Good news, finally coffee prices are starting to fall. Consumers of Jamaica Blue Mountain Coffee will see a 10% reduction in the price going forward. Of course there is one proviso: That weather conditions will remain. Specifically the absence of hurricanes, and there’s one looming in the Caribbean Basin as I text. It seems hard to believe that right now it’s a buyer’s market when just a year-and-a-half ago farmers could get as high as J$13,000 a box of coffee. Now farmers are being offered $6,000 a box. Naturally most farmers do not want to sell but they’re caught in a dilemma because if they don’t sell now the ripe red coffee cherries will rot and die. There’s only one processor that is buying now and that’s Mavis Bank coffee. As a result Farmers have been protesting. They do not want to sell their beans for half its worth.
Buy now before end of September, and get a 10% discount as Paypal partial refund.
The price of Jamaica Blue Mountain (JBM) coffee jumped so much in 2015 that it now rivals the price of Kopi coffee and outpriced itself from Hawaiian Kona, but what goes up comes down.
Coffee bars around the world historically offer Kona and JBM at roughly the same prices . The 2015 local coffee shortage and rise in Japanese demand changed that with JBM retailing at about $60 per pound from about US$35 a pound a few years earlier for quality beans.
It resulted in the wealthy huffing and puffing but still buying the luxury super-uber-yummy coffee from Jamaica. The regular rich however choose to drink tea instead ( Starbucks buys Teavanna ).
Jamaicamocha spoke to key dealers who predict the fall in price of JBM by 2017 due to reduced demand in Japan and ramp up in supply. “A large Japanese dealer stopped carrying JBM and other roasters in Japan are bailing and crying about the price,” said dealer A.
With the rise in prices for JBM every farmer’s son and grandson returned to till the soil. The rise in farmers on resuscitated lands will result in a jump in production and the magic number is 350,000 boxes for the crop year.
Hitting that target would put supply at a decade year high.
Another dealer said that JBM’s market is like a pyramid the higher the price the smaller the market. Simple economics dictates that price remains when demand and supply are in equilibrium: Yet demand is falling and the supply is rising.
Jamaicamocha believes on advise of dealers that the prices will fall back to about $45 a pound by 2017. Until then small poor farmers benefit. Dealers benefit and the discerning consumer gets his uber fix without counterfeits.
The Coffee regulator in Jamaica reportedly wants to further tax coffee imports to fund local production.
The Coffee Industry Board Jamaica (CIB) said the cess would finance local farmers.
“This recommendation to the minister was made after extensive consultations with the stakeholders in the coffee industry. The minister has publicly expressed his agreement with the proposal and he will, at the appropriate time and place, announce the amount of the cess and how it will be applied,” the CIB reportedly indicated to local media.
Jamaica’s coffee production has fallen to less than 200,000 boxes annually from a high of more than 500,000 boxes in 2004.
Jamaica Blue Mountain remains in short supply due to a confluence of factors now led by fires and the berry borer disease. Coffee exports totaled some US$13 million last year down from some US$25 million in pre-crisis levels.
The price of Jamaica Blue Mountain (JBM) coffee jumped 40 per cent in real terms in a year based which worries Marley Coffee.
Coffee remains scarce based on a confluence of factors now led by summer drought which killed beans.
“We are committed to ensuring our supply chain and providing our customers JBM. We are diligently working to secure more JBM as the market we created for it continues to expand. There still is a high demand for JBM in North America, but limited supply and rising costs may hurt sales,” stated Marley Coffee to its investors this month in filings to the US Securities and Exchange Commission.
The sale of JBM beans largely gives the brand prestige, as the majority of Marley Coffee sales are from cheaper coffee growing regions outside of Jamaica.The company bought US$290,000 worth of JBM over nine-months ending October or two-thirds less than a year ago, financials state.
“We are currently working to address the supply issues and while we believe we will be in a far better position in Fiscal 2015 with respect to JBM availability,” noted the company.
Over nine-months the company recorded a US$7.8 million net loss from US$6.7 million in coffee sales or three times higher losses than a year earlier. Part of the losses are the result of payments to executives at Marley Coffee which surpassed US$1 million over three-months.
Marley Coffee based in Denver, USA, recently gained distribution in over 5,000 stores in North America, with plans to enter 10,000 stores.
Coffee Roasters Jamaica (CRJ) led by the Fletcher family started selling its own single-serve k-cup Jamaica Blue Mountain coffee pods in December.
Its aimed at targeting the fastest-growing segment of the US coffee market. Mark Fletcher, chief executive officer, hopes that the k-cups will grow overall revenues at the company already benefiting from a one-third rise in exports year on year. The company has already sold about 100 k-cup cases in the US.
Few local companies sell their own branded single-cup brewed coffee. Its due in part to the focus on selling green beans to Japan and the industry’s sporadic sales to US which heavily demands k-cups.
CRJ and sister company Country Traders Ltd recently got a renewal inspection for Hazard Analysis and Critical Control Points (HACCP).
Good coffee costs up to US$8 a cup in Eastern Europe. Among the most expensive globally. So the fact that Russians and Ukrainians flock for bargain luxury coffee deals online is logical.
Nothing like the chocolatey aroma and lemon hints aroma of a balanced Blue Mountain cup to warm the bitter winter. Even better when a cup effectively costs US$3 because it eliminated the middle-man.
But what becomes illogical is enjoying coffee in conflict.
Putin’s intervention influenced a spike in global oil prices–the most traded commodity. It increased some 10 per cent February to March to US$104 a barrel (amid fears oil rich Russia would plug gas and oil pipelines running through Ukraine).
However the second most traded commodity–coffee also saw a rise during the same period (February to March) albeit a much higher spike up nearly 2/3rds from 120 to 196. Its blamed on drought in Brazil among the largest coffee producing nations.
It however is happening amid the heightened Ukraine conflict. It will no doubt result in a more expensive cup of coffee for this region.
Despite this impact–the true tragedy is death and conflict and not the cost of a caffeine fix.