Whoa! A full slate of heavy hitters made mincemeat of the 11am-12:45pm block at the SCAA Symposium 2011. The crowd was kept on pins and needles by distinguished gentlemen from Brazil, Guatemala, and elsewhere. Let’s summarize, shall we?
Oscar Schaps, Global Head of Soft Commodities at INTL FCStone LLC
“Be careful what you wish for”, warns Oscar Schaps to the room full of specialty coffee executives, “because you push the world to drink great coffee”. The crowd nervously laughs. Arabica trend profiles are going buck wild, stocks (“even stocks we can’t see!”) are on the up and up, and we should all be careful with our investments and “spend time listening to the talking heads”.
Mr. Schaps delivered a speech that amounts to a primer on futures contracts, options contracts, “calls” and “puts”, and non-structured hedging.
“These markets are alive. they move when they decide to move, and they move fast….so build a program, and get help building a program. There’s probably someone sitting next to you who can help.”
The gentleman sitting next to us is drinking a Venti latte from Starbucks.
Carlos Brando, Partner at P&A International Marketing
“My friends, arabica prices have to go up to account for improving currencies in the producing countries” – this is what Mr. Brando refers to as “the currency war”, an ongoing fluctuation in which the dollar gradually weakens while the Brazillian, Indonesian, and Colombian currency ratings grow exponentially. It’s a fascinating sub-set of the coffee market discussion, and something that probably hasn’t gotten enough play during our coffee market discussions in the West. While arabica prices go up in the markets, Mr. Brando suggests this can be a remarkable opportunity for producing countries, especially Brazil, for “a new coffee revolution…a revolution of technology against poverty”.
Juan Luis Barrios, Finca La Merced and ANACAFE
Plantation aging, guacamole, price and labor costs, and the paying down the debts of 2001-2002…
Nick Cho (Portafilter Podcast) pulled a scary fact from Barrio’s speech about rising security issues producers are facing: “1-3% of Guatemalan coffee is lost in stolen cherry. For small famers, 5-10%. Therefore, security represents 6% of production costs.”
Ric Rhinehart, Executive Director of the SCAA
We make no bones about it: we’re huge Ric Rhinehart fans. The man is an easy-going, natural and engaging public speaker, and his presentation on the impact of market realities has been a highlight of the day so far. Ric talked at length about what he calls “Three Value Issues” – the idea that, first coffee must be valuable for all involved in the production cycle; second, coffee must be a reasonable investment for the big money financiers who make investment possible; and last, coffee must be a valuable consumer experience at all levels.
Makes sense, no? It’s nice to hear someone lay it all out like that. Ric went on to call specifically for future investment in science, which he sees as the best way to strengthen the supply chain:
“We in the industry have traditionally been poor investors in our future. That’s gotta end.”
Now there’s a panel discussion! Our blood sugar is running low. We’ll see you at the lunch buffet soup station.
