Coffee and Sugar: Can't Live Without Them

Coffee prices have slowly fallen nearly 50% from levels seen in the fall of 2011 due to supply issues. Most of us realize, however, that coffee demand is inelastic. Simply put, when coffee prices increase, demand fails to taper. Similarly, recession or no recession, people are accustomed to their morning caffeine. Further, the cold winter months typically see an increase in demand for coffee beans and, therefore, prices are typically supported. Seasonal tendencies certainly aren't a guarantee, but they are reason to take note.

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