Tag Archives: commodities

Market News: Crop Fears Drive Kenyan Coffee Prices

Source: Agrimoney.com

The coffee industry has been experiencing incredible upward pressures on ‘C Grade’ prices over the past year.  The specialty coffee market is facing even more acute pressures as demand surges and supply is scarce.  Nairobi’s Coffee Exchange illustrates the scenario playing out in specialty coffee hotspots globally with the recent sale of one 340kg lot of premium AA for $1,011 per 50kg bag (approximately US$9.20/lb) in country! Applying standard export mark-up premiums to such a large purchase, assuming a US specialty coffee buyer was interested, could fetch anywhere between $30-60 a pound for this same coffee by the time it retailed in the United States.

Agrimoney Article Begins:

Could coffee become more valuable than your average base metal?

It is beginning to look that way – at least for top quality arabica beans in Kenya, where dry weather has dashed hopes of a production rise this season.

A lot of premium AA grade coffee sold at the Nairobi Coffee Exchange on Tuesday for $1,011 per 50kg bag, 40% higher than it was achieving last month.

The 340kg lot originated from a central Kenyan growers co-operative, Kiomothai, and was bought by East African specialist C Dormans, which sells to foreign markets besides running a chain of Kenyan coffee shops.

Dornams paid the equivalent of more than $20,000 tonne, making the coffee more than twice as expensive as copper, and approaching the levels that the likes of aluminium, nickel and tin trade at.

‘Outlook robust’

The price reflected the dearth of high quality beans for sale, Daniel Mbithi, a Nairobi Coffee Exchange official, said.

“There is no coffee and the market is grabbing the few available offers,” he told Reuters, the news agency, adding that “the price outlook remains robust going into the coming weeks”.

“Supplies remain tight.”

Production downgrade

Kenya, unlike some other African countries, has suffered poor coffee growing weather with unusually late and heavy rains early in 2010 damaging flowering before dry conditions later in the year damaging yields of fruit which did set.

The Kenya Coffee Board on Monday cut to 40,000 tonnes its forecast for the country’s coffee output in 2010-11, from a previous forecast of 49,000-55,000 tonnes, and leaving the crop on track to fall short of the previous season’s output of 45,000 tonnes.

The influential International Coffee Organisation last week lifted its estimate for world coffee production this season citing better weather in many major African producing nations, with the likes of Ethiopia, Tanzania and Uganda enjoying improved conditions.

In New York, arabica futures for March delivery stood 1.0% higher at 234.60 cents a pound, equivalent to $5,172 a tonne, at 11:45 GMT


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Official Release… “Cafe Hound”

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Dear Readers,

Over the past six weeks, we have enjoyed unofficially blogging on cafehound.com and have seen the development of the blog and its traffic from visitors “accidentally” coming to our blog. It has been a pleasure to offer diverse information accessible on our blog. Today, we take another important step and officially introduce to you cafehound.com.

What you will find on our blog is random but hopefully informative. As the blog’s name suggests, we are Cafe Hound. We search for the best coffee the world can offer. In Cafe Hounding section, you can read our reviews of cafes from the Pacific to the Atlantic. Coming soon, we will add reviews of coffee houses outside the US. We are also proud to present to you the exclusive interviews of “Who Is Who” in specialty coffee industry. We are honored to have Chuck Patton (founder and owner of Bird Rock Cafe Roasters in La Jolla, California) as our inaugural feature in this interview section. To be added to the list of fame are Eileen Hassi (founder and owner of Ritual Coffee in San Francisco), Michael McGuire (owner and roaster of K-Bay Caffe in Homer, Alaska), Timothy Castle (founder and CEO of Castle & Company, Santa Monica, California), and Karen Cebreros (founder and CEO of Elan Organic, San Diego, California).

Cafe Hound is not only the place you can get reviews and knowledge about your neighborhood cafes. We carefully select and present to you interesting news and upcoming events in coffee industry. Moreover, with our expertise in economics, finance, international relations, and public policy, we devote a section of the blog to analytical and educational issues related to every stage of specialty coffee production– from crop to cup, or from beans to brew. Currently, we proudly review an interesting article by Christopher Bacon of the University of California, Santa Cruz, on how organic, Fair-Trade, eco-friendly coffee could potentially help poor farmers in developing economies get out of poverty. Our main objective is to present to you the cutting-edge academic research on coffee-related issues in a non-academic language. Stay tuned for more of these geeky but exciting posts.

You may want to ask yourself why we, as an academic economist and a policy expert, fell in love with coffee and decided to devote our time to this blog. We have explained it all in the About the Hounds section. For those who have known us before, this section will give you eye-opening stories of the “dark” (but creamy and aromatic) side of our lives. We hope it entertains you and answers your curiosity.

You may also want to know what we expect from this blog. Well, first and foremost, we view this blog as our way to get us exposed to more people in the coffee industry. This is not only those working in the industry itself, but also those who are frequent customers of coffee houses and share our passion in great coffee. Please come join us in our journey to search for the best coffee. Please suggest to us where we should go “cafe hounding.” If you have favorite neighborhood coffee houses, feel free to share with us.

Finally, we realize there are several blogs and discussion boards out there covering coffee and cafes. Many of them are fantastic and comprehensive. By no means do we view our blog as their competitor. Instead, we think that our blog will offer something different, and provide you with both casual and more formal, semi-academic knowledge. The Cafe Hounding section does not rate the cafes (like yelp or other restaurant rating websites) but rather presents you with objective reviews of coffee houses that we carefully select. Most of them are mentioned by local coffee geeks as the “best in town” cafes or employ baristas who have made it to the final round of national or international competitions. The Interviews section gives you behind-the-scene stories about people in your neighborhood cafes and others in the industry that you may not have known before. Finally, the coffee.edu section takes advantage of our strengths and expertise in our main professions as an academic economist and a policy expert. It is very educational in a strict academic sense, i.e. very nerdy, but hopefully is exciting for those readers who are interested in more than just the taste and aroma of coffee.

And with this introduction, we officially proudly present to you… cafehound.com.

–The Hounds