Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
Arabica coffee prices have been at a minimum for the past 2 years.
They say they are working on the loss. Still, some of them really are, especially those who own crops in higher places that can not mechanize their crops.
Unfortunately, I do not see improvements in the short term for the situation of the Brazilian producer. There is plenty of past-stored coffee (the best coffees are left to be sold last). Few future sales were made due to the low price. Whenever prices start to improve the producers will fix these future sales, pushing prices down.
And worst of all, we'll have a good crop in Brazil. I have already said that in my opinion the next harvest will be around 58 million bags (20% above the previous harvest). It will not be a super crop, nor a small crop. A crop compatible with positive biannuality.
Prices are very depressed. But what can the producer expect? There is no public policy regarding production, stocks, sales prices, etc. In my opinion the producer will have to sell his stored coffee at the market price until the beginning of the next harvest, unfortunately. Feedback the down cycle.