Industry News | October 14, 2005

Starbucks Doesn't See Higher Prices from Hurricane Stan

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Starbucks Corp., which buys 80 percent of its coffee from Latin America, says it does not expect to increase prices in the aftermath of Hurricane Stan which hit Central America and Mexico earlier this month, Reuters reports.

"At this time, we do not anticipate any price increases," Lara Wyss of Starbucks said in a message to Reuters. "We are not anticipating any delays as we have purchased coffee many months out."

Hurricane Stan slammed into Central America and southern Mexico earlier this month, causing severe flooding and landslides in a region prized for premium coffee. About 2,000 people were reported killed.

"Starbucks...is deeply saddened by the tremendous loss of life and devastation caused by the natural disasters in Central America and Mexico," Wyss said in an e-mail to the news agency.

"We anticipate working with relief organizations in the impacted areas and will evaluate our contributions in order to best support those communities," she stated.

"Additionally, Starbucks will work together with our business partners and the local communities in Guatemala, El Salvador and Mexico to assess the impact of this devastation on the coffee farms and farmers that we have relationships with," she added.

Official estimates of total losses to coffee crops in the region from the hurricane have so far been minimal.

Damage to El Salvador's coffee after Hurricane Stan and a recent volcanic eruption should not exceed 2 percent of the crop, the country's coffee research group said on Thursday.

Sergio Gil, head of research group Procafe, said crop damage would not be as severe as in Guatemala, where up to 6 percent of the harvest may have been lost.

Guatemala exported 3,489,527 60-kg bags from September 2004 through August 2005, according to the International Coffee Organization (ICO).

El Salvador exported 1,313,005 bags of coffee, and Mexico shipped 1,854,342 bags during the same period. Total exports from all producing countries reached 89,660,839 bags.

Mexico has not yet announced how much of its crop was affected. The states of Chiapas, Veracruz, Puebla and Oaxaca -- hard hit by the storm -- account for about 90 percent of the country's output.