Coffee Price Rally to Continue

Bewley’s Paul O’Toole discussing coffee prices on Newstalk Breakfast Show on 6th July 2010

“The current rise in coffee prices on global commodity markets is due to speculative trading in coffee futures. Coupled with a possible shortage in global coffee supplies, it seems likely that these rising price levels will be sustained. This is against a backdrop where coffee prices on the high street have remained relatively stable since 2008,” Bewley’s Master Roaster Paul O’Toole said today (Tuesday 6th July, 2010).

Paul outlined the situation to Newstalk’s Business Correspondent Conor Brophy. Listen to the interview below.

Alternatively, download Paul O’Toole’s Newstalk interview.

Paul commented that the recent rally in coffee prices has caught a lot of people by surprise. “The main reason for coffee markets firming up over the past two weeks is technical in that it’s to do with speculative commodity trading,” said Paul. “However, there is also the possibility of a coffee supply shortage.”

“In June, coffee futures on the New York Coffee Exchange (the ‘C’) reached their highest level in two years. But they are also as high as they have been for twelve years. We’ve seen about a 25% spike in coffee prices since the start of June.”

“At Bewley’s we are conscious of the economic pressures that exist and we will do everything we can to hold off on price increases and to minimise the extent of any price increases that arise. That being said, we buy the very best of coffees, we won’t compromise on that and the price of those high quality coffees has substantially increased recently.”

“It does seem inevitable that, as forward coffee contracts run out, the coffee trade and consumers may experience price increases towards the end of the year or early in 2011. We hope that conditions will stabilise, but if the current upward trend continues then you could be looking generally at high street increases of around 3 to 5 cents per coffee.”