Ag Analysis Report - 10/5/19 - Is Starbuck's Coffee Supply In Danger???

rollandthomas (74)in #steemleo • 5 years ago

It has been said the first coffee shop opened its doors in 1457 in Constantinople, modern day Turkey when the shop turned this funny looking seed into coffee. It has also be said coffee originated in Ethiopia over thousands of years ago, but made its way to France and Italy buy way of Turkey. Fast ward to the 21st century and Starbucks pollinating the world and made coffee a must have morning and evening beverage.

However, Starbucks wasn’t able to pollinate the world with coffee without of help of many Centrial America coffee farmers. And Starbucks will do everything in its power to ensure their supply chain of coffee beans is sustained.

Starbucks Corp. is giving farmers a cushion against the blow of tumbling coffee prices, a move that could also protect supplies of the high-quality beans the company needs.

The world’s largest coffee chain operator paid over 8,000 farmers in Mexico, El Salvador, Nicaragua and Guatemala a premium totaling $20 million, according to Michelle Burns, senior vice president of global coffee and tea at Starbucks. That’s on top of the regular amounts it pays over futures prices for specialty arabica beans, she said.

With prices falling below production costs in many countries, shielding those who produce the beans the company purchases is especially important for Starbucks. Growers from Colombia to Mexico are struggling to compete with ever-rising output from top producer Brazil, where a weaker currency has meant many farmers there are still making money.

As Brazilian output kept expanding, futures fell this year to their lowest in more than a decade on the ICE Futures U.S. exchange and are hovering around $1 a pound.

source

So where is the price of coffee headed next, lets go to the charts to find out?

Monthly Chart (Curve Timeframe) - the monthly demand is at $77 and monthly supply is at $120.