Your cup of coffee is set to cost more, courtesy, the drought in Brazil.

Reports of severe dry weather impacting this year’s Brazilian crop have sparked a sharp rally in coffee prices over the past few days and domestic raw coffee prices have moved up in tandem. Global prices — mainly of the Arabica variety — have risen by 45 per cent in the last one month.

As a result, small and mid-sized domestic roasters, who sell roast and ground filter coffee powder, are thinking of passing on the burden to consumers by increasing prices. This is because of export demand for Arabicas driving up farm-gate prices. India exports two-thirds of nearly three lakh tonnes of coffee it produces every year.

At the weekly auction on Thursday, prices of key grades of raw coffee were up by ₹30-40 a kg, an increase of almost 20 per cent over the previous week.

No option

“Roasters have to increase prices by 20-30 per cent, else quality will take a hit,” said BS Suryaprakash, CEO of Coorg Coffee Supplies, a Bangalore-based roaster and exporter.

“It’s a tricky situation. If we increase the price, there is a chance of losing customers. If we don’t, we’ll have to incur losses as the rise in raw coffee prices has been pretty steep,” he said. Coorg Coffee, which retails powder and speciality blends under the same brand, has already effected a price hike of 20 per cent, he added.

A little over a third of the 300,000 tonnes of coffee produced in India is consumed domestically. The annual growth in consumption is around six per cent, with coffee drinking becoming fashionable among the younger generation through the spread of the café culture.

“This price rise is unprecedented. If the market stays at the current level, we don’t have any option but to increase prices. We will take a call on revising the prices over the next couple of days,” said Shrikant Rao, Director at Bayar’s Coffee.

Watching developments

However, large companies such as Tata Coffee are cautious in reacting to the price rally. “The market has gone up in the past four days. We have to study the market before taking a call on prices,” said Hameed Huq, MD of Tata Coffee Ltd, the country’s largest coffee grower.

Moreover, the lower-than-expected crop size back home is seen supporting prices. The Coffee Board has lowered its estimates by about 10 per cent, pegging the current crop size at 3.1 lakh tonnes as untimely rains in Karnataka, the main producing state, has shrunk the crop. However, growers harvesting their produce said the crop is much lower than the Coffee Board’s estimates.

source: http://www.thehindubusinessline.com / Business Line / Home> Markets> Commodities/ by Vishwanath Kulkarni / New Delhi – February 21st, 2014

Through out the international coffee conference all over the world , Japanese coffee traders classified Yemen as the homeland of coffee and the first source of the coffee tree in the world. The Japanese adore coffee, much akin to westerners’ passion for wine. Despite its small quantities, the quality and price of Yemeni coffee have earned it a special category in the Japanese coffee market. The sole coffee store in Tokyo that serves Yemeni coffee offers cups from $15-$19.

Ibrahim Moka is an organization in Japan consisting of 22 members. It is also a coffee brand, whose name derives from a Yemeni entrepreneur who found himself in a position to respond to Japan’s interest in Yemeni coffee.

Over the past five years, the 22 members of the Ibrahim Moka association visited Yemen in order to learn more about the reality of the coffee farms and growing regions in Yemen. “Driving to Bani Ismael far atop the Haraz mountains, the group crossed 9km in 7 hours, pushing off-road through hard, mountainous terrain,” said Ibrahim, one of the group’s hosts. “We were traveling in an old Toyota Land Cruiser, and we eventually reached a point 5500 feet above sea level. Once we safely concluded our journey, the head of the Japanese team said, ‘we do not have these cars in Japan, but they were made for Yemen’s mountains.’”

While the trade volume of Yemen coffee to Japan does not reach levels of commercial profitability, Japan is still the major importer of Yemeni coffee. Three business companies in Yemen find the Japanese market very attractive to develop their business with Japan. Al-Kabous reported that their company exports between 150,000 – 160,000 tons of Yemeni coffee quarterly. Recently, al-Kabous shipped 142,000 tons of coffee to Japan.

In 2005, Ibrahim Moka paid a visit to Japan, where he visited a 200 year-old coffee shop in Tokyo. He also visited the affiliated museum. “I am a coffee businessman, but during my visit to the coffee museum, I was impressed by the layout, design, courtesy and presentation in the museum” said Ibrahim. The visit included a coffee-tasting session in which each person is entitled for 2 small cups of coffee.”

Ibrahim had the chance to visit the Japanese coffee association, which consist of 270 members. At the meeting, he presented Japan with a map of the history of coffee growth in Yemen, including its rises, falls, and challenges. Ibrahim came to know the good reputation of Yemen’s coffee in the roadmap of the coffee business in Japan. The Coffee museum even contains Yemeni post stamps reflecting coffee trees as a promotional tribute to Yemeni coffee.

“The price of coffee increased because of packaging and product selection. Buyers were looking to Yemen as the source of coffee, and for the love of coffee the Japanese designed specific pricing categories,” said Ibrahim. Yemeni coffee ranked first in terms of quality, though Jamaican coffee wins in terms of packaging. Yemeni coffee lacks certain final touches, but despite this it is still the most expensive coffee in Japan.

Over the past years, the Japanese coffee association has sought opportunities to help Yemeni farmers to increase coffee yields. “There were many Japanese associations working in Yemen on this task, and they tried to offer Yemeni farmers special tools to improve the quality and quantity of coffee they could produce. This even included offering training courses to the farmers and vendors,“ said Ibrahim. Recently, Yemen has had even more problems with its coffee production due to the political turmoil.

When we look to the past, we see a Japan very much involved in Yemen. They would spend days in tours of the old city, and some diplomatic missions would visit Sana’a’s hot baths (also known as the Turkish baths).

Japanese investors and visitors continued supporting Yemeni women in rural areas and they provided Yemen with equipment to support farmers in the rural areas as well. Ibrahim concluded, “I like Japan very much, and I have seen that each thing in the world has a place in Japan. I like the politeness and humility of the Japanese community.” We hope that Yemen can enjoy more of this country and its wonderful people in the future.

source: http://www.nationalyemen.com / National Yemen / Home> Business & Economics / December 08th, 2013