Heroes of Ukraine

«Market Leader» - news and previews making you rich.

Monday, 19 August 20:26 (GMT -05:00)



Stock and commodities markets

2011-2012 coffee crop may shrink

coffee

 

Brazil, biggest exporter of Latin America, expects its coffee crop to decline by 13%. One of the reasons for that is the biennial cycle of the low productivity of coffee plants. Nevertheless, this year Brazil expects to harvest the biggest crop for a low-productivity season. It is preliminary estimated at 42-44 million bushels. In 2010 Brazil’s coffee crop was 48,1M bushels.
 
The cumulative export of the other coffee-exporting countries of Latin America gained 22.5% over Q4 2010 as compared to the same period of 2009.
 
In October-December 2010 the coffee exports from the Dominican Republic, Mexico, Columbia, Guatemala, Nicaragua, Honduras, Costa Rica, Salvador and Peru made up 5,405 million bushels. Mexico was the only country that had reduced the export (-17%) while the max increase was shown by Honduras (148.59%) and the Dominican Republic (51.12%). It should be reminded that the previous crop (Oct 2009 – Sept 2010) allowed the 9 countries to export 23,426 million bushels of coffee. The forecast for 2011 is generally positive for the region, which is expected to partially make up for the decline shown by Brazil.
Brazil’s coffee reserves in 2010 declined down to 12M bushels, rather low value for the country. It means that the reserves are insufficient and there is no “safety bag”, which may expand the global deficit of coffee and make the coffee prices grow around the world. The thing is that Brazil is the major coffee producer and exporter (35%). So, even if all the other exporters show positive figures (better than expected) the overall yield will be insufficient.
 
Moreover, Brazil’s domestic consumption of coffee is expected to rise by 5%, which will inevitably initiate an increase in the domestic demand for coffee (by the way, Brazil is the leader among the exporting countries in terms of coffee consumption).  In 2012 Brazil may even outpace the US. The domestic consumption in Brazil has been gaining 4% every year on average since 2003, which has been conditioned by growing purchasing power and consumption of coffee beverages abroad. The mentioned tendency is also connected with the fact that the export growth is lower than the production growth. The consumption of coffee per capita grows faster than the average global value (about 1,5 - 2 % a year). In 2010 the consumption gained 3,4 %, up to  4,8kg per capita (as compared with 4,65kg in 2009). Taking into account the relatively warm climate of Brazil, it is still far from reaching the consumption volumes of Finland, Norway and Denmark (13kg of coffee per capita every year).



график

 

 

 

In Brazil coffee is harvested in April-October, which means that the harvest season in Brazil (the southern hemisphere) coincides with those seen in the northern hemisphere in October-September. That is why the ICO includes Brazil’s current coffee crop in the overall crop of the 2011/2012 agricultural year.
 
The yield forecast for Columbia in 2011 is also unfavorable, predicting less than 9M bushels (the level of 2010). This is going to be the 4th consecutive poor crop of coffee in this country (for comparison sake, the crop yield of 2007 is 12.5M bushels). The main reason is that the coffee plantations were damaged by heavy rains. Many plants are affected by diseases while the treatment is rather costly.
 
As expected, during the last trading week the market of coffee saw the price consolidating within the 230-245 range (created on Jan 22nd). The daily volatility is rather high. However, there are no grounds for the price to make a strong movement during the week as no relevant significant news releases are expected. It should be noted that on Friday, Jan 28th, the price updated the 13-year high once again (the new high is 246,35). There is a seasonal price decline currently seen at the coffee market and caused by the decreased consumption of coffee around the world. That is why no significant price growth is expected in the near future.
 
Low global reserves, steady demand and uncertainty about supplies are the key factors influencing the coffee market at this point. These factors favor a slow but steady increase in the prices on coffee and make the high-quality coffee less affordable. The global production of coffee in 2011 is expected to be between 133 and 135 m bushels (134.6 in 2010). If there is an increase in the global consumption, the coffee prices may rise in 2011.
 
