Coffee consumption up, as are prices

Despite this year's rapid rise in coffee prices, coffee consumption is up a couple percentage points to a new record high. As a matter of fact, demand has grown about 2.5% per year during the past decade.

Earlier this month, according to investors.com, arabica coffee hit a 34-year peak of $3.089 a pound. Commodities analysts expect prices to continue to rise for several months, but should start to fall next year.

This week, two coffee sellers raised their prices. Starbucks increased packaged-coffee prices by 17%, and J M Smuckers raised wholesale prices by 11%.

Schultz attacks coffee speculators

As reported on The Telegraph's website, Howard Schultz, "Starbucks' chief executive and chairman, said that the current spike in the cost of commodities such as coffee and other foodstuffs is "not based on supply and demand" but based on market speculation. He said that the farmers who actually produce the commodities are receiving a "de minimus" proportion of the price rises."

This speculation is a plague in the commodities market and is not limited to coffee and other foods, but also includes the price of crude oil, which we can all agree has driven the price of gasoline higher and higher lately. President Obama and 17 senators have recently been demanding new regulations to curb this kind of speculation.