Green Coffee Price Crisis and What We'll Do

Posted by Chanho Hong on

Green coffee price crisis

Since the covid-19 spread out, international coffee market has gone into one of the most serious price crisis. Not only instability of the trade market affected the international coffee trades but also the virus itself has negatively influenced the producing countries thus low in production yield. Whilst, green coffee diseases such as leaf rust, etc. are continuously being spread across the countries. Also, the climate changes is gradually getting worse. This is not just a part of news we hear, is a scattered piece of the world of coffee that is getting killed.

 

What’s happening now

So, what is really happening in the coffee industry? As you may have heard, there have been covid-19, frost, leaf rust, stock market fluctuation, et cetera. One thing that really surprises us is that all those things have happened almost at the same time (within 2-3 years). This have influenced the industry to be extremely unstable hence the balance between supply and demand has been destroyed. In the last couple of years, price for green coffee has risen almost double due to those reasons. Not just the cost is impacted but also the entire system that includes all the human work is trembling.

 

What are the major impacts on the industry

In the roaster's point of view, there are two major impacts regarding this. Firstly, doubling the cost is serious. While the price we sell at the cafe level remains the same, doubled cost not only removes the margins but also cuts all the headroom of financial activities of roasters. This pushes the micro roasters going into hard times, financially.

 

Another important factor is that micro roasters are on the weakest position where is in between the fluctuating green bean market and low-price-fixed consumer market. Although the cost rises and rises, micro roasters would have no choices to decide their price unless there is a new market trend with a higher price decided by big supplier or market demand by consumers. As the micro roasters are, in reality, not a market price decision maker, they will be led by the market by other's own will.

 

What’s going to happen to Normcore Coffee?

Well, as you may be able to guess, this is unpredictable. We do not know what will happen. However, what we see now is that the consumer products will be charged a little more than it is sold now. Importantly, we should be able to add more values to the products as the price increases. This will not only about the coffee beans itself but also it will include the entire value of what is experienced.

 
We always appreciate what is given to us from all our customers. As our vision is to do right things, we are going to keep working hard, consider deep, and make wise decisions to be a responsible company to our community.

 

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