How To Forecast Coffee Prices?
Price fluctuations of coffee raw material in the markets is subject to several factors, and obviously this variability is one of the principal causes of earnings or losses of growers, distributors and roasters. So, how to forecast coffee prices?
The answer is too complex to be completed in only a few lines, however it is possible to characterize some elements affecting bulk prices.
First of all, the expectations about the next harvest’s volume and quality is the first cause of price fluctuations; then actual harvest volumes are another catalyst of price changes. Market demand is also an important driver, as the global demand for coffee is growing.
So, how will the stocks be when the season is finishing, and distributors find it necessary to empty their warehouses? Prices therefore have a seasonality which follows the rules quite consistently from one year to another. And what about finance? Coffee futures and market speculation are maybe the most important factors in coffee price fluctuations.
Is there relationship between the price of coffee and the price of wheat, soy or cotton? No, at first sight, however all these prices are dropping now. So economic outlook, market liquidity, bond interest, and so on, are important elements affecting coffee price. So, will coffee price continue this decline? Probably, but pay attention to the oil price increase!
