Description
This is a presentation describes value chain and segmentation of coffee, factors affecting demand of coffee, contract specifications of coffee.
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Preliminary Analysis Value Chain & Segmentation Current Scenario Other Exchanges Factors Affecting Demand Contract Specifications Players Limitations of the Study
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Arabica & Robusta Arabica more expensive owing to richer flavor. Karnataka, Kerala & Tamil Nadu Current production exceeds 260 mn kg 67% Exported but forms only 3.4% of global coffee production. High segmentation has made this sector immune to strikes
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VALUE CHAIN
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Planters Planters cum Traders Non-Integrated players
Filter coffee 45% Instant coffee 55%
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SEGMENTATION
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Limited corporate presence in plantation End Product market dominated by corporates Regional concentration of plantation Consumption predominantly in South Manpower intensive Highly fragmented
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Small holdings (Up to 10 Hectares) 70% Large Holdings (> 10 Hectares) 30%
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Region-wise Coffee consumption is as below:
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North : 7% East : 5% West : 8% South : 80%
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Coffee procurement is generally undertaken through agents, who interact with the planters and arrange for the supply of raw coffee seeds. Threats
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Risk of production concentrated in Karnataka. Prospects linked to speculation and volatile prices in the international market
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New York Exchange deals in Arabica (cent/lbs) London exchange deals in Robusta (USD/Tonne) Only during some months:
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New York–March, May, July, September, December. London–January, March, May, July, September, November.
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Forward Trading-Basis Sale
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Affordability, Consumer preference (also influenced by region-specific traditions and climatic conditions), Demographics. In addition, prices of substitutes such as tea also affect consumption of coffee
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The coffee tree bears its first crop 3-4 years after planting and has a useful life of 40 years. The topographical conditions influence the yield level. Coffee is a tropical plant, which grows between the latitudes of 25° N. and 25° S., but requiring very specific environmental conditions for commercial cultivation. Temperature, rainfall, sunlight, wind and soils are all important, but requirements vary according to the varieties grown. Arabica requires an average temperature of 15-24 °C whereas Robusta grows best at 24-30 °C. Robusta can take hotter, drier conditions but does not tolerate temperatures much below 15°C. Arabica production is of a biennial nature with production declining every alternate year. Arabica crop is more prone to crop failures. Preference for instant coffee as against filter coffee. Instant coffee requires Robusta beans. Domestic grower’s prices move in line with international prices but are biennial.
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Coffee (KT) seeds can be classified on the basis of:
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Size of the seed Color of the seed Moisture content
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Unit of trading could be ‘kgs’ or ‘tonne’. Tick Size ( $0.0005 per pound) Settlement type (Financial) Price Band Delivery Centers
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?
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Nestle - Nescafe HUL – BRU TATA Coffee – Largest producer in India CCL
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?
?
?
Liquidity Measurement Market Dynamics Data for the players who would participate in the analyzed commodity Actually trading quantity & tick sizes would be arrived at, by observing the actual trading.
?
?
? ?
www.cmegroup.com www.economictimes.com www.moneycontrol.com www.wikipedia.org
doc_850605572.pptx
This is a presentation describes value chain and segmentation of coffee, factors affecting demand of coffee, contract specifications of coffee.
?
?
? ? ? ? ? ?
Preliminary Analysis Value Chain & Segmentation Current Scenario Other Exchanges Factors Affecting Demand Contract Specifications Players Limitations of the Study
?
?
? ? ?
?
Arabica & Robusta Arabica more expensive owing to richer flavor. Karnataka, Kerala & Tamil Nadu Current production exceeds 260 mn kg 67% Exported but forms only 3.4% of global coffee production. High segmentation has made this sector immune to strikes
?
VALUE CHAIN
?
? ?
Planters Planters cum Traders Non-Integrated players
Filter coffee 45% Instant coffee 55%
?
SEGMENTATION
? ?
?
?
? ? ? ?
Limited corporate presence in plantation End Product market dominated by corporates Regional concentration of plantation Consumption predominantly in South Manpower intensive Highly fragmented
? ?
Small holdings (Up to 10 Hectares) 70% Large Holdings (> 10 Hectares) 30%
?
Region-wise Coffee consumption is as below:
? ? ? ?
North : 7% East : 5% West : 8% South : 80%
?
?
Coffee procurement is generally undertaken through agents, who interact with the planters and arrange for the supply of raw coffee seeds. Threats
? ?
Risk of production concentrated in Karnataka. Prospects linked to speculation and volatile prices in the international market
?
?
?
New York Exchange deals in Arabica (cent/lbs) London exchange deals in Robusta (USD/Tonne) Only during some months:
?
?
New York–March, May, July, September, December. London–January, March, May, July, September, November.
?
Forward Trading-Basis Sale
?
?
?
?
Affordability, Consumer preference (also influenced by region-specific traditions and climatic conditions), Demographics. In addition, prices of substitutes such as tea also affect consumption of coffee
?
?
?
?
?
?
?
? ?
?
The coffee tree bears its first crop 3-4 years after planting and has a useful life of 40 years. The topographical conditions influence the yield level. Coffee is a tropical plant, which grows between the latitudes of 25° N. and 25° S., but requiring very specific environmental conditions for commercial cultivation. Temperature, rainfall, sunlight, wind and soils are all important, but requirements vary according to the varieties grown. Arabica requires an average temperature of 15-24 °C whereas Robusta grows best at 24-30 °C. Robusta can take hotter, drier conditions but does not tolerate temperatures much below 15°C. Arabica production is of a biennial nature with production declining every alternate year. Arabica crop is more prone to crop failures. Preference for instant coffee as against filter coffee. Instant coffee requires Robusta beans. Domestic grower’s prices move in line with international prices but are biennial.
?
Coffee (KT) seeds can be classified on the basis of:
? ? ?
Size of the seed Color of the seed Moisture content
? ? ?
?
?
Unit of trading could be ‘kgs’ or ‘tonne’. Tick Size ( $0.0005 per pound) Settlement type (Financial) Price Band Delivery Centers
?
?
? ?
Nestle - Nescafe HUL – BRU TATA Coffee – Largest producer in India CCL
?
?
?
?
Liquidity Measurement Market Dynamics Data for the players who would participate in the analyzed commodity Actually trading quantity & tick sizes would be arrived at, by observing the actual trading.
?
?
? ?
www.cmegroup.com www.economictimes.com www.moneycontrol.com www.wikipedia.org
doc_850605572.pptx