Distributors usually anticipate demand for coffee before buying ahead for the winter, in order to refrain from uncertainty and loss, as coffee usually starts its process of bottoming before they make their decision, as stated by Commodity Trader’s Almanac in 2013. This is meant to be the perfect time of year to start a seasonal trade which in effect is in the month of May. The best short term opportunity in trade is made along this side for gain increments and better demands from different segments of the market.

It is a positive outlook for traders to look for a position to enter into the market near August 18^th which must be maintained until around September 5^th. It is common for the trade to end near Labor Day as coffee prices continue to increase rapidly. In the past 40 years, this tactic has worked around 26 times which gave a rate of success of about 65.0%. A gain was posted each and every year starting 1986-1997 which has had a late spotty record for eight of the 16 years.

The popularity of coffee has hit such a high worldwide in the past couple of decades. The majority consumption of this beverage was from the U.S., Canada and places in Europe. According to the Harvard School of Public Health, 54% of above U.S. citizens above the age of 18 drink coffee each day. With such popularity, a change in prices is definitely on the verge to strike the market.

Europeans have changed their tea preference to coffee with time. The introduction of Starbucks (NASDAQ:SBUX) in 2005 caused an increase of sales in both Asia and Europe. Demand has been increasing since, for better quality coffee along with high graded coffee. The target market includes every age of consumers with varying choices in coffee types. With such a strong presence of this beverage in Europe, a stir in the economy has caused a change in consumer preferences from the traditional drinks to the new modern need!

Since it is being consumed globally, threats have increased by suppliers and production has declined to some extent for high grade coffee. Ups and downs in prices are expected in the near future with such changes in demand.

The current year experienced a coffee surge of 100% for the three months because of drought in areas in Brazil. The conditions have not yet been cleared to the fullest and both quality and production may suffer in the current year due to this scenario. It may also prevail in the future as predicted because of which floor prices must be set for coffee after an amount of time which should remain constant for years to come.

With such downturns in the economy, it will be difficult for coffee lovers out there to continue enjoying this product. Even with circumstances getting better, there is still a strand of change that can cause volatility in prices around the world since suppliers and distributors are experiencing doubt.

 

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