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Coffee prices on the rise

Rachel Dornhelm Nov 13, 2006
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Coffee prices on the rise

Rachel Dornhelm Nov 13, 2006
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TEXT OF STORY

MARK AUSTIN THOMAS: You might want to sit down for this news: The price of that can of coffee that you buy at the grocery store could be going up. Rachel Dornhelm has the story.


RACHEL DORNHELM: Coffee futures for December shot up recently, hitting a six-month high on the New York Board of Trade.

The spike could percolate down to consumers of supermarket brands before it hits fans of specialty labels.

Coffee roaster Chuck Jones says that’s because companies like Maxwell House operate on tight profit margins. Retailers like Starbucks, he says, have bigger margins so they’re better able to absorb fluctuations.

CHUCK JONES: So you might not see an immediate effect in the cup of the latte as much as you might see an effect in the two pound can of Yuban.

Jones says commodities traders keeps their eye on a few main coffee cycles. One that’s 30 years, one that’s annual and one that’s pegged to freezes in Brazil. He says when the downturn in multiple cycles overlap, that’s when prices go through the roof.

I’m Rachel Dornhelm for Marketplace.

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