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Coffee drinks won't rise in price

BY CHRIS HIGGINS | FEBRUARY 26, 2014 5:00 AM

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Java House on Washington Street was bustling with murmurs and laptop clicks on Tuesday. UI senior Caitlin Scott sat at a back table with her friend. She glanced occasionally from her book to take a sip from the latte she bought earlier. The price — $3.55.

Prices of Java House lattes and other coffee drinks at local cafés will not rise soon despite fears from a coffee shortage after a Brazilian drought, which has led to a spike in the price of coffee futures, also known as future contracts.

“The price of coffee doesn’t generally affect roasters and retail stores,” said Angela Winnike, the Java House director of operations. “It’s not going to be seen immediately … I don’t see this being an immediate effect in the next few months for us.”

Such news is positive for students such as Scott, who are concerned about the cost of satisfying their caffeine cravings.

“I drink coffee every day,” Scott said. “I just think it’s a big thing, especially with students who need to stay up and get up … I like studying in coffee shops and this environment, but I already have to really consider how much coffee I’m buying as a student, because it’s really expensive.”

“Even this is expensive,” she said, pointing to her latte.

Coffee futures hit near $1.76 per pound after hovering around $1.10 last November, according to the Intercontinental Exchange. It surpassed $3 in 2010.

“Coffee prices have been coming down so much since the stock-market crashed,” Winnike said. “They have become a little more reasonable and a little more stable over the past year.”

Winnike said the Java House trends are reflected in other coffee shops.

“Anything that’s going to affect us is going to affect anyone else,” she said. “If Starbucks says, ‘Hey, this is going to affect us,’ it’s going to affect us, too.”

Winnike said many companies are shifting growing operations to countries other than Brazil in the wake of natural disasters and the spread of fungus, but Brazil remains the largest producer of coffee worldwide.

Java House employee Tanner Woody believes the price spike has benefits as well.

“The idea that coffee prices are going up is a good thing,” he said. “Farmers aren’t getting shorted … It’s very easy when you’re a poor farmer in Brazil, and there’s a shortage going on, and you’re still expected to sell the same amount for the same price even though it’s a more-requested good.”

For now, caffeine drinkers can sigh a breath of relief. Coffee prices at Java House and cafés across the city will persist along with murmurs and laptop clicking.


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