In case you haven’t checked your receipts lately, an increasing coffee climate has driven up prices of your coffee over the past 6 months, and the futures market does not see any downward trend anytime soon. Being the number two traded commodity on the NYSE, coffee is subject to speculation along with supply and demand, and therefor like the fuel in your car is very volatile since we are relying on Mother Nature. Brazil is the largest producer of coffee in the world, and when drought speculation came through in March of this year, the increasing coffee climate began to boom.
The mention of a drought will send the speculators scrambling like people running to the store for bread and milk before a storm as if there won’t ever be anymore left ever. The immediate increases will be seen at the local roasters and coffee shops, while the giants such as Starbucks, Maxwell House and Folgers buy their supply a year in advance, however they are making increases as most articles are reading. This is of course driven by the forces of nature and the theory & facts that substantiate a global climate change. The increasing coffee climate is a double entendre in that is in fact the climate that is bringing about the increase in prices.
The Las Canoas lake in Tipitapa, near Managua, dries up every time Nicaragua is visited by the El Niño phenomenon
As Coffee Farmers ourselves, Reggie’s Roast Coffee is feeling the effects of El Nino in Jamaica, causing one of the worst droughts on record since the last round from El Nino. This situation is far more magnified since Jamaica provides a very rare coffee; .05% of the total global output. The leaf rust epidemic shorted last year’s crop by nearly 25% overall and the drought this year is sure to see an increasing coffee climate as the two largest coffee processors are run by the Jamaican Government and has had to increase costs as needed to sustain the Coffee Industry.
Other Coffee growing regions will of course be effected by changing climates as seen in the photo from Nicaragua, who also feels it when El Nino arrives. The changes are not always consistent, but will be there enough to begin to seek sustainable solutions including irrigation and better water storage facilities near crops. However those investments are not cheap, and the Farmers are paid in one day what most Americans pay for a cup of coffee every morning; yet another twist in the increasing coffee climate.
There are provisions in place such as Fare Trade opportunities for Coffee Farmers, government subsidies, and so on but ultimately their fate can be decided bu Nature alone which will ultimately see an increase due to shortage. Simple, the less supply there is, the higher demand goes as does the cost as we have seen with the recent drought in Brazil. As the increasing coffee climate continues it’s trend, it now becomes necessary to look further into the future to maintain our costs and keep coffee Farmers, processors, roasters and cups all around the World full & happy!