Hurricane Katrina Helps Coffee Farmers

Hurricane Katrina will affect our economy far beyond what the damage of the hurricane has inflicted. The obvious and most reported effect will be on the oil supplies in our nation. Being a coffee lover as well as coffee marketer impact on the price of coffee as indicated by the article broadcast by the Associated Press caught my eye immediately.

"BOGOTA, Colombia (AP) - Hurricane Katrina may have destroyed about 1.5 million sacks of coffee stored at warehouses in New Orleans, raising the global price of coffee and benefiting coffee growers across the world, officials said Friday.

'There were about 750,000 sacks of coffee in New Orleans certified by the New York Board of Trade and private importers had a similar amount,' said Gabriel Silva, head of Colombia's National Coffee Federation."

Apparently the markets have effectively claimed the coffee destroyed and the price of coffee on the global markets has risen by 12 cents in the five days after Katrina made landfall in New Orleans. For those not as familiar with the coffee market, New Orleans is the top coffee port and major warehousing and roasting center.

The coffee lost in New Orleans represents about 8 percent of annual coffee consumption in the United States, according to a study by the Colombian Coffee Federation.
Silva said the lower global coffee production combined with the flooding after Hurricane Katrina means that Colombia's coffee exports this year will likely bring in between $1.6 billion and $1.7 billion compared with $1.056 billion in 2004.

Colombia is one of the world's main coffee exporters so the law of supply and demand will work in their favor in the near future.

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