Responding to the coffee crisis: What can we learn from price dynamics?

Mehta, Aashish; Chavas, Jean‐Paul

doi:10.1016/j.jdeveco.2006.07.006

Cited by 50 publications

(29 citation statements)

References 24 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Although there are differing views on their impact on producer welfare, the interventions are in general regarded as unsuccessful. The cost of achieving reduced volatility seemed too high, given that the administered prices usually were far below the certainty equivalent level that would be accepted by producers (Raffaeli, 1995;Hamza and Azenaw, 1995;Bohman, Jarvis and Barichello, 1996;Gilbert, 1999;McIntire and Varangis, 1999;Krivonos, 2004;Jarvis, 2005;Boudreaux, 2007;Mehta and Chavas, 2008;Mohan, 2010;Russell, Mohan and Banerjee, 2012). Therefore, how best to manage the negative consequences of price volatility for producers is a key issue for governments and policy makers.…”

Section: Conclusion and Policy Implicationsmentioning

confidence: 99%

The Welfare Gain from Eliminating Coffee Price Volatility: The Case of Indian Coffee Producers

Mohan¹,

Gemech²,

Reeves³

et al. 2014

jda

View full text Add to dashboard Cite

It is commonly felt that the liberalisation of commodity markets has increased the exposure of commodity producers to price volatility. Using a generalized autoregressive conditional heteroskedasticity framework, we make a distinction between the predictable and unpredictable components of volatility, the latter exposing producers to price risk. By using empirical estimates of the coefficient of relative risk aversion drawn from the literature, we show that the welfare gain from eliminating this price risk for Indian coffee producers is on average 4.8 percent of their revenue from coffee sales, which for a poor producer may be more than a month's income. This underlines the need for providing producers access to suitable price-risk management or hedging mechanisms.JEL Classifications: D13, D81, Q13, Q12

show abstract

Section: Conclusion and Policy Implicationsmentioning

confidence: 99%

The Welfare Gain from Eliminating Coffee Price Volatility: The Case of Indian Coffee Producers

Mohan¹,

Gemech²,

Reeves³

et al. 2014

jda

View full text Add to dashboard Cite

show abstract

“…A long line of research seeks to understand the price dynamics of commodities in general and softs in particular-see, for example, Mehta & Chavas (2008) and Igami (2015) in the case of coffee and see Cafiero, Bobenrieth, Bobenrieth, & Wright (2015) in the case of sugar. The present paper is, to our knowledge, the first to systematically investigate factors related to market expectations of future softs price volatility.…”

Section: Related Literaturementioning

confidence: 99%

Sugar with your Coffee? Fundamentals, Financials, and Softs Price Uncertainty

Covindassamy

Robe

Wallen

2017

Journal of Futures Markets

View full text Add to dashboard Cite

We investigate empirically the main factors related to coffee and sugar (“softs”) price uncertainty. We link physical market fundamentals as well as financial variables to (i) market expectations of future price volatility and (ii) the extent to which these two commodities both co‐move with equities. The physical market fundamentals that matter include the state of inventories, weather, and disease outbreaks. Beyond these fundamental factors, our results highlight the crucial role of financial market sentiment in understanding cross market linkages and the magnitude of softs market uncertainty. © 2017 Wiley Periodicals, Inc. Jrl Fut Mark 37:744–765, 2017

show abstract

“…A long line of research seeks to understand the price dynamics of commodities in general and softs in particular -see, e.g., Mehta and Chavas (2008) and Igami (2015) in the case of coffee and see Cafiero, Bobenrieth, Bobenrieth, and Wright (2015) in the case of sugar. The present paper is, to our knowledge, the first to systematically investigate the factors related to market expectations of softs price volatility expectations.…”

Section: Related Literaturementioning

confidence: 99%

Sugar With Your Coffee?: Financials, Fundamentals, and Soft Price Uncertainty

Covindassamy¹,

Robe²,

Wallen³

2017

View full text Add to dashboard Cite

work is licensed under a Creative Commons IGO 3.0 AttributionNonCommercial-NoDerivatives (CC-IGO BY-NC-ND 3.0 IGO) license (http://creativecommons.org/licenses/by-nc-nd/3.0/igo/ legalcode) and may be reproduced with attribution to the IDB and for any non-commercial purpose, as provided below. No derivative work is allowed.Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license.Following a peer review process, and with previous written consent by the Inter-American Development Bank (IDB), a revised version of this work may also be reproduced in any academic journal, including those indexed by the American Economic Association's EconLit, provided that the IDB is credited and that the author(s) receive no income from the publication. Therefore, the restriction to receive income from such publication shall only extend to the publication's author(s). With regard to such restriction, in case of any inconsistency between the Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives license and these statements, the latter shall prevail.Note that link provided above includes additional terms and conditions of the license.The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter-American Development Bank, its Board of Directors, or the countries they represent. We thank Osmel Manzano, Guillermo Lagarda Cuevas, and Scott Irwin for helpful discussions, and brownbag seminar participants at the Inter-American Development Bank (IDB) and the U.S. Commodity Futures Trading Commission (CFTC) for helpful comments and suggestions. We are grateful to Casey Petroff for her help with the public trader position data, to Emré Robe for his help with the construction of the weather variables, and to Lutz Kilian for his help with indicators of global economic conditions. The first draft of this paper was written while Robe was a consultant to, and Covindassamy was a research assistant at, the IDB. Robe was also a consulting senior economist with the CFTC during the same period. No CFTC compensation was received, and no CFTC resources or proprietary information were used, for this project. The opinions expressed in this paper are those of the authors: they do not reflect the views of other CFTC staff, the Commission itself, or the United States government; or the IDB or the shareholder governments. Errors and omissions, if any, are the authors' sole responsibility. 1Sugar with your Coffee? Financials, Fundamentals, and Softs Price Uncertainty AbstractWe investigate empirically the factors related to price uncertainty in the markets for two key Central American commodities: coffee and sugar ("softs"). Specifically, we analyze the predictive powe...

show abstract

Responding to the coffee crisis: What can we learn from price dynamics?

Cited by 50 publications

References 24 publications

The Welfare Gain from Eliminating Coffee Price Volatility: The Case of Indian Coffee Producers

The Welfare Gain from Eliminating Coffee Price Volatility: The Case of Indian Coffee Producers

Sugar with your Coffee? Fundamentals, Financials, and Softs Price Uncertainty

Sugar With Your Coffee?: Financials, Fundamentals, and Soft Price Uncertainty

Contact Info

Product

Resources

About