Gourmet coffee prices may follow gas prices upward due to flooding in New Orleans, if coffee warehouses and roasters
were damaged by Katrina.

The condition of 1.6 million 60-kg (132-pound) bags of green coffee stored in New Orleans warehouses is unknown following flooding caused by Hurricane Katrina. New Orleans coffee warehouses represent about one-sixth of U.S. coffee storage. If coffee stored there is damaged, it could have an affect on future coffee prices in the U.S. coffee market.

"We still don't know whether water has gotten into the warehouses or not," says Joe DeRupo, spokesman for the National Coffee Association in New York, which represents importers and roasters of coffee beans. "So far, it looks as if there isn't a lot of damage to the warehouses." New Orleans is the port of entry for Jamaican and Puerto Rican Coffee as well as all Central and South American coffee beans imported into the U.S.

Contracts for near-term inbound coffee shipments formerly scheduled to New Orleans have been diverted to Houston, Miami or New York. The market is bracing for upward pricing pressure until both scheduling of future shipments and status of those green coffee beans stored in New Orleans warehouses is determined.

A dozen coffee roasting facilities in New Orleans employ about 1,000 people, according to figures compiled by the economic development group Greater New Orleans Inc. Those employed by both roasters and warehouses were displaced from their homes and many can't commute due to continued standing floodwaters and evacuation orders from local officials.

The physical condition of the coffee shipping, warehousing and roasting facilities and the near-future availability of housing and easy transportation for employees of the New Orleans coffee industry will determine the extent of increases of gourmet coffee prices. It could take several weeks to assess damage to warehouses and coffee roaster facilities and months to return to normal activity as roads and physical infrastructure are repaired.

It has not been determined how much of the total green beans stored in New Orleans warehouses are Robusta beans (used in instant coffee) and how much represented by the more desirable Arabica beans, which are used in gourmet blends. Robusta beans are used in Proctor & Gamble's Folgers brand and Kraft Food's Maxwell House brand, while Arabica beans are used in the more desirable gourmet coffees, including those sold by Starbucks and premium coffee houses.

Premium Puerto Rican and Jamaican coffee crops are sometimes affected by severe weather in the Caribbean.

Prices of Gourmet Coffees and the effects on the New Orleans coffee warehousing, roasting and processing industry can be discussed in the Coffee Talk Forum at http://www.tastesoftheworld.net/talk/ .

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