"Don't shoot yourself in the foot" the old adage states.
The graph on the right shows recent coffee prices - both world-wide and also in Nepal. Why the "disconnect?"
1. "Seller's Market" - the current local coffee situation is one in which demand significantly outstrips supply.
2. "Time Lag" Between Demand & Production - with coffee prices currently "high," a considerable investment is being made in more planting. Remember, however, that it requires roughly 5 years from the time a coffee bush is planted until in comes into "full production."
3. "Skewed Export Market" - small quantities of coffee are being exported for significantly-high prices. As all farmers strive toward this unsustainable level, it artificially drives the price of local coffee high.
US$ 5.75/kg - Current FOB Green-Hulled Price for world-class South Indian coffee (scoring SCAA >80).
US$ 7.36/kg - Current FOB Green-Hulled Price of quite-ordinary Nepali coffee (scoring SCAA =70).
Our Company Guiding Principles include the mandate of supporting Nepali coffee. As you can see, however, (being a business and not a charity) this is not easy under the current run-away market situation. Remember: the "price bubble" must ultimately "break."