly drink Tea. For me ground coffee is better than instant coffee. If I am right roasted coffee are the best.

Well thankfully that isn't true at my supermarket!
I just bought a 400g jar of Moccona coffee for $14 that is $2 cheaper than I have ever been able to buy it before. Thankfully my Robert Timms coffee bags regularly go on special for half price. If anyone has not tried these, they are awesome especially the Italian Espresso and so convenient.

 

[noirua]

 

[Ann]

"Arabica Stockpiles Experience Largest Plunge Since '98 Amid Severe Shortage

The supply deficit of arabica coffee beans (something we first warned in March and later explained in May) is becoming more severe as certified warehouses of the premium coffee bean monitored by ICE Futures U.S. plunged.

Stockpiles of arabica coffee beans in ICE warehouses plunged 10% last week, the most significant drop since August 1998. Outflows from warehouses logged their 10th-straight weekly drop, a reflection of tight global supplies. Arabica coffee prices have more than doubled since we first mentioned the onset of the supply crunch."

ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero

www.zerohedge.com

I looked up what the difference was for Robusta compared to Arabica....

10 differences Between Robusta & Arabica Coffee

You may have noticed that some coffee bag labels brag about the fact that their coffee beans are 100% Arabica. Although it does sound like something magicians say, it isn’t gibberish – it refers to the type of coffee species in which the beans are from. There are over 100 coffee species, however...

theroasterspack.com

 

[rcw1]

Good morning

I read this article this morning (08/12/24) has good application with this thread ... and coffee lovers like rcw1.

Have a very nice Sunday.

Kind regards
rcw1

Alex Gluyas
AFR Markets reporter
Updated Dec 4, 2024 – 4.31pm,first published at Dec 3, 2024 – 8.13pm

The surge in coffee prices to the highest level since 1977 could force more consumers to save money by making their daily brew at home, in a boon for ASX-listed small appliance maker Breville.


That is according to Citi analysts who warned the rally in arabica futures, which hit a 47-year high of $US3.35 a pound on Friday, will result in higher costs for cafes that would likely be passed on to consumers. Nestlé, the world’s biggest coffee maker, said last month that it would raise prices and make packs smaller to blunt the impact of the more expensive beans.

Arabica prices jumped more than 30 per cent in November.
Arabica – the main type of coffee consumed in Australia – has surged about 70 per cent this year, making it one of the strongest performing commodities alongside cocoa, for which prices have more than doubled.
Citi said this would be positive for the at-home coffee market as it may bring new customers to the category, benefiting Breville given the popularity of the coffee machines it sells.
“The price of coffee at cafes around the world is at risk of rising from here, which could be positive for Breville as consumers may be more inclined to start making coffee at home to save money, particularly given ongoing cost-of-living pressures globally,” said Citi analyst Sam Teeger.

Shares in Breville have rallied 32 per cent over the past six months, helped by a bumper result in the 2024 financial year. Robust coffee machines sales in the US boosted Breville’s revenue to a record $1.53 billion and propelled earnings to the top end of guidance for the period.

Citi acknowledged that higher coffee prices could take longer to filter through to Breville than other brands given its “premium market position” – their coffee machines are typically the third or fourth brand that consumers buy.


Still, the broker has a price target of $36.51 on the stock, an increase of 7.5 per cent from current levels.

Perfect storm​

The rampant rally in coffee, one of the most traded commodities in the world, has been fuelled by concerns about adverse weather in top producer Brazil. The country experienced its worst drought in 70 years during August and September, followed by heavy rains in October, sparking fears that next year’s flowering crop could fail.


In June, the US Department of Agriculture forecast 2024/25 coffee production at 69.9 million (60kg) bags. But their latest update last month reduced that figure to 66.4 million bags, with further downgrades expected when Brazil’s National Supply Company releases its next update.

Prices of the cheaper robusta variety of coffee have also surged 86 per cent this year following a challenging growing season in top producer Vietnam. The country was hit by dry weather at the start of the season and heavy rains as the harvest started.

Coffee is grown in a relatively narrow tropical band, with key producers including Brazil, Vietnam, Colombia, and Ethiopia. This concentration makes it vulnerable to adverse weather, especially in Brazil and Vietnam, which together account for around 56 per cent of global production.

“The rally [in coffee prices] has been driven by several factors, the most important being the risk to supply triggering panic buying from commercial buyers worried about shortages,” said Saxo Bank’s head of commodity strategy, Ole Hansen.

“Front loading of sales to the US ahead of potential tariffs may also play a part.”

 

[galumay]

Its interesting that the reported price increase has not flowed though to wholesale prices, let alone retail. As a commercial coffee roaster I can report my price for green beans from my supplier is unchanged for the last 2 years.

 

[qldfrog]

Its interesting that the reported price increase has not flowed though to wholesale prices, let alone retail. As a commercial coffee roaster I can report my price for green beans from my supplier is unchanged for the last 2 years.

I shoul buy some more at shopping today

 

[rcw1]

Good morning
Some more startling news for coffee lovers... like rcw1:

Published today by Rosie Gail, (04/01/25) via New Corp Media:

A cup of coffee is tipped to push $12 by the end of 2025, driving 30 per cent of Queensland cafes to the wall. Essential Coffee NZ and Australia CEO Todd Hiscock said coffee beans were under increasing demand while producers struggled with massively depleted supplies, sending prices through the roof.

