Coffee prices... like bank interest and petrol.

[TEPIN]

http://newsvote.bbc.co.uk/2/shared/fds/hi/business/market_data/commodities/11705/twelve_month.stm

[Javaphile]

Re: Any Idea Why

The entrance of several big players into the coffee business (Dunkin Donuts and McDonalds are two), increased transportation costs, and the falling dollar are three causes that immediately spring to mind.


Java "Time to stock up, now!" phile

[TEPIN]

Re: Any Idea Why

Mikyds has been a Player for years , Dont know much about the size of Dunkin Donuts in the Market Place? The Northern Peso sure is taking a Hammering, ? How much of the Worlds coffee supply does the US Take? - 20%..

[JavaB]

Re: Any Idea Why

Tepin,

A quick Google search shows America is the worlds largest consumer of coffee.... consuming 1140 million Kg per year..... or about 26% of the worlds production...

So American demand would have a HUGE impact on price!!

[Javaphile]

Re: Any Idea Why

Mikyds has been a Player for years , Dont know much about the size of Dunkin Donuts in the Market Place? The Northern Peso sure is taking a Hammering, ? How much of the Worlds coffee supply does the US Take? - 20%..

While Micky Ds has been a player for years their involvement has been in lower grade coffees. They are only now getting into the higher grade coffees in any sizable amount.

I know that Micky Ds has been serving their premium coffees in Oz for some time now. Such is not the case in the US. It appears that they used the Aussie market as a testing grounds for their new premium coffees before releasing them on the US populace. Micky Ds premium coffees only became available here in the US about 6 months ago, and Ive still yet to hear of any of their stores selling espresso drinks.

Dunkin Donuts is now selling their coffee to take home and brew. Not just from their donut shops but in grocery stores as well, and theyve launched a national advertising campaign to kick off sales.

3/4s of the beans imported to the US are arabica. While a quarter of the worlds total coffee production goes to the US, a third of the worlds arabica supply ends up in the US. Any increase in demand for more arabica beans (most of the new offerings here are advertised as 100% arabica) in the US will have a disproportionate effect on the already tight arabica bean market/prices.

I dont know about the rest of you but Im doing a major restocking now before the big price increases hit with the arrival of the spring harvest in a couple of months.


Java "Ordering up a pile O beans" phile

[robertmc]

Re: Any Idea Why

From my perspective as a trader, coffee has been in a serious bull market (Up Trend) since beginning of 2002, when the price of coffee reached a low of $42 (USD) now fetching $158 per contract

These changes arent recent

Robert

[Javaphile]

Re: Any Idea Why

From my perspective as a trader, coffee has been in a serious bull market (Up Trend) since beginning of 2002, when the price of coffee reached a low of $42 (USD) now fetching $158 per contract

These changes arent recent

Robert

While it is true that rising coffee prices are nothing new after tanking in 2001/2002, the market is again spiking upward similar to what was seen after Katrina.

In the last 9 months coffee has gone from just over $100 in May of last year too over $160 just a few days ago. Thats an increase of 60% in 9 months with half of the increase coming with-in the last month.

These changes are indeed new and will soon be reflected in the resale marketplace. Importers and wholesalers here are already starting to raise their prices with most that Ive talked to recently expecting to see price increases of around 30% for the spring deliverys.

Wholesalers here are already seeing the effect in their warehouses as people place orders now to avoid the big increases coming down the pike. Several of the importers Ive talked too with-in the last week reported shortages of many popular beans with no more expected in until the spring deliverys hit the ports.

So in short, expect to see some pretty significant price increases coming soon to an importer near you!


Java "Stocking up!" phile

[luca]

Re: Any Idea Why

I have heard a bit of perfectly sensible speculation that coffee futures have been driven up by people wanting to put their money in something other than the stock market.

Personally, I think that its about bloody time that coffee prices rose across the board. Im happy to pay decent prices for green as long as the quality is there. Lets face it, if you value your time at a relatively miserly wage, youre not saving much, if anything, by roasting coffee at home.

Cheers,

Luca

[Thundergod]

Re: Any Idea Why

I thought coffee futures WAS on the stock market.

[robertmc]

Re: Any Idea Why

I have attached a snapshot of the chart of coffee price from 1996 to 2008

What do you think is the change in coffee price in last 12 months? What do you think will happen in the next few months?
Javaphile I think that we can both agree that coffee is getting very expensive recently

Robert

MODS: please delete this chart, its too big to get proper perspective


Chart removed as per request - Javaphile

[robertmc]

Re: Any Idea Why

Im sorry the chart is too big, try this one

[robertmc]

Re: Any Idea Why

This chart is easier to see,

Mods would you please delete the previous image

As you can see from the chart it is not unusual for the price of coffee to rise very high at various periods in recent history.

So what does it mean? I really dont have much idea, I just try to buy it when it is going up, but surely it reflects the overall supply and demand factors in both coffee production and consumption. Others on this board probably know more about why specifically

Robert

[robertmc]

Re: Any Idea Why

And Thundergod

There is a real difference between the commodity market and the stock market, though they are both trading markets.

In the stock market people are actually buying shares in a company and becoming shareholders of that company with voting rights etc.

In the futures market, though it is bit artificial, people are buying and selling the actual commodity such as coffee, and at the future expiry date of the contract they end up with a very large sack of coffee beans

And Luca are people leaving the stock market to buy coffee futures? I have no idea how you find out, Though certainly speculators and traders do invest in these markets as well as the actual commercial producers and suppliers. Any way, I would want to be a speculator in the coffee market at this time

robert

[yeeza]

Re: Any Idea Why

Cool, I feel all the more smarter after this economics lesson. Thanks for the info guys.

[Javaphile]

Re: Any Idea Why

Having taken my own advice heres what arrived on my doorstep Friday.


Java "Set for a few months" phile