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Put coffee in warehouses, advantages and disadvantages: the case of Colombia

Last week (10-4), Reuters reported inventory in the warehouse Colombian coffee coffee futures floor of the New York Ice surged more than doubled from 7 weeks. News agency also said goods stores are increasingly entering stasis hự quality arabica coffee when demand decreases wet processing and futures market price pressure down.


Only Arabica Colombian origin of the end of last week reached 312,860 bags standard, ie flooring products have been certified quality to the auction.

This media is also suspected that standard inventory of Colombia giant may be used to purchase food entrepreneurs spot the difference.

How can new in Colombia or Brazil or anywhere, but there may be lessons to be drawn business after great success in Vietnam in recent years. In this way, the foreign firms strong capital (by self or joint ventures with financial hedge funds) buying real substance to the warehouse and sell futures (forward) reference price futures if the word .

This is essentially a form of speculation has been condemned many European and American countries, but so far governments have yet to see what is.

When purchasing strong market sales will scarce, they create rumors crop drought frost ... it's great to market and thus create the missing goods sold at artificially high prices for profit.

In the coffee business, there are many ways to make a profit. In this case, if the price difference (plus or minus next step - a differential) with good food and they sold to anyone lacking goods, including exporters in the country to delivery, of course, the price gouging and price differences must be higher than the standard price floor given term.

Thus, sales, business people just see the difference immediately profitable to sell their inventory or warehouse door shut in their country of production at extremely terrible word that was not interested in spending tired export the additional costs cargo.

As for buying, why? Often buy their way no less skillful. When the contract with immediate closing price high, they do not buy that suggest the delivery or sale and reconciling the public to low levels, more often than back to the community. When you buy the cheaper the price difference and a large amount of three hundred or even thousand tons four years, their mission is to sell strongly on the floor, pressed forward price down deep to begin the delivery contract with reconciliation sale a stop at the lowest price, ie the amount of money they had received in advance. Depending on the rate or 50, 60 or 70% of the value of goods on the day of delivery.

So, the first two, is now Colombia arabica, robusta Vietnam, became "blow luck" when one side up, the other down ... are good for their pocketbooks.

If you have advice to Colombia: do not send goods in the hands of big business this way. If sent, the seller always, how much traffic, closing price that much ... Otherwise, press your help with Colombia that ... "surely die"!

(Nguyen Quang Binh)