Behind Coffee Price Spikes & Zoka Family Direct Trade

As some wise person in pursuit of the truth once said, “Follow the money.”

Interesting piece on western coffee drinkers likely reactions to increasing coffee prices. Entirely anecdotal, and there are people for whom the price will make a difference in their consumption habits, but the average Bloomberg reader probably doesn’t know many of those people.

While prices probably won’t go up that much just yet, pressure is growing on the $80 billion U.S. coffee industry as the cost of arabica beans used in high-end brews skyrockets. Futures in New York jumped 87 percent this year to $2.0665 a pound. By May, they may reach $3, the highest since 2011, said Judy Ganes-Chase, an industry consultant in Panama City, Panama, who has been analyzing the market for three decades. — Bloomberg.

Don’t be fooled. Just because *commodity* prices are going up, those price increases, dollar for dollar, aren’t necessarily making it all the way through the supply chain. In the commodity markets, there are a lot of hands out collecting their vig on the volatility in pricing.

This cycle repeats itself pretty frequently — for every spike there seems to be a swoon. Though part of the higher prices does make it back to the farmer, the certainty of continued volatility hampers the enjoyment of those temporary hikes.

Zoka Family Direct Trade, and the direct trade/specialty coffee market in general, try to get off that treadmill by buying high quality coffee at consistent, fair and almost always well above market prices. In addition to more money today, this alternate supply chain, free of financial speculation, creates a higher degree of certainty for all involved.

All of that said — it is lovely to see how devoted to their coffee so many people are. We are too — for lots of reasons — many of whom have names, faces and families.