Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
@ JK -- pods have actually reduced the coffee " consumed " by the largest consumer -- people who were used to filters used to throw a lot of coffee down the kitchen sink, the largest consumer of coffee.
Also I will side with Phil on this one for the short term scenario ---I I don't believe consumption is going to drive the prices up. As we type and read this the high pontiffs of the coffee world are gathering in Geneva and will signal their exploits over a Two day jamboree-- they will also signal where coffee market prices " need " to be so they don't get margin called --- most of them are not but SPVS of banks extending credit to the roasters who themselves extend credit to the supermarket chains. There is no incentive for one of the trwde houses to go under as this will have a cascading effect on all the others so there will be implicit signalling on the level at which business "needs" to be done.
It is a controlled oligopoly - with NO incentive to see Market going up ; I believe on an inflation adjusted basis coffee prices have not actually gone up since the 1970s ;
In the Long term the scenario is different
Asian consumption is growing but of 3-1 variety where coffee is maximum 10 pct of a sachet, sugar and non dairy creamer being the balance.
Japan's consumption of coffee has stalled around 250 cups of coffee ( 10 gms. Basis) per capita - while china is at around 12 if you look at the coastal regions only - this number is much less if you Look at the whole population base. Coffee is still an aspirantional / luxury drink in china and labourers prefer to have their tea infusions. When labourers in factories and fields switch to 3-1 it will still move the needle but no one knows by how much.
Indonesia on the other hand is growing at a cagr of 23 pct where the country from being a net exporter has become a net importer of coffee ! And prices offered internally for robustas and arabicas are higher than what Prussian Traders could offer.
The Philippines consumes more or less 60 000 tonnes of coffee pa. and also growing at a decent clip fuelled by growing middle class i he define sector.
At the going rate --- within 10/15 years the whole of Vietnam crop could essentially be taken up by Asian consumption.
Voila my three cents !!!