Why commodity traders have had such an influence on the coffee market


	Why commodity traders have had such an influence on the coffee market

BirdBarista

7-16-2008 4:11 PM

1784 views

BirdBarista says:

A lot of the volitility and high market prices this year has been due to speculative futures trading. I had wondered why this was so influencial this year, and this article summarizes another piece in the trade press on how these markets have changed and why the market price of coffee has a lot to do with folks who have nothing to do with coffee.

The original PDF is at
http://www.coffeetalk.com/images/CTJun08web.pdf

(BTW, I believe this applies to oil prices as well.)

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/cef365e6-a24d-42f6-8a18-3f0efe2dc241/30FB8158-3EFF-4834-A2FE-C347C5C11E5D/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://beanactivist.wordpress.com/2008/07/16/world-coffee-market-the-impact-of-speculation/" href="http://beanactivist.wordpress.com/2008/07/16/world-coffee-market-the-impact-of-speculation/" style="font-size: 11px;">beanactivist.wordpress.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://beanactivist.wordpress.com/2008/07/16/world-coffee-market-the-impact-of-speculation/">This year, the world coffee market saw more volatility than in years past due to increased speculation by  a new wave of traders.</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://beanactivist.wordpress.com/2008/07/16/world-coffee-market-the-impact-of-speculation/">Commodity speculation (including coffee) in the United States changed fundamentally . . due to a rather obscure piece of legislation written by Republican Senator Phil Gramm that substantially relaxed, and in many cases eliminated completey, federal regulation of futures trading in American commodity markets.</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://beanactivist.wordpress.com/2008/07/16/world-coffee-market-the-impact-of-speculation/">Couple this with last year’s purchase of the New York Board of Trade (NYBOT which housed the arabica coffee trading system in addition to cotton, sugar and other commodities) by the Intercontinental Commodities Exchange (ICE), a British electronic energy marketplace. </blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://beanactivist.wordpress.com/2008/07/16/world-coffee-market-the-impact-of-speculation/">The sale of NYBOT to the ICE made it even easier for non-commercial investors to get in - in a big way - on the commodities futures action</blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/30FB8158-3EFF-4834-A2FE-C347C5C11E5D/blog/" title="blog or email this clip"><img src="http://content7.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>

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