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Coffee Is Too Cheap!

From the desk of the roaster

 
So green coffee prices on the New York Coffee Exchange, where it all happens, have gone up (in US cents/pound) 72% year-on-year Nov.2023 vs. Oct.24. This is just the tip of the iceberg. Previous trends were also up-and-upwards. If we add the effect of the 5-year history of the USD/ZAR exchange rate; ever-increasing logistics costs, local and international; industry shortages and the resultant need to carry more of this expensive stock; general inflationary costs and a lot more, these price increases have been HUGE! Coffee, at every link of the supply chain,now costs the consumer more than double it did just a short two or so years ago!
 

Is coffee now too expensive or was it too cheap in the first place?

 

Let us take a 300ml fizzy drink, a chemical concoction, made in a local factory and selling at around R11. One typically uses 16G of coffee in a cappuccino, our most expensive beverage option. At average RSA retail roasted-bean prices (Nov. 2024), 100% Arabica from reputable roasters, this 16G costs the consumer +/-R5.50… add milk and sweeteners and the entire drink, still comes in at less than R10. Pretty much the same as the aforementioned fizzy concoction. As compared to the fizzy-factory process, the humble green coffee bean was grown by a farmer thousands of miles away; cleaned, graded and
processed at a farmers co-op or depot; bagged and loaded into a container; shipped for miles and miles… by-passed war-zones andhijackers, incurring import tariffs and duties, insurance and logistics costs. When it finally arrived on our shore it had to be stored before being traded and shipped to roasters far-and-wide; roasted by skilled artisans using very expensive technology; bagged and boxed before reaching the consumer. One can but conclude that …..

Coffee would be a bargain at double the price!

"I have been personally shocked and embarrassed by these increases…but after researching and writing this blog, to be frank, is coffee not perhaps still under-priced, all things considered?" - Alan Hawkins

PS: To all our coffee lovers out there, folks, we just have to get used to this … things have changed.