Vournas Coffee Trading

News from the Cupping Table

 
October 23, 2008 Jamaican Blue Mountain For Sale Anyone?

The famous producers of Jamaican Blue Mountain coffees, Wallenford and Mavis Bank, are for sale.  Currently, the Development Bank of Jamaica holds a 70% ownership stake in Mavis Bank, and is attempting its sale in order to recover a significant sum of money owed to it by the company.  Wallenford is being packaged for divestment and sale.  Jamaica exported 16,200 tons of Blue Mountain coffee last year.  Wallenford and Mavis Bank accounted for nearly 50% of the total exports.  Both coffee producers are owned in part by the government of Jamaica.  In 2005/2006, Wallenford lost $47 million, and in 2006/2007 they lost $56 million.  Income grew from $604 million to $830 million between both years, while the cost of sales and direct expenses also grew from $424 million to $521 million.  Administrative expenses jumped from $138 million to $312 million.  Clearly, there are alot of hands in the mix, many of which must be holding a significant amount of green (money, not beans)... I think the answers to many of your questions regarding the prices of Jamaican coffee might be reflected in several of the above sentences.

 

We have heard that coffee cherry will still be sold to meet demand for the 2008/2009 crop, however it is fairly well known that the crop sustained significant damage from the recent hurricanes that plowed through the island.  Losses from Tropical Storm Gustav amounted to 400,000 pounds and are estimated at over $100 million alone.

 

If I were a betting guy, I would look for prices to move upwards for any Jamaican coffee that will available this holiday season.  Please don't shoot, I am only the messenger of this Jamaican news.  Feel free to talk with us about possible replacement coffees if the prices drive you to "just say no."   

 

Posted by Michael Vournas