While 2014 has been a total wreck for oil investors, coffee traders are dancing in their pajamas as the precious beans’ price has seen an unprecedented climb. The coffee price peaked at $2.29 per pound on October last year for a gain of 43 percent, data from financial visualization service FinViz showed.
The steep spike in coffee price is caused by massive drought in Brazil, the world’s largest supplier of coffee beans, and fungal infection in the stocks of Central American coffee producers. These factors, as well as the growing demand for coffee worldwide, will contribute to a steady climb of coffee price in the coming year, insiders warned.
While 2015’s shortage will not be as bad as last year’s, coffee traders are still betting on continued price increase. Thiago Cazarini, president of Cazarini Trading Co. expressed his reservation about the sufficiency of supply for this year, pointing out that rains in Brazilian plantations may not be enough to stabilize the harvest. “A lot of the fruit will not develop, and that could lead the market up.”, he volunteered.
A report from US Department of Agriculture predicts that coffee drinkers will down 147.6 million bags of coffee for 2015 for a 3.7 increase from the previous year. Most of the increase will come courtesy of consumers from the US, Asia, and Europe where coffee is the most beloved morning drink.
This is bad news for Starbucks fans as the giant chain, as well as other big time coffee retailers, are sure to pass on the price increase to their consumers.
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With over 20 years experience in the heart of the investment industry, Ben Myers has become one of the most respected commentators in the financial world. Having worked for global institutions such as HSBC and Bank of Ireland, Ben ran his own successful investment company in the UK before becoming a chief analyst at ECMarkets and now YesOption. Ben remains a keen forex, stocks and crypto trader and is a regularly featured analyst for a number of online news portals including bbc.com, investing.com,