Well, I'm not going to buy "Treasuries", although at this stage I might get adventuresome and buy a six month T-bill. Maybe I ought to load up on coffee instead?
There's CNBC talkin' about "red hot coal" again, not meeting my smell test. Watch your wallet on these sudden media revelations, old story. I guess with an inflationary 4th of July display underway, the shills have to sell something?
Reuters
Consumers Wake to Higher Coffee Prices
Friday March 11, 12:52 pm ET
By Jeff Coelho
NEW YORK (Reuters) - U.S. consumers awoke to the prospect of higher coffee prices Friday morning after Folgers hiked by 12 percent the list price to its retail customers for ground coffee.
Folgers, the popular brand of Procter & Gamble Co. (NYSE:PG - News) and an industry trendsetter, lifted its list price for ground coffee by 28 cents to $2.56 per 11.5 to 13 ounce equivalent can.
The company said the move was in line with surging futures prices for arabica beans on the New York Board of Trade.
"This is because the New York "C" contract has increased over the past 20 days to an average of $1.23 a lb. from 95 cents when we last took a price change on Dec. 9," said company spokeswoman Susanne Dusing,
On Dec. 9, 2004, Folgers boosted its list price on ground coffee by 14 percent, affecting about 75 percent of its retail coffee line.
That move prompted similar price increases just days later from other major roasters like Kraft Foods Inc. (NYSE:KFT - News) for its Maxwell House brand and Sara Lee Corp (NYSE:SLE - News) for its Chock full o'Nuts brand.
Since then, the high-quality washed arabica beans listed on the New York Board of Trade have climbed almost 40 percent.
Indeed, prices have been hovering at levels not seen in more than five years, before the coffee market plunged into a four-year crisis with oversupply and low prices, forcing thousands of farmers in developing countries out of work.
The rise in the futures market has been largely fueled by industry expectations of a global supply deficit this year.
The International Coffee Organization expects world consumption of between 114 million and 115 million 60-kg bags, which would exceed projected output by 7 million to 8 million bags.
OTHER ROASTERS TO FOLLOW
"We've had a very large run-up in wholesale prices and that is always going to be passed on to the retail customer," said James Cordier, president of Liberty Trading Group, a commodities brokerage.
"Folgers is usually the leader and we will see the other brands follow the lead either today or Monday," he predicted.
Spokesmen for Kraft and Sara Lee were not immediately available for comment.
"Every roaster that we deal with, big and small, was waiting for someone to take the first step to lift prices," said Ray Keane, a coffee trader at Balzac Brothers & Co. Inc., a green coffee importer.
Green or unroasted coffee, which comes in many varieties from high-quality arabica to robusta. A roaster buys the green beans, roasts them, then packages the coffee as ground or whole bean in tin cans or plastic containers or foil packets.
"Once that did happen, there were quite a few happy roasters this morning. And now they are all looking for the next raise," Keane added.
Judy Ganes, a commodities analyst with J Ganes Consulting, agreed. "It's only to be expected. The market has come up significantly from the last time they raised prices. I'm actually surprised it took as long as it did."
The New York Board of Trade's benchmark arabica contract for May delivery (KCK5) peaked just shy of $1.40 a lb on Friday. In stark contrast, benchmark coffee contracts traded between 40 cents and 60 cents a lb from May 2001 to September 2002. |
