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Coffee Price Swings Bad for Business, Says Illycafe S.p.A. Chairman

Andrea Illy, the CEO of Trieste, Italy-based coffee giant Illyacafe S.p.A., recently told attendees at a “Feeding the World” meeting at the Economist Conferences in Geneva that volatile coffee prices worldwide are bad for the industry.

Illy discusses coffee pricesPrice fluctuations due to production shortages are at the heart of the problem, Illy said, according to a Bloomberg report.

“The market nowadays is unpredictable. It’s difficult to manage such volatility and it’s quite disruptive. Hedging unfortunately is only short term,” Illy said. “The balance between production and consumption is never perfect. We are in a production deficit, the stocks are very low and as a consequence of this, for the first time in coffee history, it has been more than one year now, the price in New York is systematically above $2 a pound.”

Illy, who told the audience that his company buys its beans directly from growers in Brazil, also pointed out some worldwide equity flaws regarding the coffee market, according to the Bloomberg report.
“There are more than 25 million families in the world involved in coffee growing in 50 countries,” he said, adding that only $26 billion of the $105 billion in the roasted coffee market goes to the countries producing coffee.
The full story: Bloomberg