The Department of Commodity Trading, Masterforex-V Academy

 

 

 

You are free to discuss this article here:   forum for traders and investors

 

Text: Maxim Samus
Add to blog
Got a question? – Ask it here »
 

US-China Trade War Makes Oil Prices Drop

The previous trading week wasn't an exiting one. The oil prices grew in the first part of the week while trying to make up for the losses of the previous week. Still, the second half of the week turned out to be a bearish one. WTI oil prices dropped below 55 dollars per barrel while brent oil dropped down to 61 dollars per barrel. Yet, the bearish momentum is still there.

Publication date: 04 August 08:33 AM

Gold Prices At Highest Levels Since 2013

The recent statements made by the governors and presidents of the world's leading central banks, including the Fed and the ECB, eventually resulted ingold prices making it over 1400 dollars per troy ounce. This means that the current price of gold is the highest one over the last 6 years. So, the bull market of gold is underway.
Publication date: 03 August 04:17 AM

Middle East Tensions Support Oil Prices

The currenty trading week has been controversial for the international market of crude oil. Chances are, the market is going to be relatively neutral throughout the rest of the week. Brent oil is trading around 63,50 dollars per barrel while WTI costs 56 dollars per barrel.
Publication date: 30 July 11:07 AM

Is Economic Decline In USA Inevitable?

The NY Fed model points out to the fact that the probability of another recession in the American economy has increased all the way up to 33%. Over the last 50 years, such signals have almost always bee followed by recessions.
 
Publication date: 13 July 08:39 AM

Will USA Manage To Prevent Stock Market Crash?

The U.S. Federal Reserve has eased their rhetorics in order to avoid another stock market crash. International experts are now trying to predict the possible consequences of the decision made by the American financial regulator, especially form the stand point of international investors. 

Publication date: 11 July 11:31 AM

Masterforex-V Names Biggest Stock Exchanges

Stock exchanges have been operating worldwide for many decades. They are specific financial institutions  or marketplaces that operate to let people and companies invet in various stocks and other securities. Those are the stocks issued by various companies representing various industries - from mining to services. These days, you can invest in stocks, indexes, bonds, options, and other securities.
 
Publication date: 17 May 11:57 AM

Masterforex-V Names SSE's 20 Biggest Companies

There are several cities in the world that can be called centers of business and financial activity. Shanghai, China, is definitely one of them. This is the home to China's biggest stick exchange. Shanghai Stock Exchange (or SSE for short) is the world's 4th biggest stock exchange in terms of market cap and number one in terms of the pace of growth.

Publication date: 17 May 11:23 AM

Masterforex-V Experts Call Hong Kong Exchange Financial World's Biggest Provoker

At the current stange of market relations, one can easily define the spots of the biggest economic and financial growth. Apparently, stock exchanges are on the list.On the one hand, the constant turnover of financial assets is a good thing, so is the opportunity to buy or salle a stock without major effort. On the other hand, internatinal experts have been signaling potential threats for quite a long time. At Masterforex-V Academy, they think that the major provoker in the financial world is Hong Kong Stock Exchange (SEHK). By the way, this is the world's 6th biggest stock exchange in terms of market capitalization. Apparently, this kind of significance in the financial world is the key reason for those potential threats.

Publication date: 01 May 01:08 AM

Will U.S. Stock Market Grow This Year?

The American stock market has reached another crucial strange. The forthcoming macroeconomic stats may trigger a major move in any of the 2 directions. International experts say that the future market reaction will depend on a number of macroeconomic stats as well as several events. However, the current bias seems to be bullish since at this point, there are no major reasons to expect another stock market crash within the next 12-18 months.
Publication date: 27 January 07:56 AM

Experts Anticipate U.S. Stock Market Crash This Winter

As you probably know, the U.S. stock market has been in the red zone over the last few weeks. International experts assume that this downtrend is likely to continue in the first quarter of 2019. The key reason is the fact that really huge volumes of risky assets are under the risk of forced sales, Market leader reports, with reference to Forbes.

Publication date: 04 January 04:13 AM