Friday, February 19, 2010

Where's My Colombian, Juan Valdez?

It turns out that coffee production is way down for the first 1/3 of the Latin American growing season.  Why does this matter? I suppose it doesn't matter much if you don't care where your coffee is coming from, but chances are if you're reading a COFFEE BLOG you're not one of those people. Prices will go up for the varietals experiencing lower production. When those prices go up, buyers will look elsewhere for more cost-effective purchases. This will be a valuable opportunity for less renowned coffee producing countries, like Honduras, to get their product out there.

Colombia's production is down, so is Peru and Costa Rica. We're not talking about menial levels of decreased output either. An article I read said, "The other six [opposed to the 3 increasing production nations] producers posted reduced output, including... Colombia (-33.6 percent), Peru (-26.9 percent), Costa Rica (-26.8 percent)...". Look for your local specialty coffee shop/roaster to begin carrying a surprising amount of the three increasing production nations.  "Only three nations in the group saw an increase in coffee production: Honduras (by 47.5 percent), Guatemala (by 18.1 percent) and Mexico (by 16.1 percent)." This bodes well for me since, according to my analysis, Guatemala has had some of the most balanced and palate soothing crops of the last 2 years.

Is it possible that the slump in production is tied to the slumping in demand? No, considering demand outstripped the supply in 2009 and is projected to do the same thing in 2010. This article even claims that coffee is the single best investment for 2009-2010; that's a big claim even if we weren't in the midst of a dramatic consumer depression. So, what's the point? Well, there are a few.

1. Get some of your favorite Latin American coffees now, while the prices are lower and availability is more ready.
2. If you're a coffee buyer (large scale), get your supply of staples like Colombian, but put more energy into researching new sources like Honduran, Mexican, or Guatemalan.
3. Invest in coffee. Maybe the actual stock of coffee commodities, maybe not. Definitely bank on specialty coffee sticking around.

I've tried the Ugandan from Coffee Ambassadors and was truly impressed. I gave some out as gifts! They did not pay me to say this either.

Lord, thank you for easy access to information. I don't appreciate basic blessings like that very often. Keep my head deflated and on straight. Here we go.

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