Starbucks Hits New High as Coffee Prices Stay Low (SBUX, DNKN)

Commodities & Metals

Published: March 16, 2012 11:47 am

Starbucks Corp. (NASDAQ: SBUX) raised the bar this morning, posting a new 52-week high of $53.37. Almost certainly the share price rise is due to the continued low prices for coffee and the prospect that those low prices will continue at least through mid-year. Dunkin’ Brands Group Inc. (NASDAQ: DNKN) came within pennies of its 52-week high as well.

Coffee futures are well below $2/pound, at around $1.83, far from the price of over $3/pound reached last may. This year’s crop from Brazil is better than expected and is selling at a discount of $0.10/pound in New York according to Bloomberg News.

The Brazilian crop through September next year is expected to rise to a record of more than 52 million 132-pound bags.

Starbucks raised its prices when coffee prices were high, but very likely doesn’t plan to lower them now that prices have fallen. Shocking.

Paul Ausick

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