In the last year, the price of coffee has risen dramatically. The import and distillery manager at Kaffebrenneriet, Ole Brattås, believes that the price should rise further if coffee is to continue to be a public good.
Last week, Nettavisen wrote an article about how The price of raw material coffee has increased by over 100 percent in just one year. This has led to more coffee producers increasing the prices consumers receive.
– A package with 450 grams of coffee that cost 39 kroner a year ago, now costs 50 plus towards the end customer, from us, said Ulf Stensland, CEO of Löfbergs to Nettavisen.
Consumption in Norway among coffee drinkers is around 4-5 cups every day and Norwegians are at the top of the world in coffee drinking according to Norwegian Coffee Information.
With such consumption, it can quickly become expensive for Norwegian coffee lovers if prices continue to rise.
– Risks that coffee will be an exclusive good
One who, on the other hand, is satisfied with the price increase is import and distillery manager, Ole Brattås, at Kaffebrenneriet. He believes a price increase for coffee is time.
– Actually, it is very positive that prices are going up. It is more viable for the coffee market in the long run, says Brattås to Nettavisen.
In the past, the price level has been so low that several coffee farmers have stopped producing and moved to the cities to find other work.
– Prices have been too low for far too long. The coffee farmers have lost out on selling coffee.
With low coffee prices, we risk that more and more people stop producing coffee.
– Combined with increased demand and major challenges with climate change, we risk that coffee will be an exclusive scarce commodity in 20-30 years, perhaps sooner.
The import and distillery manager even believes that with today’s price increase, coffee is still too cheap.
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Consumers should be aware
Brattås also comes with a small nod to the major international coffee producers.
– A question one should ask is whether the major international coffee distilleries reduce prices when the coffee is cheap to buy?
Here he believes consumers should be extra vigilant.
As a consumer, it is important to be aware that the price of coffee not only goes up with the purchase price, but also follows the market when the price goes down, Brattås points out.
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– That large coffee players can afford to pay so little
The coffee expert, Tim Wendelboe in Tim Wendelboe AS also agrees that the coffee price is not too high.
– It has been more or less the same since the 70’s and has circulated around 1 dollar per pound, with some fluctuations up and down due to frost or overproduction. In other words, the price has for many years not covered the production costs of the farmers, Wendelboe points out to Nettavisen.
– That large coffee players allow themselves to pay so little for coffee is not sustainable for the producers, which for me is incomprehensible since when you run a coffee distillery you are after all 100 percent dependent on the coffee farmer producing and delivering coffee.
He believes that coffee farmers have unfortunately not had an economically sustainable development despite the fact that production and living costs have increased since the 70s.
– That the prices today are over 2 dollars per pound, is for me still too low. I am in writing at the time of writing in Colombia and most of the farmers I have contact with here say that although the price is better today, they know from experience that it will fall again in a year or two when Brazil again produces fully.
– In addition, the profit goes up in the spinning as labor costs have increased considerably as it is even more difficult to obtain labor on the farms due to the pandemic, he adds.
He also points out that fertilizer prices have risen by 50 percent in the last year in Colombia and the price of food has risen.
– The total calculation is therefore unfortunately not so lucrative. Especially not when prices will fall again when Brazil again has full production.
In addition, several production countries are struggling with labor.
– It is no secret either that younger generations do not want to grow coffee as they do not see any future in it. In Kenya, which produces some of the best coffee in the world, the average age of a coffee producer is over 55, says Wendelboe.
He believes the problem lies in Norwegian consumer habits.
– We as consumers have a culture for coffee to be cheap or free. You can get a free refill for a whole year if you buy a coffee cup at a petrol station, and a coffee bag should preferably not cost more than 30 kroner at the supermarket.
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