Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
@JK No one should have any incentive to grow coffee in most countries. The coffee market is a controlled oligopoly -- where buyers have no incentive to pay up. Where importers are having to finance the JDEs of the world with 275 -360 days credit terms and the lines are this completely used up ( banks will do. Bill discounting but will ask for a 10 pct haircut). Since these goods are consigned to the banks the goods must be hedged ( if the roaster has not fixed) so no incentive for price to rise too much to avoid margin calls.
Instead the buyers will impose other ridiculous sustainability standards like fair trade UTZ rainforest 4c bird friendly scarecrow friendly :-) on producers who will have to fork out from their own pocket without any guarantee of offtake contracts and where producers / exporters see the smallest part of the margin for the highest risk. -- the trade at origin has never made sense from a sharpe ratio perspective and even less now from an optimal allocation of resources ( Pareto principle)
The only thing left is to read and interpret signals - and trade them.