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Coffee Ecomics with Karl: Where Does the C Price Come From? + Differentials

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When we last caught up with Cheap Coffee author Karl Wienhold, he was halfway through a new miniseries on coffee prices, exploring questions about how green coffee market prices are determined and how coffee exchanges work.

The most recent, and final, episodes in the miniseries dig even deeper down the coffee price rabbit hole, beginning with the questions, “Where does the C Price really come from?” and “What about the role of futures, options, speculation and hedging?”

“The C-Price is the de facto world reference price for arabica coffee, but how exactly it is formed, and why it is considered THE legitimate price, is a complex and often-misunderstood topic,” Karl recently told DCN. “It’s easy to disapprove of the numbers that it indicates, but I’ve found very little evidence and reasoning as to how and why it may not be functioning as it is meant to, if there is even a consensus on how it is meant to work.”

In the final video in the series, Karl tackles coffee price differentials.

“First of all, what do people in the coffee trade even mean when they say differentials?” Karl asks. “Unfortunately, the term means different things to different people. Understanding these values and where they come from depend on what we believe they are and what their role is.”

Find the full four-part series playlist here. Check out DCN’s past “Coffee Economics with Karl” coverage here.

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