Coffee Traders Forum
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Re: Total ICE Certified Coffee Stocks vs. Non Certified Coffee Stock
The important factor to keep in mind is that total coffee stocks do not necessarily indicate an abundance of coffees that are deliverable against the ICE C Coffee Contract. Part of the problem is that non-commercials/speculators look at coffee as a fungible commodity, no different than soybeans and corn. But in reality coffee demand and use is very origin specific. The ICE C Contract is specific to washed mild coffees such as those produced in Central America, Colombia, and a few other origins. For example, the great majority of Brazilian coffees are not deliverable against the ICE C Coffee Contract. Non-Commercials and Spec Funds typically look at coffee stocks in the aggregate as an indication of what levels the ICE C Contract prices should trade. Fortunately, origin differentials provide coffee producers with the ability to adjust cash prices to levels that make sense for them. We have seen a dramatic rise in differentials for wash mild coffee in recent years.