ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, August 16, 1996 TAG: 9608160040
SECTION: BUSINESS PAGE: A-7 EDITION: METRO
DATELINE: SEATTLE
SOURCE: Associated Press
THE BEST BEANS are harder to find, meaning the price of java may jump. But it's just market jitters, some say.
Finding a good cup of coffee may be getting harder.
Dwindling stockpiles of quality coffee beans means less of a supply for speciality coffee roasters and retailers. And if the shortage persists, that could eventually trickle down to consumers, who will have to pay more for a cup of latte.
But many big chains say they're safe for now, mostly because they buy their coffee supplies on advance contracts and don't expect to be affected by this short-term shortage.
``We have coffee that will last us for [up to] nine months, either contracted or in inventory,'' said Michael Casey of Seattle-based Starbucks. ``We think there's adequate supply, and these shortages are relatively short in duration.''
Coffee futures prices surged to one-month highs Tuesday on reports that U.S. stockpiles of quality coffee had dwindled to less than a week's supply. Total U.S. stockpiles of green arabica coffee - the type used in gourmet coffees - fell to 2.27 million 132-pound bags last week, according to the Green Coffee Association.
In Coffee, Sugar & Cocoa Exchange warehouses in New York, supplies are significantly below year-ago figures, in part because Brazil's previous crop was severely reduced by frost and a drought.
But Scott Elich, co-owner of Roanoke-based Mill Mountain Coffee & Tea, said he has seen no indication of a shortage looming.
"Last time I looked was last week, and prices were going way down," he said. He buys some 15,000 pounds of coffee every month or so for the Mill Mountain locations in Roanoke, Salem and Blacksburg. He'll need to place another order in a few weeks; any price fluctuations may settle down by then, he said.
During the 1994 coffee shortage, when frost and drought decimated Brazil's coffee crop, Mill Mountain raised its by-the-bag coffee prices by $1.50 to $2 a pound and its in-store prices by about 10 cents a cup.
Some roasters and suppliers wonder if the shortage is real.
"What shortage there is, basically is created by the producing countries themselves," said Ed Woods, general manager of H&C Coffee Co. in Roanoke. Coffee retailers and distributors always face the threat of a shortage, he said, because coffee-producing nations will cut off supplies from time to time to increase demand.
"We've been going through this for 30 days or more," Woods said. "It just depends on how much they release to sell. It's the old pocketbook.''
In Seattle, the nation's self-proclaimed coffee capital where espresso shops and stands proliferate, the sentiment is much the same.
``You know there's coffee. It's just a big game everybody's playing,'' said Mauro Cipolla, vice president of Caffe D'Arte, a family-owned specialty coffee retailer and distributor.
Unlike in 1994, Cipolla sees no hard evidence of an actual shortage in top coffee-producing nations such as Brazil and Colombia. He thinks someone is manipulating the volume of coffee for export.
``You know people are just playing games with the supply,'' he said.
But if the shortage of quality coffee is real and persists, ultimately the cost will be passed on to the coffee drinker.
``Clearly there's a general risk in that as people move more and more toward gourmet coffee and away from the grocery store brand, there's a limited supply of premium coffee,'' said Mary Fleckenstein, an analyst at Ragen MacKenzie, a brokerage firm.
Staff writer Megan Schnabel contributed to this story.
LENGTH: Medium: 71 linesby CNB