Tag Archive | "commodity coffee prices"

Have Your Cup and Drink It Too with Rising Commodity Coffee Prices

Commodity Coffee Prices Are On the Rise

commodity coffee pricesWith commodity coffee prices on the rise, there is no doubt that coffee is a sound investment for many investors. Since the 1990’s, coffee has seen a resurgence in popularity across the Western world. Numerous high-end coffee chains have earned acclaim, and money, for their gourmet roasts and relaxing atmospheres. When the economy went into recession, it seemed like the coffee industry might suffer. Many people were no longer willing to pay five or six dollars for a cup of coffee. Instead of giving up gourmet coffee altogether, however, consumers have shifted to a more direct buying method. They are avoiding the middle man by ordering gourmet beans from the roasters themselves, and are brewing fresh coffee in their homes. While this shift does not bode well for the coffee chains, it is beneficial for many investors. Sustained sales are pushing commodity coffee prices higher and it seems that the coffee industry is as healthy as ever.

Commodity Coffee Prices: Protect Yourself from a Bad Growing Season

If you are interested in investing in coffee, there are a few things you should consider before making your first move. Commodity coffee prices depend largely on the health of the coffee crops. Coffee beans are grown in a number of key areas around the world, such as Indonesia, South America and South Africa. One way to avoid the negative effects of a bad growing season is to diversify your investments. Research the climate and weather in each country and find out which tends to be the most stable. You should put most of your money in beans from this country, but you should also invest in coffee from several other locations. This will help cut your risk in case weather changes or disasters cause commodity coffee prices to fall.

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How to Evaluate Commodity Coffee Prices

Analyzing Commodity Coffee Prices

commodity coffee pricesIf you want to invest in a commodity coffee prices should be analyzed to determine whether or not the coffee market is a suitable place for your investments. Like any commodity, coffee prices will be affected by supply and demand. Therefore, environmental, political, and economic factors will all play a part in determining its value.

Current Commodity Coffee Prices

As of August 30, 2011, Coffee Robusta is trading at 123.75 cents per pound. In January of this year, prices were under 107 cents per pound. There has been an increase of about 30% in the past 12 months of commodity coffee prices.  This makes it a good commodity choice for 2011, with great prospects for 2012 as well. Other top performing commodities of 2011 include crude oil, corn, and gold.

Contributing Factors

Environmental factors which may contribute to a decrease in supply include drought, flooding, and disasters—hurricanes, fires, and tornadoes. Problems like these may result in a decrease in supply. A lower supply, combined with high demand, will result in an increase in the crop’s value. Meanwhile, an oversupply of the product will translate into lower market prices.

Economic and political factors can also make an impact upon the market value of coffee. A depressed economy may result in lower demand for coffee, due to consumer uncertainty. Policies affecting taxes and trade can also play an important role in the rising and falling of commodity coffee prices.

When you are evaluating the commodity market to determine whether or not to invest in coffee, be sure to look at past performance trends. Note significant rises and dips in value, and try to determine possible contributing factors that could have caused the dramatic changes. Analyzing commodity coffee prices is an important step in determining which stocks in which to invest.

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