Friday, May 13, 2005

regional coffee culture, part xxxix

"although retail coffee prices have gone up significantly in recent months, consumption is unlikely to decline as the demand is inelastic. traditionally, coffee consumption is confined to southern indian states. average coffee consumption in india is low, at 10 cups per person annually.

the recent spread of the coffee-shop culture throughout major cities is supporting higher consumption, although the volume of coffee use by these chains is relatively small. currently, there are several large companies offering a wide array of coffee preparations, which are increasingly popular among the growing number of high-income consumers, especially affluent young people."

so many things are fascinating, from a coffee point of view, about this little business article. not only does it document the rise of specialty coffee culture in india in recent years among the young -- which i hope means coffee consumption should grow in india in the future, as the bean becomes associated with an upscale lifestyle and spreads in fashion -- but also has an interesting thing to say about prices.

because, as of course all long-time readers know, india is a coffee-producing country.

i just don't understand the farmers' strategy of holding back coffee for higher prices -- because of course while a very few will benefit, once they start to sell en masse, the price will then nosedive as suddenly all this coffee appears at once. and if too much coffee appears at one go, wouldn't it possibly drive the price down even lower than if they had sold at the normal time and in the normal way?

so if you're the farmer, isn't this just a plan to risk reducing your own income? it's just another behaviorial thing that reminds us all how the coffee market we have now is neither rational nor sustainable. there just has to be a better way. . .

and i must say that i completely understand what drove this man. there are many times i have felt the same way myself. . .

let me note, dear readers, that i'm leaving london tomorrow to return to new york. farewell monmouth and godspeed!

i also want to deeply thank all the great british people who i've met on this merry journey of coffee, chocolate, cheese, and wine in london! you're the best!

posted by fortune | 5:12 AM | top | link to this | email this: | links to this post | | 0 comments

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