November Price Changes

We have raised the prices on selected items today, and here is a little background explaining why. The increases affect mostly prepared coffee beverages (brewed coffee, lattes, etc.) and a few food items. For example, the price on our medium and large coffees is now $1.90 and $2.09 respectively.

These increases are the direct result of the impact of record prices achieved on the international market for green coffee witnessed over the past year. The market doubled from its position at an historically ‘normal’ $1.50lb in June 2010 to an astonishing high of over $3.00/lb in May 2011.  As a premium specialty coffee buyer of fairly traded and organic coffees, we have always paid above-market for coffee, and this continues to be true in the current market.

The significant increases in the commodity market have largely been the consequence of heavy investment by in the commodity markets by financial institutions. One theory is that the bulk of the price increases are a consequence of investors favouring commodity packages, including coffee, over investing in the US dollar. The markets have begun to calm down somewhat over the past two months; however, they remain volatile and unpredictable.

The high prices for green coffee only started to affect us in July of this year, when we first began to receive coffees contracted under the very high market. By the end of September we had migrated almost entirely to coffees purchased under these market conditions. Through the remainder of the year we are expecting to see a sustained increase in coffee costs of approximately 18%-20% over the beginning of the year.

We expect the high price levels for raw coffee to be sustained in the long term as demand for coffee rises significantly throughout the Southern and Eastern Hemispheres. While we are always reluctant to move forward with price increases, there is some room for celebration here as higher coffee prices are resulting in significantly higher revenues for the vulnerable producer-exporters who supply the world with coffee both within the Fair Trade system and the conventional trade. These higher prices directly relate to the prices received by coffee farmers, who have seen the potential for profitability in coffee farming rise dramatically over the past year.

Thank you for your continued support.

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