Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
Hello LeGrai. EFP activity during delivery, or notice, period is usually related to both the consumer side and the producer side arranging or customizing their respective requirements. As we know both sides hedge well before delivery time. We also know that the premiums and discounts dictated by ICE are not acceptable to producers while the consumer end is happy to pay market rates. In addition to this, the consumer end can customize the quality that they wish, the point of delivery, etc. Both sides contact their respective trade houses to arrange to swap their future hedges for the physical desired. This is my view of their intentions and not necessarily what actually happens. It's possible that there are other reasons as well, like finance swaps of some kind. Good trading.