Strong Swiss Franc Putting Pressure On Hungarian Homeowners


Though the Swiss are monitoring closely the value of the Swiss franc, some
Eastern Europeans might be checking the exchange rate with even greater
concern. Lured by low-interest rates on loans valued in francs, some
Hungarian businesses and local governments funded spending with the
foreign currency. But the stubborn strength of the franc against the euro
and dollar could bring sluggish times ahead, especially in Hungary. WRS’s
Tony Ganzer reports:

Coffee roasters fret over prices

Wake up, smell the coffee and check your wallet. Bern coffee-roasting giant Blaser Cafe is expected to announce higher prices for the coming year. Other roasters have already announced hikes, blaming the price of raw coffee. As WRS’s Tony Ganzer reports, this might not affect the price of your morning cup of java just yet, but roasters are fretting:

Illycafé is a mid-sized coffee roaster in Thalwil, near Zurich. Being “mid-sized” in coffee terms means they only import 700 tons of coffee beans a year.

Riccardo Seitz is a second-generation coffee roaster and one of the heads of Illycafé. He describes the types of beans inside the stacked 60 and 70kg sacks in his storage room, with some from Brazil or Guatemala or Indonesia.

Though only a mid-sized roaster, Illycafé still roasts about two tons of beans a day.

The beans roast under strict guidelines and travel through a winding vacuum system to keep the coffee’s aroma intact before packing.

Seitz says after the roasting, the beans go through a machine that checks their color and quality. Like in most Swiss industries, quality goes a long way to keep the reputation of coffee roasters in good standing.

But higher prices of coffee beans could threaten that.

“Everybody’s going to have to adjust prices, that’s for sure. Or they lower the quality, which is also a risk,” says Philippe Carasso, a coffee roaster in Geneva and president of the Swiss Coffee Roasters Association.

“People might want to stop drinking coffee because some roasters, instead of raising the price, lower the quality,” he says.

Carasso says speculators on the commodities market are driving up the cost of coffee beans, and small and mid-sized coffee roasters are facing a choice: either raise the price of their roasted coffees, or buy lower quality beans to keep costs under control.

Coffee giant Jacobs has already announced its prices. And even grocers Migros and Coop will have to make a decision on their coffee offerings.

“We’re raising them around—and it depends on the roaster—around 1.50-2.50 per kilo. I mean, you can’t do anything about it. If you want to survive you have to adjust the prices,” Carasso says.

He says coffee prices have risen more than 40 percent in last year, and in the next months roasters will likely raise prices just to survive.

This won’t affect the average cup right away, though, because roasters sell coffee by the kilo, and hotels and restaurants can make about 120 cups from a kilo.

So a price rise of 2 francs/kilo would only boost the price of a cup by a few cents.

But for roasters, any increase in coffee prices could be fatal.

Back at Illycafé, coffee beans fall into carefully constructed bags for sale. Company boss Riccardo Seitz says going to cheaper coffee beans is a bad option for Swiss roasters.

He says by changing to lesser-quality beans, the Swiss coffee market would be tainted. Especially in Switzerland, he says customers are very conscious of quality.

That means the beans must be the best, even if they’re more expensive.

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