Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
Looking for positive trends, a string was started yesterday on the CTF about global coffee consumption. Given that demand is a long term dynamic, this author noted that consumption is not a short term savior. This author further noted that coffee production is on the upswing across most origins.
When analyzing coffee prices, one needs to separate:
-Short Term & Long Term Dynamics
-Robusta vs. Arabica
-Nam, Brazil & Rest Of The World
-Production, Inventory (multiple levels) & Consumption
From a long term price positive perspective, hard not to notice that prices are no better than the 80s while costs continue to increase. From a risk management standpoint, I&M has noted that commercial farmers in many parts of the world are already starting to plant out alternative crops. If this trend were to develop in Brazil, it could have a major impact on coffee supply.
In support of this trend, Lionel (I&M) has noted from personal observations the increased interest in Macadamia Nut & Avocado production in lieu of coffee in Africa, Vietnam and Brazil.
The aforementioned are high value crops, not subject to the uncontrollable influences of the futures market and have a still developing high value consumer market.
Vietnam state research stations are already producing the seedlings and are looking to assist farmers increase the mix of their crops as a risk management tool.
Mature Macadamia & Avocado trees benefit from attractive economic & production dynamics. Indeed, the Chinese, North Americans and Europeans are certainly paying up for Macadamia nuts.
FURTHER CTF CONTRIBUTIONS ON ALTERNATIVE CROP PLANTING AT THE EXPENSE OF COFFEE IN BRAZIL AND ELSEWHERE WOULD BE VERY INSIGHTFUL.