< meta name="DC.Date.Valid.End" content="20050825"> Amendment Nine: Long on Coffee

Tuesday, May 17, 2005

Long on Coffee

Lots of folks have been commenting on the bean market. Yesterday someone told me they thought it was all smoke caused by people who got in during the late 90s. Could be, but the fundamentals alone are worth the risk in my opinion. 60% to 70% below their peak, coffee is certainly in position for a run-up. Combine that with the fact that coffee producers have been exiting in droves over the last three decades and a coffee tree takes 3-5 years to produce beans... you've got a good bull market brewing. I also personally think that coffee will explode in China over the next 3-5 years, just before new trees start producing. Starbucks already has about 200 stores there, and as economies boom, coffee 's consumed (thats my line, but you can use it for free). And remember, annual global demand already outstrips production by about 10 million bags, and inventories are at their lowest point in nearly two decades. Throw in a few extra million caffeine guzzling Chinese and you've got a coffee investor's paradise. I'm going to put a pot on, and brew a little profit.