Why we are paying more for kopi and coffee!

by chee Leng (on coffee makers)
(Singapore)

Why kopi is more expensive?

Some kopi at kopitiam increased to $1.00, and Starbucks adjusted their price by $0.50. Any companies that are being interviewed cited higher cost of goods.

The interesting thing about this higher cost of goods (coffee beans in this case) is not due to limited supply. Most growers expect their current crop to be 10% higher than their last one.

In theory, more supply meant lesser price, but yet the prices of food is the highest since United Nations Food and Agriculture Organization began keeping records in 1990.

Do you know that the culprit is actually YOU, you or rather we are the one that allow the cost of goods to keep increasing.

Lets take a look at Singapore, recently there was an interview on the rising cost of Bak Kwa (BBQ pork) that is essential for Chinese New Year.

Interviewers asked a few aunties what would they do about the rising costs of this item -all of them say they would buy, because they do not have a choice!

And this is exactly the mentality that give rise to the rising cost of coffee prices. Ask yourself this question, the kopi increase by a dollar, would you still drink it?

Starbucks increased their drink price by $0.50, would you still order from them. For most of us, the answer is yes.

In fact, Mark Warmuth of M.E Swing Coffee in Virginia Washington does a very good analysis, when he say that everyone should be thanking Starbucks for better coffee business.

Because of Starbucks, people are tuned to better coffee (coffee snobs would totally disagree with me that Starbucks is better coffee), and they are willing to pay more for coffee.

Because they are exposed to gourmet coffee, they look for different blend, or roast to suit their profile, giving rise to high street cafes and coffee shops.

With more companies buying and bidding for the coffee beans, the prices went up (and because consumers can pay, companies bid higher to get the best beans).

Reading until here, you might see a reason why Starbucks increase their price, but why the kopitiam at blk 139 in Tampines street 11 also increase their price?

Well, since the hype is all about price increase, and consumers is not making too much noise about it, why not join the bandwagon and make more profit.

Folks, you cannot really blame the kopitiams, anyway how many times can they do this sort of increase right?

So, blame no one, ultimately we are the ones that caused this price increase...