Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, June 30, 1994 TAG: 9407010002
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: By MELISSA CURTIS STAFF WRITER
DATELINE: LENGTH: Medium
The most severe frost in 13 years struck Brazil over the weekend, sending coffee futures soaring. Western Virginia coffee business owners say their prices are sure to follow.
David Booth, owner of Quality Coffee Service in Roanoke, said he probably will have to increase his prices about 40 cents a pound because of damage to Brazil's crops. He anticipates a 15 percent increase in coffee prices.
"Only a fool would not raise their prices when you get hit with cost increases like this," said Booth, who sells primarily to offices.
Scott Elich, co-owner of Mill Mountain Coffee and Tea in Roanoke and Blacksburg, said he raised his prices 50 cents a pound last week. Because of the frost, he expects they will go even higher. His retail businesses sell coffee by the pound and by the cup.
"If prices are going up as much as they say they have, I suppose I'll have to raise my prices even more," Elich said.
And this may only be the beginning of soaring coffee prices.
Because coffee beans take years to mature, next year's Brazilian crop will be most affected by the weekend frost.
Accu-Weather Inc. meteorologist Howard Schmidt said frost damaged a reported 15 percent to 20 percent of the developing Brazilian coffee crop, which will not be harvested until next year.
Unconfirmed reports said as much as 30-40 percent of the crop was damaged.
A small harvest next year could cause coffee prices to be driven even higher then.
Coffee-futures prices, up more than 25 percent Monday - the largest one-day increase in more than seven years - have risen 73 percent since May, causing coffee businesses everywhere to raise their prices.
Elich said he adjusts his prices every now and then, but his 50-cent increase last week was by far the biggest he has had to make since he opened in Roanoke four years ago.
Ed Woods, general manager of H&C Coffee in Roanoke, which sells coffee to supermarkets, hotels and restaurants, said he has increased the price of a pound of coffee 60 cents in the past month. But Woods thinks the increases since May are compensation for the last 18 months' low coffee prices.
"Coffee really has been underpriced for some time now," he said.
Will the higher prices per pound affect local coffee businesses?
Elich, who sells specialty coffees, said he does not think so.
"The quality of [Mill Mountain's] coffee is so much better than [customers] can get anywhere else that they will be willing to pay a dollar or two more for it," he said.
Bernie Hall, owner of Fountain Coffee Services on Wilson Road in Roanoke, said he expects some customers will turn to wholesalers for coffee to cut costs, but he hopes they won't. He sells mostly to offices and convenience stores.
"I'm trying to hold my prices down to keep my customers," Hall said. "I may have to bite the bullet a little bit."
Elich said the price increases result in an increase of only three cents a cup.
"If you look at the increase per cup of coffee, it's not very much," he said, "but of course, who does that?"
by CNB