Personally I have concerns with the continued slide of the Coffee C Market. Sure for a spell it got out of whack breaking over 3 back in 2011 and it was rough, but the pendulum seems to have over compensated. Sliding today to I believe the lowest in over 5 years at 1.068. While it doesn't set the price of Specialty Coffee, as the C goes down it does generally causes it to go lower too, which is not necessarily a good thing for long term sustainability. On the bright side is the rising number of quality focused farms whose coffees are being offered via various auctions and bigger operations who can setup fair direct trade agreements where farmers get what their coffee is really worth in the cup. But it seems a drop in the bucket in the bigger scheme of coffeedom.

Super high yields (two harvests this year!) of Brazil commodity arabica is driving the C Market down, while the roya infestation is driving supplies of high quality coffee in Central America down. Unfortunately most specialty coffee prices are linked to the C Market (with a premium added), so high-end growers are watching their prices fall together with their yields. The situation could hardly be worse.

My friend, Tim Castle, had a great blog post in July on why this may be a great opportunity for specialty to decouple from the C Market: http://www.coffeecurmudgeon.com/.

Scary roya infestation numbers disclosed today at the Let's Talk Coffee conference in El Salvador: http://instagram.com/p/gI3IDmxBEa/.

How does this effect direct trade?

I got into specialty coffee in 2011, but I have not seen a drop in price from roasters or green bean providers since that time. No price difference would make sense if roasters/providers didn't base their "direct trade" price off the C market. However, for non direct trade, or if they do base their current direct trade price on C market values, were roasters just eating the higher prices before or are they just making extra profit now?

Direct trade prices are usually not benchmarked to the C Market (but sometimes are). In any event direct trade represents a tiny fraction of the market.

As it happens, detaching specialty coffee from the C-Market seems to be a major focus of this weekend's "Let's Talk Coffee" conference.

As legendary importer David Griswold put it

This industry is broken. The C market [the price of commodity coffee futures] has more to do with mutual funds and macro economics than supply and demand. Governments are constrained in how much they can invest in developing quality coffee, farmers are constrained in investing in quality coffee. The average age of a coffee farmer is 45 to 50...children won't go into coffee if they see suffering.

Full report from Sprudge here: http://sprudge.com/ltc-2013-information ... -need.html.