"Wildly outscale cost multiplier" is what you get in a commodity market when demand is inelastic. Why? Because buyers are willing to pay whatever it takes to get the supplies they need.
The 50% tariff wasn't expected to be 'short' when introduced. The futures market priced it in for a longer time, guaranteeing the price would stay high for years. This trend continued even after the tariff was reduced because you never know what Trump's going to do. The increased uncertainty alone causes the price to go up because the risk is higher. Combine that with other cost increases and you have 'structural' inflation.
Ok, this doesn't have anything to do with the topic at hand, but it's an interesting economic question anyway. Why would investors making a bad bet on futures keep the price high? That would mean they just lost money when the end of the contract ran out, but that doesn't actually affect the bean price. Betting on futures is a stock market gamble. if anything, the infusion of extra money to the struggling coffee suppliers (whose value at contract end was lower than the futures gamble) should ease their burden?
If, as you assert, making a bad bet on futures actually raises the market price of the commodity (in this case, coffee), no one would ever lose money on futures, and no company would ever go broke.
Err...
Turns out that yes, Vietnam
did '
have bit of weather'. It doesn't supply 75% of the world's coffee beans of course, but does supply 40% of the world's Robusta. If people can't get one type they may switch to another, putting pressure on
that supply.
And did they? Were the shelves as barren as this would imply? I have not heard a peep of this. And that's what I am talking about (not the coffee market): being told absurdities to justify price spiking, when those absurdities are neither seen nor jibe with prices as we see them.
Dirtywick posted recently that the coffee growers conglomerate dudes say that the end user is paying 50% more in the window we are discussing. I'm seeing 2-3x more. Are you not seeing this? Don't just repeat hypothetical and canned answers: are you
actually paying what they assert you are paying?
The whole market is interconnected, so when the price goes up in one place it will do the same in other places.
It can. It can also just raise prices under the "what people will pay" theory. "There's a storm affecting crops over there somewhere, so that justifies me spiking the price.
Market value, you see." I think of that as gouging. Its like if a carpenter or plumber triples their rates after a storm in their area. People may be 'willing' to pay it out of sheer desperation, but that does not make it less gougy, or ethical.
You say "that had nothing to do with me, but imma jack my prices up now" when in reality the supplier could just be making up for a loss they suffered previously. This is common in farming, where an entire crop could be wiped out by bad weather and the farmer will want to make up for it the next year - which means they need a bumper crop and/or a huge price increase just to break even.
Like our carpenter or plumber. "Yeah, I didn't work last couple years, so now imma charge triple".
But that's just being cynical on my part. Yes, the farmer needs to keep his head above water or he's out of business too. But these random hypothetical aren't addressing what we are discussing. We are at least trying to talk about the specifics of this jumping off point.
So Brasil, the biggest single Arabica coffee supplier on the planet, put out 10% less beans than the previous year, per data upthread. That would make the beans scarcer, and make the seller up his price. You further posit that other countries would cut in line to buy up the Arabica beans because they can't get Robusta. All of which, non-negotiably, would have to lead to empty shelves at the retail end. I mean, according to you, the demand far outweighs the available supply, and radically so. That would account for a hypothetically inflated price, due to the scarcity. So is it actually scarce? I'm not seeing it or hearing about it, year after year. I'm hearing a ton about how it totally is happening and justifying high prices, but at the consumer's observable end... no, the cupboards are overflowing. Where is this reported extreme scarcity shown, wild enough to triple end user costs, beyond the claims of those profiting from it?
You say 'demand is being adequately met', but people in the industry say otherwize.
Which is why I call bull ◊◊◊◊. And that ain't in a vacuum, ducky. We just went over how the "people in the industry" say the price for the end user is up 50% in the time frame, when your own ◊◊◊◊◊◊◊ posts prove that it is much much higher.
I guess you think they are all lying as they collude to jack prices up for no reason.
No reason? Are you not paying attention at all? What might a reason be to gouge prices during a time of inflation, lol?
