Coffee Beans to halve

Coffee prices are at historically high extremes.

Across various measures, Coffee is overbought and stretched.

In the chart below, the month of December 2021 shows the contract price of Arabica coffee at 105% above its 200 weekly moving average.

It’s quite uncanny that “105%” has been seen at previous peak moments.

And remember, parabolic moves are often met with a sharp retracement. The price should eventually come back and kiss that 200 week average.

A falling coffee price bodes well for companies such as Nestle and Starbucks. These companies can acquire beans at cheaper levels but not necessarily reduce their retail prices.

They can justify any backlash by citing rising labour or wage costs.

By the way, just like the price of beer, I’ve never seen the price of coffee decline at the retail and premium level.

So, in other words, the price of coffee beans may halve but the price of your coffee beverage will firm.

February 2, 2022

by Rob Zdravevski

rob@karriasset.com.au

Coffee filled the gap

Hello coffee lovers !

On Friday night, 2nd chance to buy coffee at $1.05 happened.

Arabica Coffee futures traded to $1.0490.

Will keep you posted how it turns out.

Rule # 1: Be sure to roll over your futures contract otherwise you’ll need a lot of room if you accidentally take physical delivery.

https://robzdravevski.com/2020/09/29/2nd-chance-to-buy-coffee/

Buy a container of coffee beans

The price of arabica coffee has fallen to 4 year lows. (Are you paying less for your coffee lately?)

While the demand for coffee has remained steady for the past decade, only recently has supply increase, thus explaining the fall in the price of the commodity.

Compare this to the 1,000 cups that each Norwegian or Finn drinks, each year, which is equivalent to about 10 kilograms (kgs) of coffee.

Although Scandinavians love their coffee, the largest coffee market in the world is the United States of America, where it’s averaged that each person consumes 4 kgs per person, each year.

Roasted coffee beans Español: Granos de café t...So where is the upside?

The tea-loving Chinese only drink an average of four cups of coffee, per person, per year.
Just imagine if the Chinese taste buds change as Starbucks and Espresso bars start popping up around the place?

Or perhaps a wider group of Americans increase their coffee intake.
If that story doesn’t pan out, recent studies suggest that drinking coffee can halve the risk of suicide. As mental illness becomes prevalent and should the economy deteriorate again, it’s plausible that drinking more coffee could be added to a doctors prescriptions.

Although that advice won’t help the growing insomniac population, which is a future blog post topic.

So, with prices being low, it’s not a bad idea to go and buy a shipping container full of raw, green Arabica Coffee and keep them for a while.

“Green” coffee beans that are stored in a dry environment can last for up to 10 years.
Furthermore, stored beans are then considered “aged beans”, which over time lower their acidity and increase their body.

Just An Idea!

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