THE PRESS THURSDAY, AUGUST 5, 1976. More expensive coffee

Press, 5 August 1976, Page 14

THE PRESS THURSDAY, AUGUST 5, 1976. More expensive coffee

The long-feared effects of last year’s frosts in Brazil are at last being felt in New Zealand. Prices for instant coffee, ground coffee and coffee beans have recently risen sharply, after smaller rises earlier this year. Last year’s frosts ruined Brazil’s coffee crop, reducing the 1975-76 harvest from an expected 28 million bags to 7.5 million bags. This, together with reduced harvests in other coffee growing countries, has led to prices soaring on international markets as buyers scramble for severely limited supplies.

The concern among people who buy coffee beans from producers and sell coffee in various forms to consumers—from the small local retailer to the giant multi-national food companies—is that coffee will price itself off many tables and that world demand for coffee will decline permanently. Coffee growers might be expected to share such fears. If demand does slacken appreciably and not revive quickly enough, when the market is again well supplied, as it should be, barring further natural disasters, in three or four years time, the price paid to growers for their coffee may fall as dramatically as it has risen in the last year. But producers, particularly in Brazil, are apparently confident that world demand for coffee will not fall excessively and that they will be able to sell all the coffee they can produce for a reasonable price, though not as high a price as at present, even when plenty of coffee is available again.

In Brazil itself coffee has increased in

price 40-fold in six years and coffee consumption in the land of coffee has fallen rapidly. The particular danger of those whose livelihood depends on a high level of demand for coffee in consuming countries such as New Zealand is that the price of tea is likely to rise much more slowly, and tea will therefore become an increasingly attractive alternative drink. Competition between Asian and African tea growers is likely to work to the advantage of consumers in the next few years. However, the lower price for tea than for coffee in recent years has not stopped coffee from becoming as popular a drink as tea in the last decade in New Zealand. This change in national habits will probably enable coffee to withstand the threat from tea on the New Zealand market in the next year or so.

Although it has taken natural disaster to produce the pinch which has sent coffee prices soaring, stocks of coffee had been falling gradually for a decade and some increase in price about now was almost unavoidable. Coffee growers —many of them small, independent producers—are likely to continue to enjoy high prices for their product for some years. New Zealand consumers should not begrudge some permanent price increase. Coffee, and tea. are both still relatively cheap and before balking at the steep rise in the price of coffee they are now experiencing, New Zealand consumers should Spare a thought for the great difference the increased price is making to many small farmers whose lot is less fortunate than their own.