Cheap Pound Expensive Coffee

Bywww.BuyOrganicCoffee.org

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Who would have thought that one of the immediate effects of Britain voting to leave the European Union would be a pricier cup of coffee?

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Bloomberg reports that a plummeting British Pound has made a cup of Java more expensive in Great Britain.

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U.K. coffee drinkers should brace to pay more for their morning fix as domestic roasters start to pass on increased import costs after Britain’s Brexit vote

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London’s small-scale producers, who help supply the capital’s taste for a quality roast, are facing a steep rise in the price of coffee beans after the pound slumped to the lowest in 30 years against the dollar.

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As with most imported commodities, U.K. roasters pay for the raw product in U.S. currency, and the foreign-exchange reaction to Britain’s vote to leave the European Union has jolted the market.

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Not only is the British pound worth twenty cents less than it was a year ago but coffee has gone up 20% during the same time frame.

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And as we noted in our article Americans Are Drinking More Coffee, coffee may go a lot higher.

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Over the decades the price of coffee has risen above $3 a pound and fallen as low as 50 cents a pound.

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Speculators such as readers of Seeking Alpha are anticipating as high as $3 a pound as stock piles fall and Americans as well as everyone else drink more coffee.

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Coffee may go up in price for everyone but the cheap pound due to the Brexit vote will mean more expensive coffee in Britain than in the USA.

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Tea Anyone?

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You may be thinking that the Brits drink tea so what is the big deal about coffee.

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However, there are seven Starbucks in downtown London alone. And for that matter the Brits used to drink coffee when Ceylon (now Sri Lanka) was a coffee producer.

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That was in the days before coffee leaf rust. In our article, Is Coffee Leaf Rust Due to Climate Change we mentioned the start of this fungal disease.

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Coffee leaf rust is a fungal disease. It wiped out coffee plantations in Asia in the middle of the 19 th century.

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The country of Ceylon (Sri Lanka) was a coffee producer before the leaf rust drove planters to grow tea!

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The disease spread from the East Indies to South Asia and Africa and eventually arrived in the new world, almost a century later around 1970.

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Today coffee leaf rust threatens the livelihoods of coffee growers and workers throughout Central America.

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When their colonies switched from growing coffee to producing tea the British public drank what showed up on the boat from Asia.

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Today Britain drinks a fair amount of coffee.

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The cheap pound expensive coffee dilemma will not necessarily drive more Brits back to tea because tea is also imported so its price in pounds went up also!

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How about Organic Coffee?

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If the Brits are hurting over the higher price of regular coffee they will feel deeper pain as the prices of shade grown and organic coffee rise even higher.

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One can only hope that the British pound regains ground and that coffee does prices do not reach the stratosphere.

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