The Hemisphere: Surplus & Shortage

The price of a pound of quality coffee in U.S. grocery stores edged up last week past $1.15 — only 15¢ short of 1954’s peak price and a fat 26¢ higher than 1955’$ low. This time around, the trail of cause and effect appeared to lead straight back to shrewd Manuel Mejia, czar of the Colombian Federation of Coffeegrowers.

Taken as a whole, coffee is in surplus all over the world. U.S. Department of Agriculture tabulations put 1955-56 production at 50 million 132-lb. bags, 6,700,000 more than ever before. But the U.S. consumer insists that a goodly proportion (35%-40%) of flavorful “mild” coffee be blended with the staple Brazilian beans in the best brands. And Colombia is the No. 1 producer of the mild varieties.

Last December Department of Agriculture reporters estimated that Colombia’s current crop would run to a record 6,500,000 bags for export. Czar Mejia, who keeps his figures secret, remained silent. But in succeeding months word some how drifted from Bogota to Manhattan’s coffee-trading Front Street that torrential rains had cut deeply into Colombia’s maturing crop. Roasters and brokers, caught with low inventories and suddenly aware that a shortage of mild beans for blending could be crippling, bid up the price from 63¢ to 80¢ a Ib. Colombia’s mild coffee, which customarily commands 4^ or 5^ more than Brazil’s standard grades, now brings a fat 20¢ differential. And the rain damage seems to have been vastly overstated. The nearly harvested crop, Colombians now say privately, will permit export of at least 6,200,000 bags, worth up to $650 million to Colombia’s coffeegrowers.