Coffee futures price increase factors coffee common sense

Coffee futures trade coffee beans, and futures are both an investment and an increase in coffee. The increase in coffee lies not only in the origin, good or bad, but also for many piecemeal reasons. In the coffee futures market, the main factors affecting the price of coffee beans can be summarized as follows:

1. Changes in supply: supply and demand have a certain impact on prices, changes in supply will become a decisive factor in short-term price changes, the main focus of the market is focused on Brazil, Colombia … And other major producing countries. Although Brazil is not the target for delivery of ICE, its production supply has also become a reason for fluctuations in coffee bean prices because of its high production.

two。 Climate and insect pests: plant growth is subject to climate conditions and insect pests, and so are coffee trees. Although most countries in Latin America have a mild climate and stable rainfall, Brazil has a very important position in coffee farms because of its abundant production. Every year, June to July is the Frosts Descent season in Brazil, and the impact of frost damage has become one of the factors affecting prices. In addition, Arabica beans also reduce production due to insect pests, especially in the Eastern Hemisphere, but in recent years, pest control technology has improved, and the cost of pest control has also been reduced, so the problem of insect pests has also been greatly reduced.

3. Government policies and measures of international coffee organizations: the policies implemented by the governments of coffee-producing countries are also the focus of the coffee market, and the government's policy changes will also affect the production and marketing of coffee, especially Brazil, the largest producer. When the Brazilian government decides to store a large number of coffee beans, it will push up the price of coffee beans in the short term, whereas releasing a large number of coffee beans will lower the price of coffee beans. Although Brazil's government policy seems to have a big impact, when it stores large quantities of coffee beans, it will improve Colombia. The coffee market share of other coffee-producing countries, so the International Coffee Organization (ICO) composed of producing countries sets the total amount of coffee exports and export quotas of various countries to curb supply and maintain coffee bean prices.

4. Strike and market rumors: when major export dock workers go on strike or strike rumors, market expectations will lead to an increase in inventory, which may lead to a short-term rise in coffee bean prices. and coffee beans are mainly produced in developing countries, strike … Market rumors are heard from time to time, so it is easy to have a short-term impact on prices.

5. Seasonal factors: winter in the northern hemisphere is the biggest consumption season for coffee beans, so prices soar as a result of inequality between supply and demand. In addition, since Brazil has a coffee harvest period from April to August, if any large-scale seasonal climate damage occurs during this period or at other times, it will easily lead to a surge in coffee bean prices. There is usually a high chance of a low price in June-July of each year, and then it will gradually stabilize until it may reach a high in January-February.

The global trading volume of coffee beans is second only to crude oil, which is a major trading commodity, and its price rise and fall is more related to the political and economic stability of producing countries, so it has become a global speculative commodity. According to the actuary of the producing country, the price of coffee beans should be more than US $1 per pound before small coffee farmers can recover their profits.Therefore, when coffee beans fall below the US $1 mark, it will cause tension in coffee-producing countries and implement measures to store leftover beans. and it also makes many investors very interested in the sale of coffee beans.