Traders: A Coffee Crash Is Coming


Source: BusinessInsider.com

Coffee is about to crash.

Well, at least that’s the view “shared by senior executives and traders, which for the last few months had been challenging the “blue sky” outlook laid by producers’ associations,” the Financial Times reports.

Earlier this year, everyone was sure that coffee prices were going to continue to climb, as a pound of beans was selling for more than $3 a pound.

The rise in prices of the worlds second most traded commodity was mainly attributed to growing coffee markets in Asia and Latin America, and producers looked forward to a new norm of sustained high coffee prices.

But traders and financiers, as articulated below by Dutch bank Rabobank (which lends heavily to the agribusiness industry) think coffee is just another boom-and-bust cycle, and if Brazilian output surges, the price of coffee could nosedive.

Continue sipping…

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