Jul 18, 2013

    Coffee scourge may see price of cuppa rise

    COFFEE lovers, enjoy your favourite brew at regular prices while you can.

    Prices for a cuppa remain unchanged for now, but there is no guarantee that they will stay that way, due to the fungal epidemic sweeping coffee plantations across Central America.

    The epidemic is reportedly expected to cause a global coffee shortage and a price hike.

    Coffee sellers and supermarkets that My Paper spoke to said that their sales should not be affected at the moment, and they are not raising prices for now, despite the coffee-rust outbreak.

    Mr Kenneth Lee, owner of the drinks stall at Hai Fong Restaurant in Toa Payoh, said: "So far, I've received no news regarding the (coffee-shortage) issue, and our supplier has not increased the price (of coffee beans) yet."

    He said just 20 to 30 per cent of his coffee beans are imported from the affected areas, while the majority of imports come from Vietnam and Indonesia.

    Sheng Siong said that coffee products from Central America are available at fewer than 10 of its 33 outlets, so it does not expect sales to be affected much.

    A Giant spokesman said a coffee supply shortage was not anticipated, as most of its main coffee suppliers, such as Nestle, do not import from Central America.

    "Our supply of ground coffee powder comes mainly from Malaysia. Other coffee sources include Vietnam and Indonesia," she said.

    Mr Lee said that if the prices of coffee beans do rise, he would consider raising coffee prices. His stall sells a cup of coffee with milk for 90 cents.

    NTUC FairPrice, Starbucks, Tully's Coffee and The Coffee Bean & Tea Leaf declined comment.

    Poor weather and lower production in coffee-growing nations drove bean prices to a 13-year high in 2010, which caused price hikes here in the same year and in 2011, said The Straits Times.

    For instance, Starbucks increased drink prices by between 10 and 30 cents, with a tall mocha frappuccino going for $5.80 in early 2011, up from $5.50.

    In the latest coffee troubles, "la roya", a coffee rust disease, has spread across Central America, destroying about 15-20 per cent of the harvest from last year to this year. Parts of South America have been hit too.

    In February, Guatemala declared a state of agricultural emergency after 70 per cent of its national crop was infected.

    The disease has not caused coffee prices to go up yet in the United States, USA Today said late last month. But it cited a spokesman for Green Mountain Coffee Roasters, one of the biggest coffee buyers globally, who said things could change next year if the coffee rust problem persists.

    He said the coffee market has not reacted to a fall in Central American coffee production this year because Brazil, one of the largest coffee growers globally, is predicted to turn in a good crop.

    An International Coffee Organization report also said the impact of roya is expected to be "even more severe" next year.

    Already, some coffee buyers are looking elsewhere - such as Vietnam, East Africa and China - for coffee, said Reuters last week.

    In Singapore, Mr George Wong, owner of Moly Cafe in Toa Payoh, said most of his coffee beans are imported from Brazil and Colombia. If prices rise, he might not increase coffee prices, but he said it also depends on how much his supplier raises the prices of coffee beans.

    Sales executive and coffee lover Jasmine Yong, 22, said she would not be willing to pay more for coffee if prices do increase.

    "I would rather go without coffee," Ms Yong said, adding that she would look for caffeine alternatives.