Colombian coffee producers widespread defaulting

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TomC
Team HB

#1: Post by TomC »

Reuters reports today on the coffee problems in Colombia. A lot of producers are defaulting on their contracts. Prices are currently high due to Brazil's decreased supply.

https://www.reuters.com/world/americas/ ... 021-10-11/

Auctor
Supporter ❤

#2: Post by Auctor »

Back in 2003, Warren Buffett called derivatives "weapons of mass destruction". https://www.theglobeandmail.com/report- ... le1011201/ This prescient quote from his annual report was widely touted during the financial crisis. Sadly, the world has not really moved away from them because they're too lucrative for the winners, brokers love them, and they do play a role in the necessary hedging of certain risk.

Fast forward to your article and the looming coffee crisis in Colombia, and we discover:

Selling coffee forward in Colombia has become popular in the last few years, but up until this year, the move had mostly worked out in favour of farmers as world prices drifted lower so farmers received better prices for their coffee on delivery, not worse.

Same story (different direction) as 2008, when we learned that housing prices never fall nationally... until they do. :P