C-Market Price

Nomad - C-Market Price

As of January 9, 2022 the price of coffee on the stock exchange rose to 2.38 $/lb, one year earlier the price was 1 $/lb. How could the price of coffee have increased by more than 150% in only one year?

One of the reasons behind the increase in the market price has been the July frosts in Brazil, where more than 9500 coffee producers suffered losses of between 4 and 11 million bags of coffee, between 8.2% and 22.4% of production (Perfect Daily Grind, 07/30/21).

Coffee has a very volatile market price, and this is not the first time that it has suffered increases of this type. In the more than 30 years that the price of coffee has been measured in the stock market, this has happened several times.

In 1997, speculation on world production predicting frosts, which in the end did not occur, caused coffee to reach $2.73/lb. In 2001, however, coffee fell sharply to $0.46/lb. This drop was associated with the "rapid expansion of new coffee crops in Vietnam and Brazil, coupled with a glut of good quality crops, causing a coffee surplus." (Perfect Daily Grind, 10/10/18).

The C-Market price of coffee is a continuous loop of ups and downs, with high prices being short-lived and low prices lasting over time. This continuous speculation is devastating for coffee producers, creating brutal instability, preventing investment in improvements in their crops and processes and in their quality of life.

At NOMAD we do not buy coffee based on the market price, we buy and pay for coffee according to its quality. Thanks to this philosophy, the rise of the last year has affected us minimally, being these prices more stable year after year. For example, in 2021 the price of our session espresso (Chambakú Washed from Colombia), one of the best coffees in the quality-price ratio, was $2.45/lb. In 2022 the price increases slightly to $2.70/lb. Unlike the c-market price, this increase in our purchase price will be maintained year after year.

We hope that this comparison and examples will be useful for you to understand the great difference between commercial coffee, which is governed by speculation, and specialty coffee, which is governed by quality. There are many people who live thanks exclusively to coffee and we have a moral obligation not to speculate with the fruit of their labor.