What's Going On With The News Of Global Coffee Shortage?

2010 has been a year with some of the steepest rises in coffee prices, particularly during the month of December. New York coffee futures increased more than 50% during the year. This is an amazing trend that causes concerns for the future. So, what is going on?

Many different factors impact coffee supply and demand. In turn, the interaction between supply and demand has a direct effect on prices. It is a fact that consumer demand for coffee has been going up for many years. The trade has done an excellent job over many years in creating greater acceptance and demand for coffee among consumer populations worldwide. The increased availability of points of sale for coffee purchases (brick and mortar as well as online) has made it possible for many consumers to experience the brew more easily. The result is a high adoption of coffee as the beverage of choice.

The question, however, is how much of Brazil's increased output or any other country's increased output will end up in foreign markets including the United States. The reason is due to the increase in domestic coffee consumption following years of dedicated efforts by many governments to encourage this change. It has always been interesting to talk about how little coffee Colombians, Brazilians and other leading coffee producing nationalities actually consume. That trend is changing at a time when coffee demand overall surpasses coffee supply.

The Arabica bean specialty coffee varietals in particular have seen a great increase in demand that is fast outpacing supply. There is also a tug-of-war between the availability of real estate for use in coffee crops versus more profitable development which sometimes results in reduced coffee acreage. Plus, countries experiencing drought or excessive rainfall that disrupts the availability of coffee see changes in price levels right away.

In recent years, there have been some bad coffee harvests in Colombia and Central America primarily because of weather conditions. This has had a negative impact on overall supply at a time of high demand, a very unfortunate reality. Very likely, there will be a coffee shortage in 2011. If so, prices will go up in coffee shops, store shelves, online and other selling channels. Prices could go up by as much of 30% or more for some coffee products as compared to one year earlier. Brazil is expected to help replenish the inventories and ease the pressures significantly. Other coffee producing nations can also contribute positively and help maintain market availability with some normalcy and consistency.

2011 should be an interesting year for everyone in the coffee world. Coffee has what is called a long chain of demand, or a journey, from the bean to the cup. Many, many hands get involved before the coffee product finally reaches the consumer market. However, in coffee producing countries, coffee is a major source of employment that cannot be replaced easily. Coffee is also a key export product for many countries that depend on its revenues for their country's stability. This is good to know because it means that it is in everyone's interests to find solutions to the supply pressures while satisfying coffee demand.

For the coffee lover of specialty, gourmet coffee now is the time to enjoy a delicious cup or two of Ethiopian Longberry Harrar!

Timothy ("Tim") S. Collins, the author, is called by those who know him "The Gourmet Coffee Guy." He is an expert in article writing who has done extensive research online and offline in his area of expertise, coffee marketing, as well as in other areas of personal and professional interest.

Come visit the author's website: http://www.ourgourmetcoffee.com
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