You may have read in the news in recent weeks that green coffee prices have skyrocketed to historic highs. The industry has been affected by a combination of factors that have seen arabica coffee prices literally double in the last 12 months. Reasons for this include recent unpredictable weather conditions in Brazil and Vietnam (the world’s two largest coffee producers), rising shipping costs, the threat of trade tariffs and a depletion of global stocks as demand outstrips supply.
While historically coffee prices have often been too low for producers this dramatic sudden surge in the market price has created turbulence and uncertainty throughout the coffee industry. The ‘C price’ that sets the market price for arabica coffee is subject to speculation on the New York Stock Exchange and although traditionally speciality coffee isn’t massively affected by fluctuations in the C price (as we’ve always paid more for quality and traceability), this unprecedented market shift is affecting the whole industry. Many smaller exporters and importers are being especially hard hit as they are struggling to finance the purchase and shipping of greens from origin countries. And for roasters it’s not a question of ‘if’ but rather ‘when’ we will all have to put up our prices accordingly.
At Glen Lyon we had initially hoped to absorb much of these rising costs but these unprecedented prices have made it impossible for us to maintain sustainable margins and there is no sign of prices settling down anytime soon. Our commitment, as always, is to provide our customers with the best coffee possible while ensuring sustainability for both farmers and our team. As a result we will have no choice but to increase the cost of our coffees in the coming months.
We hope that the price volatility in this increasingly uncertain world will eventually settle and we are committed to track our prices back down to follow our green expenses as and when they come down. It is also entirely possible that as climate change affects harvests across the equatorial regions we may have to accept that coffee is going to increasingly become a finite commodity that commands higher prices than we have been accustomed to.