“There’s a widely held view in Australia that coffee is currently being sold for up to 50 per cent below what it should be,” Mr Hiscock said. “Severe drought and then heavy rains in the biggest coffee bean producing areas in the world have catapulted the price of coffee beans to their highest level on record. “It’s simple economics – supply and demand. “I predict that in the next 12 months the price of a cup of your favourite brew will rise to around $10 to $12 a cup and the skyrocketing cost of beans will likely force 30 per cent of Queensland’s cafes to close.”

He said the price for Arabica beans, which accounted for most global production, recently topped $3.44 USD ($5.55 AUD) a pound (0.45kg). The cost of Robusta beans, the next tier of bean quality, hit a fresh high in September. “That’s a massive 80 per cent increase this year,” he said. “Even global companies like Lavazza and Nestle have indicated they are poised to lift their prices significantly. “The costs that go into making a cup of coffee include milk, beans, labour, cost of cup, rent, electricity, cleaning, insurance etc. “Cafes work on a skinny margin and will have to pass on the price. It’s not sustainable to do otherwise. ”Rafiki Cafe owner Tobias Diamandopoulos has been in the industry for 16years, but admits the current challenges are some of the toughest he’s faced. While he hasn’t yet raised coffee prices at his cafe, he said it’s only a matter of time. “Eventually, we’ll be pushed to have to up our prices,” he said. He said his focus will be on changing other parts of the business first, so he can keep his coffee competitive. “I try and work the rest of the menu first to see where there’s room to make a saving before going to that daily cup of coffee that everybody has, ”he said.

Mr Diamandopoulos said the rising costs will put immense pressure on cafes. “It breaks my heart but unfortunately these expenses are going to get out of control for some people and it’s going to be very hard to survive that,” he said. “There’s so many hidden expenses for cafe owners, and people just see prices increasing on menus and think people are just getting greedy, but at the moment it’s tougher than ever to do business. “Everything is costing more and more, and none of the cafe owners want to be upping the prices because it does deter customers."

Hot Shott Cafe owner Jenna Rolfe said her biggest concern is higher prices will push customers to brew their morning coffee at home. “We have to put the price up to survive, but we can’t put it too high that people don’t come, and that’s the game we play,” she said. She has already had the tough conversation with her supplier, Supreme Roasters, and said an increase in coffee prices is inevitable. “They’re copping as much of the increase for as long as they can, but at the end of the day, they’re running a business,” she said. “They’re expecting it (the price) to jump phenomenally, in which case my coffee roaster will be putting up our price of coffee per kilo and we go through about 150kg a week. ”Ms Rolfe said she plans to introduce a small increase and monitor the impact. “I would do a 50 cent increase to start it off and see after a month where it needs to be,” she said.

Mr Hiscock said the much-loved cafes with their trained baristas will “inescapable process of putting up the price of the morning brew”. “I can only see demand for coffee going up as the global population increases,” he said.

“We’re seeing China with its 1.5 billion population coming into the market as they increasingly shift away from tea, replacing it with coffee.” Coffee is one of the most widely consumed beverages in the world.

Have a very nice weekend.

Kind regards
rcw1

 

[galumay]

I saw the same nonsense article linked elsewhere. As a commercial roaster I can tell you we have still seen no increase in the price of coffee to date, no doubt there will be price rises this year but the numbers he uses make no sense to me.

A cafe can make good money selling coffee for $6 now, if I DOUBLED the price of my beans, the cost for a cafe to make a cup of coffee would go up about $1using my beans. I am a high end roaster and my coffee is expensive so this is much more than the impact on most cafes using cheaper bulk, lower quality coffee.

 

[divs4ever]

I saw the same nonsense article linked elsewhere. As a commercial roaster I can tell you we have still seen no increase in the price of coffee to date, no doubt there will be price rises this year but the numbers he uses make no sense to me.

A cafe can make good money selling coffee for $6 now, if I DOUBLED the price of my beans, the cost for a cafe to make a cup of coffee would go up about $1using my beans. I am a high end roaster and my coffee is expensive so this is much more than the impact on most cafes using cheaper bulk, lower quality coffee.

.. if my mum was still alive today ( and we still owned the property in Brisbane ) maybe we could have had some interesting chats

however i have mostly stopped drinking coffee , but an interesting insight into to cafe industry

if you are correct in your figures .. one might ask why ( some ) coffee franchises are struggling ( places like RFG ) ( or are they milking the public sympathy )

 

[galumay]

if you are correct in your figures .. one might ask why ( some ) coffee franchises are struggling ( places like RFG ) ( or are they milking the public sympathy )

I think a couple of things at play, the story itself is typical NewsCorpse, they love a struggling cafe owner giving them economic insights! Also like any very small business, you have lots of people owning them who have really just bought a job and have very little understanding of running a business. The coffee itself is high margin product, but its probably the other costs that determine how well you do.

My figures are very conservative, I sell my coffee to commercial customers for $45kg, (more than most cafe's would be paying for the lower quality beans they use), based on 20g per coffee (allows for waste etc), that is 50 coffees per kilo, so call it $1 per cup. So as I said, if I doubled my price the cost to the cafe goes up by about $1 per cup.