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Coffee Holding Company, Inc. Message Board

  • argyle46 argyle46 Apr 26, 2014 3:44 PM Flag

    Starbucks has halted purchasing coffee

    This is what I expected, as Starbucks has a large inventory of coffee beans. However, they are halting purchases in hopes that prices will go lower. This is a MAJOR miscalculation in my opinion as the coffee crisis will only get worse and prices today will seem cheap in a few months. Here's the story:

    " The worst drought Brazil has seen in fifty years is pushing coffee bean prices to new heights. As a result, Starbucks, the largest coffee company in the world, has halted coffee purchases over the past few weeks, the Wall Street Journal reports.

    Brazil is the world’s largest producer of coffee. Arabica coffee futures, the most common bean variety sold in the US, have soared nearly 90 percent over the past year, and reached the highest price in two years on Tuesday. The surge was prompted by estimates that Brazil’s arabica crop, which was decimated by this year’s drought, will miss expectations by 18 percent. Overall, the world’s harvest is expected to fall short of demand by 11 million bags, — meaning coffee lovers may be forced to pay more for their morning cup.

    Besides destroying coffee crops, the prolonged drought has wreaked havoc on Brazil’s water and electricity supplies. Now, the nation is bracing for El Niño, which promises an epic downpour that will be even worse for bone-dry coffee plantations. Some regions may lose over a third of their crops.

    Starbucks’ head of coffee told the Wall Street Journal the company has no current plans to raise prices, and is simply waiting to see if the price surge will subside. But if prices stay at their current exorbitant levels, Starbucks — and their customers — may have to accept a new normal

 
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