17th of September, Last Monday, Group of coffee farmers from Colombia demonstrated their Frustration and anger by gathering in front of the European Union Embassy in Bogota. Few weeks ago representatives from Colombia and Brazil gathered at the Brazilian Ministry of agriculture to issue a joint statement on the crisis on the price.
What is this exactly then? Where are we at with the coffee? Let’s break it down.
At this moment, The Coffee Market is at 95.90. Very unfortunate move from again to the down side after all of these again and Bears are in control of the Coffee market measured against US Dollar. So this means if US dollar is getting stronger, Coffee Price will be heading down and Vice versa. Coffee is considered as a highly speculative Commodity market where full of Speculative have their full attention on.
Farmers are experiencing every single problem related to and known to coffee at the moment throughout all over the world whether it is to do with weather or new spreading Bugs …etc. you just name it…it is all there. What happens when these happens? Your Crop Yield will be lower, Production cost will be higher. This is a double effect Folks. Imagine this happens. Well not just this…how about the bank loan folks.it is coming as well. Isn’t it?
Let’s suppose all these things are happening naturally. It is always as we learnt…Supply and Demand. We all heard this right? So, Farmers are struggling to produce coffees, Farmers moving their farms from Coffee to something else for more profitability. So the Supply is getting absolutely lower and lower according to all these going on. Well it does not necessarily mean when the supply goes down, demand will be higher. However in this case, Looking at coffee Demand is absolutely growing higher in Europe being the Biggest Market share (40%) for Coffees followed by North America and Asia is entering Crazy in to the coffee culture. By 2020, the forecast for Coffee market is for Europe is 6 Billion US Dollars. In 2017 Global Revenue for Arabica selling is over 14 Billion US Dollar while total worth over 100 Billion US Dollars. WOW! Evaluation is 100 Billion US dollars
Supply is getting lower and lower. Demand is growing every day for coffee all over the world in fact named as a recession proof business. Then if this all Natural, Price should go higher Guys right. Well it is not that simple. We need to get the accountability of how the Economy of USA is behaving and therefore how the US dollar is starting to perform, because remember, Coffee is Measure against US dollars. So if the US Economy is performing well to an extremely fantastic level, you will not see the same natural Balance in the increase or decrease in coffee due to Supply and Demand of Coffee. The performance of USA will reduce the price of coffee somewhat even though there is a moment we have a High Demand vs Low Supply. Well we have to accept that. That’s how the Economy works.
All these Dollars, Pounds, Pesos…they are nothing but Pieces of papers or a receipt if you like issued against Gold. USD Dollar is measured against the Dollar and the rest of the currencies measured against the US Dollar making it to the most supreme. However they all are pieces of papers where Fed can manipulate us whenever they want to print more money (the receipt for the Gold) than the GOLD they hold in USA.
After a very long rally, Dollar weakened sign has started to appear and we believe it is the Dollar Sell Party. Chart does not show it is yet. Well Our Fundamentals has shown us this very clearly. OK then! all good? Coffee should go up.
Well the problem is here is nothing but Complete Greed and Fear which always interrupt the Balance. You are seeing and experiencing exact issue with Coffee right now. On the 10/2014 as the Chart shows you, exactly on the month coffee international Day is belonged to, Coffee market has dropped from $223.00 to $111.10 area. This is a planned and timed speculation hit which has nothing to do with Supply and Demand or how the US Economy is performing. These are professional attacks to the coffee market. 11/2016 the price has reached to $175.75 and as soon as the price touches the trend line, heavy professional ballistic missiles has attacked again dropping price down to again $111.10 area ,June(06/2018) which has acted as a crucial support. These are again well planned elite Sniper attacks folks.
So let’s go for other commodity like GOLD. Recently as soon as USD starting to weaker we saw a very possible reversal signs. Make sense. If Gold measured against USD then when USD becomes weaker GOLD will rise. All good.
But,the Coffee price is getting lower and lower making this so complicated to understand. It is very simple folks .it is supply and demand. However it is not the Natural Supply and Demand between Farmers and Coffee Consumers. With coffee this has come to the supply and demand between speculators in other words between Bears and Bulls. This is a very unnatural movement and not healthy for the future story of coffee. Gold is a Commodity, a hard Commodity. Coffee is a Commodity, a soft Commodity and has an Expiration period. So when you put the shoe of a professional Speculator, The name of the game is to stay Safe. Maximum profits with the least amount of risk. This is professional trading and in fact and any business should be operated with the least amount of risk. So, are these Speculators Farmers/Roasters? No none of them. Farmers or Roasters hedge their risk. Speculators may not even know even what coffee is or in fact they even do not have to know what coffee is. They would not know the existence of Arabica or Robusta. And as mentioned,does not have to or even need to.
We are not going in to a technical analysis of Coffee, rather a general approach in to the coffee market to see where we are.
So now, what can the European Parliament can do for Bogota Farmers? What do you think? A little help? Write this down folks, they can do only one thing. It is called NOTHING. Can anyone do anything about it? Not really, only Speculators have to stop shorting the market and there will be a natural balance which cannot be achieved when the Greed kicks in, when the Fear Kicks in.
Well, it is too late now. We have created this Paper called Currency and from that moment we started to print this, it went all wrong. Talking about sustainability of Coffee is a plaster on the Gunshot wound. Seriously it is too late.
This is why Mr Soros (one of the most successful speculator) can’t go to Russia, Putin has issued a warrant against Mr Soros. This is why Mr Mandela wrote a letter to Mr Soros asking How he can secure his country from People like Soros or in other words from Speculators. No matter how hard we work. Someone like you comes in and destroy it in a second. This is what it is. We do not know if it can be stopped. However understanding what is happening is better than not understanding what is happening and trying to fix it. Waste of time. It is not the weather, it is not the Leaf rust and it is not Framers are leaving coffee because they found a better solution to coffee. They have no option and this is so unfortunate to be in this situation as a Farmer and it is absolutely shocking.
What happens next? Price has to come above $120.00 to see a better days for Farmers. Then we could say the Sky is just getting clearer. However as soon as the price going to reach the level of 128.00 Area all the professional Elite Snipers will be looking at the coffee market to give the best planned sniper shot again.
A human being, a computer, a software and a mathematical probability has decided again the quality of life of people in a country regardless how hard or Lazy they work and this is very unfortunate and this is what it is. This is why all the papers in 1997 in England reported Mr Soros broke the Bank of England. He has broken the Bank of Thailand…this is not a question of who is doing this. It is a question of whether this is right or not.
The next stage is the Monopoly stage where we see a possibility of all the main Coffee growing Countries come together and forming a credible process and starting to demand.
What are you talking about? This has already happened few weeks ago. We saw this earlier. No surprises for us.
Now this is where you would see now in Europe, your £$2.20 cup of coffee will suddenly become £$4.20. Oh!!!
Well,unnatural balance has to balance. When it is balanced, all unbalanced will get balanced. So when the Gap is filled, then imagine those long time suffering to the farmers, the unnatural unbalanced…has to absorb from somewhere. It will be the other end.
Either we drink Coffee or Don’t. We don’t know. If we drink, be ready to drink the same cup which was £$2.20, now for £$5.00 when you wake up to smell the coffee in the next morning with a big surprise.