Dynamics of the international coffee market and instrumental in price formation

Abstract

This study's main general objective of studying the behavior of coffee beans on the international market. Empirical analysis uses econometric tool as a model of simultaneous equations using least squares in a three-stage annual data base extending over the period 1964 / 65-2014 / 15. The results suggest that the factors that affect the production of coffee beans are the actual prices and the planted area. However, demand is affected by the growth of the world economy. The price simulations for the period 2014/15 - 2020/21 indicate that a yearly growth (GDP) of 2.1% there is a tendency of small high price to 3.6% moderate rise in the price of coffee until 2018/19 and a stronger growth trend of prices from 2019/20 and a growth of 4.7% a high coffee prices trend in grain on the international market. Thus the tendency of the projections 3 and the key market factors continue to favor the maintenance of current high coffee prices. For the full period 1964/65 to 2014/15 there is a moderate relationship between coffee prices and the stock. It follows that the results obtained with the scenarios developed in this work can be useful to rethink measures to recover income from coffee producing countries

Keywords

• Supply
• Demand
• Coffee
• Prices
• Forecast