www.coffeenetwork.com Andrea Thompson Head of Research and Analysis CoffeeNetwork, a product of FCStone LLC
CoffeeNetwork is a product of FCStone, LLC. Andrea Thompson is an independent consultant to FCStone, LLC for the CoffeeNetwork service, and is not an employee of INTL FCStone, Inc. or its subsidiaries. These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the viewpoints and trading strategies employed by FCStone, LLC. All forecasting statements made within this material represent the opinions of the author, without exception. This material should be construed as market commentary, merely observing economic, political and/or market conditions, and not intended to refer to any particular trading strategy, promotional element or quality of service provided by FCStone, LLC. FCStone, LLC is not responsible for any redistribution of this material by third parties, or any trading decisions taken by persons not intended to view this material. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Contact FCStone designated personnel for specific trading advice to meet your trading preferences. Derivatives such as futures, options, and swaps involve substantial risk of loss may not be suitable for all investors. You should fully understand those risks prior to trading.
Eurosport Wed, Nov 6, 2013 10:51 GMT Tour de France - The real reason Cavendish left Team Sky Mark Cavendish has revealed that an incident with a coffee machine was the tipping point that led him to leave Team Sky.
World Coffee Market 2013/14 Changing Dynamics Biennial cycle no longer Return to over production Focus on demand make-up
Global Picture World Balance - CoffeeNetwork Estimates (million 60kg bags national crop years) 135 105 75 45 15-15 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Production Consumption Balance
Mln bags Global Picture Robusta Trend Profile CoffeeNetwork Estimates (million 60kg bags national crop years) 60 50 40 30 20 10 0-10 2000 2002 2004 2006 2008 2010 Crop year beginning 2012 Production Consumption Balance
Mln bags Global Picture Arabica Trend Profile CoffeeNetwork Estimates (million 60kg bags national crop years) 80 70 60 50 40 30 20 10 0-10 2000 2002 2004 2006 2008 2010 Crop year beginning 2012 Production Consumption Balance
Mln bags CoffeeNetwork Estimates (million 60kg bags) 90 80 70 60 50 40 30 2000 2002 2004 2006 2008 2010 2012 Crop year beginning Arabica Production Robusta Production Arabica Consumption Robusta Consumption
ICO Weighted Average Price Trends 2005 2013 (cents/lb) 300 250 200 150 100 50 0 2005 2006 2007 2008 2009 Colombian Milds Brazilian Naturals 2010 2011 2012 Other Milds Robustas Mar-13 Jun-13 Sep-13
Arbitrage: Arabica v. Robusta Historic High = $2.00-85% Arb reached $0.30
Mln bags WORLD CONSUMPTION CoffeeNetwork Estimates (million 60kg bags national crop years) 160 140 120 100 80 60 40 20 2001 2002 2003 2004 2005 Crop year beginning 2006 2007 2008 2009 2010 2011 2012 2013 Exporters Importers Total
Dynamics of Demand Consumers as demanding for at-home as out-of-home Explosion in single-serve Continued emerging markets demand growth
WORLD CONSUMPTION Single Serve Cups Market Share 6% 16% Green Mountain Starbucks 18% 60% Schmuckers Others Source: "Single Cup Brew Beverage Products in the U.S." Packaged Facts. 11 Jul. 2013
US Projected Capsule Consumption 5.0 Billions of Capsules 1.0 2011 2012 2016 Source: "Single Cup Brew Beverage Products in the U.S." Packaged Facts. 11 Jul. 2013
Dynamics of Demand Emerging markets new middle classes/new consumers, soluble coffee, single serve coffee, coffee shops. Traditional markets increasing athome consumption, single serve coffee
Dynamics of Demand 2000 2010 2011 2012 Forecast 2020 TOTAL 105.97 137.02 139.05 142.00 174.50 Traditional 63.59 71.00 70.71 71.40 79.10 Producing 26.39 40.91 42.40 43.47 64.40 Emerging 15.99 25.11 25.94 27.13 31.00 Source: ICO million bags
Dynamics of Demand Producing markets continued growth given focus on securing a solid domestic market Ethiopia the longtime example, Brazil and India now the leading examples
Producers Coffee Consumption (CoffeeNetwork Estimates - million 60kg bags national crop years) 45 40 35 30 25 20 15 10 5 0 2000/01 2006/07 2012/13 Brazil India Total
Dynamics of Demand Producing countries can limit the impact of global price declines if they have a healthy internal market Production costs / strategies in focus again given the price erosion
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