In starting off with another coffee market update, it strikes me that a telling snapshot of our times is the need to give market updates at a much higher frequency than was thought necessary in the past.
Volatility seems quite high these days, but ironically, when one looks at a chart of the coffee market over the past 40 years, it's really not that different from what it has been over eight-year stretches on four different time-spans. If history is any guide then, baring unforeseeable events -- whether natural (droughts, frosts, etc.), or human-made (strikes, economics, among others) -- we might be in for at least a little bit of calm in coffee futures, either trending up or down with whatever possibilities of future direction are the sentiment du jour.
With information so readily at our fingertips today, the intervals between swings in sentiment seem to have contracted to mere days (if not hours) as new information comes into play. What we know changes with the next headline.
It can be hard to filter out the noise, but at least charts can give us a chance to weigh that noise against our knowledge of how markets trend over longer periods.
My only difficulty with charts is that, when everyone is following them, their projections can become self-fulfilling. Once one analyst says the market will go to X, based on technical analysis, others react by buying or selling that market. This makes the market move towards the prediction, which steamrolls more analysts to cover the move and thus reinforce the direction. When this appears to have happened, the question always is: would the market have behaved in that manner without that technical forecast?
Can any one technical analyst be correct every time, without uncertainty? One who was infallible would be the wealthiest human alive. It is a good thing we all don't listen to just one analyst, or we would race each other to the trading desk to get our orders in and so giving that person an ever-growing percentage of accuracy.
Can you imagine what would happen to the stock market if there were one "talking head" who was always right? Volatility would be a function of this sage's every word, to the point of making the market obsolete. Markets need uncertainty; they need two parties to disagree on direction in order for there to be liquidity beyond that created by physical buyers and sellers, so that we in the industry can easily book prices for future transactions today.
This is what made the financial crisis of 2008 so scary. When liquidity dries up, markets freeze up, and without a financial "invisible hand" there is the prospect of an economic calamity of unthinkable magnitude.
But I digress. My opinion is that we will see less volatility near-term until an event of some magnitude dictates otherwise.
The National Automatic Merchandising Association's OneShow is heading to Las Vegas. The Specialty Coffee Association of America's exposition is headed to Seattle. Sadly, the two are running concurrently again (NAMA's OneShow from April 18 to 21, SCAA's Global Specialty Coffee Expo from April 20 through 23). It's unfortunate that, with 52 weeks in any given year, the two most vital trade shows for coffee people are running at the exact same time. (I made the same point last year.)
At least they are in the same time zone, and there is some overlap allowing those with the need, and the wherewithal, to plan a trip starting with the opening of NAMA and continuing to the end of SCAA. I've done it before, and will likely do it again this year, but it is quite the undertaking and one that ought to be considered in future planning. There may well be industry members who decide that SCAA is a more important destination to their businesses, if they can only handle one trade show per period away from the office or need to stay within budgetary constraints.
Changing one's thinking cap from industry segment to industry segment in the time it takes to hop aboard a 11⁄2-hour flight while allowing for enough time to lament losses suffered in an ill-advised foray to the craps table is not easily achieved either. At least not to the extent necessary to be as efficient and fresh as one would like to be in attending shows.
It is easy to complain, and I'm sure there are reasons for why this can happen from time to time. But on the off chance that I should forget to bring it up while in the company of the fine folks who attend to these details, I thought I'd mention it here in hopes calendars can be crosschecked for the benefit of both memberships and the trade associations themselves.
If I've just opened up a political "can of worms," my apologies.
I hope to see you out West at one of these shows, and if you don't know me, please stop me and say hello. I promise I will be happy for the chance to meet you, as trade shows are one of the few chances we get to mingle with our peers and I've rarely met anyone who didn't add some value to my day.
May your cup run full, and the brew, exquisite.
KEVIN DAW is president of Heritage Coffee Co. (London, ON, Canada), a private-label roaster serving the breaktime management industries. A 30-year veteran of OCS, water delivery and vending operations, he has concentrated on coffee roasting for the past two decades.