Coffee Price

vivian

New member
Feb 28, 2004
3
0
Hi to everyone. I'm from india and own a coffee plantation. I had a couple of questions:

Some of you might be plantation owners or dealers in coffee, how do you predict the market price for coffee, is there any particular source for coffee prices ? i know nybot.com, but does it really reflect the prices in your country. We are at the mercy of local dealers who quote low prices. And any bullish trend in prices cannot be predicted. Its disppointing that as a internet literate that i have not been able to anything.

Any suggestions are very welcome.
 

Gulliver

New member
Mar 14, 2004
5
0
Buffalo. NY
In the US, coffee is just another commodity item; like gasoline, sugar, etc. The price is set by how high the corporations who control it are able to set it. If there is a news story about an increase in coffee prices due to poor weather conditions, the price will go up as the perception of supply is unbalanced and the general public will be willing to pay more to maintain the supply to feed their demand. Resellers generally get blamed for the price increases, but actually will make less money when prices are high as there is more price shopping by consumers and more competition for business. Suppliers, like you, will not fair well either, as there probably will be some truth in the cut in supply, like bad weather, but the corporations purchasing the goods will have alternate sources and always will be able to find a low price. For example, when sugar became very expensive, companies not only looked to different countries for supply, they started using corn syrup as their sweetener offering.

As a grower, it is your “gameâ€
 

Mr. Bingley

New member
Mar 16, 2004
5
0
Gulliver said:
In the US, coffee is just another commodity item; like gasoline, sugar, etc. The price is set by how high the corporations who control it are able to set it.

while this view may have a certain romantic politically-correct cachet to it, it is simply false. firstly, coffee is 'just another commodity item' all over the world, not simply in the us; europe as a whole consumes more coffee than the evil us, and in fact re-exports to the us the majority of the decaf consumed here. the fob price, which is what concerns vivian, is established as a differential to the new york 'c' (for arabica) futures market. there are no 'corporations that control it'. you are putting the cart before the horse. the futures mkt, which is a reflection of where the participants feel the fair value should be, sets the price for the corporations, not the other way around.

If there is a news story about an increase in coffee prices due to poor weather conditions, the price will go up as the perception of supply is unbalanced and the general public will be willing to pay more to maintain the supply to feed their demand.

and that perception very often becomes reality. and yes, people will pay more; consumption is very inelastic with regard to price.

Resellers generally get blamed for the price increases, but actually will make less money when prices are high as there is more price shopping by consumers and more competition for business.

some will make less, but others will make more; people will indeed move from brand to brand at the retail level, but, again, the basic amount consumed will not vary too much

Suppliers, like you, will not fair well either, as there probably will be some truth in the cut in supply, like bad weather, but the corporations purchasing the goods will have alternate sources and always will be able to find a low price. For example, when sugar became very expensive, companies not only looked to different countries for supply, they started using corn syrup as their sweetener offering.

sorry, but this shows a complete lack of understanding of coffee and the coffee market. coffee is not like sugar at all. sugar is sugar.is a santos brazil interchangeable with a colombian or a kenyan or a plantation grade from india? of course not. most roasters sell a blend of different coffees from different origins, and they try to maintain a consistant flavor profile. they will not 'always be able to find a low price'; they may be able to find useable coffee from another origin at a cheaper price than you may want to sell, but that's a different animal and that's their job. suppliers in countries outside of brazil do exceedingly well when there are frosts in brazil, as they are able to offload their stocks at very high prices to roasters scrambling to replace the brazils. the problem becomes that at high prices too much coffee gets planted, and 3-4 years down the line there are huge surpluses.

As a grower, it is your “gameâ€
 

Gulliver

New member
Mar 14, 2004
5
0
Buffalo. NY
Thanks Mr Bingley...

Actually, I was going for the romantic pollitically-correct cachet. What do you want from me, I was in the computer industry - recently removed. Truth is, vivian's question sat nearly a month and needed some response. Thanks for adding to the topic.

Anyone else?

Anyone agree with me a little?
 

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