Black Gold In The Coffee Market
Is coffee really the black gold on the world market? Well, the color of coffee is actually closer to dark brown, but it is very expensive. Have you gone into your local market recently? The price seems to fluctuate more than any other product I can think of. One week it is five dollars a can and the next week it has gone up to ten dollars a can. Why is that?
Weather
Far and away, Brazil is the world's largest coffee producer. But because of where this country is located and its geographic make up, the weather can be really crazy and unpredictable. Cold weather months in Brazil are typically June, July and August.
Rainy months are September, October, and November.
Too much cold weather and/or to little or not enough rain can affect the quantity and the quality of the coffee crop. A really bad frost can wipe out a big portion of the world's coffee supply in one day. In addition, a bad frost can ruin a plant's ability to produce for two or three years
Commodity
Coffee is a commodity traded on the big coffee market exchanges around the world. Beans and corn are also commodities traded around the world, but nothing fluctuates like the price of coffee. Coffee is the second largest import into the United States, second only to oil. Sure, the price of oil fluctuates as well but nothing fluctuates like the price of coffee.
To make money in the coffee market, just like in the stock market, you have to be able to predict accurately which direction the price is headed, up or down .A recent trend in the Brazilian coffee market that may help stabilize the world wide price of coffee in the future, is that greater numbers of coffee farmers are moving north in the country, where frost is less likely to destroy crops.
The Caffeine Factor
Some people would claim that no other drug drives America like caffeine -- not even nicotine. Can you imagine how all of your friends' personalities could change if they all woke up in the morning, and there was no coffee to be had? There would be lots of headaches and no one would have any energy.
Will Growth Continue?
According to world coffee market experts, the demand for coffee around the world will continue to grow by leaps and bounds for at least the next 30 years. The biggest reason given by these coffee market experts is that China will become the world's largest consumer of coffee. Even if, by 2020, the Chinese only average only one cup a day, that would translate into 50 billon U.S. dollars
Truly then, coffee is the black gold on the world market.
