Starbucks sees ample specialty coffee supply

NEW YORK (Reuters) - Starbucks Corp. (SBUX.O: Quote, Profile, Research, Stock Buzz) sees a sufficient supply of specialty coffee to meet growing demand for its brew in new markets like China and Russia, the Seattle-based company's U.S. president said on Tuesday.

"What we've found is as we've created a market place for higher-quality coffee, there is an increase in the supply of higher-quality coffee," Jim Alling, president of Starbucks Coffee U.S., told the Reuters Food Summit in Chicago.

Alling said farmers were keen to grow more specialty coffees for a company like Starbucks, which pays a price higher than the nearby coffee "C" futures contract listed on the New York Board of Trade (NYBOT).

Starbucks in 2005 paid an average price of $1.28 per lb., above the average price of the NYBOT's "C" market, he said.

Starbucks opened its first store in China in 1999 and now has 165. Meanwhile, it plans to open stores in Russia and Brazil in the next 12 to 18 months as part of an international expansion plan that will boost its shops abroad fivefold.

Alling said the company has been working with coffee farmers in Latin America to help them develop social, economic and environmental practices.

"It's the smart economic play for the coffee growers," he said.