Empirical Study on Interdependence of Coffee Futures Prices and Farm Gate Prices in Major Coffee Producing Countries

Mahantesh Melawanki, Babu B. N. Pradeepa and K B Vedamurthy

Asian Journal of Agricultural Extension, Economics & Sociology, 2025, vol. 43, issue 1, 8

Abstract: Coffee is an export-oriented commodity for producing countries, and it is actively traded at international commodity exchange platforms viz., Intercontinental Exchange (ICE), New York and ICE Europe. This study examined the interrelationship between futures and farm gate coffee prices in major coffee producing countries. The study substantiates the presence of a stable long-run relationship between ICE coffee futures prices and farm gate prices (spot prices) in top coffee producing countries, inferring that both futures and spot prices react to the same set of market information. While, there is an indication of equilibrium between ICE Coffee futures (New York) and Arabica producer prices (at farm gate level) & ICE Coffee futures (Europe) and Robusta producer prices (at farm gate level). According to the study results, farm gate prices in Honduras, India and Uganda were dependent on ICE Futures prices, while Arabica farm gate prices in Brazil have substantial influence on the ICE New York futures price. The study results reveals that, Brazil with the lion share in global arabica coffee production, is the price maker in the international market. While, India and Uganda with the low share in global coffee production are basically ‘price takers’ rather than ‘price makers’ in the international market.

Keywords: Demand; and; Price; Analysis (search for similar items in EconPapers)
Date: 2025
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/368188/files/Pradeepa4312024AJAEES127079.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:ajaees:368188

Access Statistics for this article

More articles in Asian Journal of Agricultural Extension, Economics & Sociology from Asian Journal of Agricultural Extension, Economics & Sociology
Bibliographic data for series maintained by AgEcon Search ().