Why cheap coffee means more migrants at the border
Comment of the Day

May 08 2019

Commentary by Eoin Treacy

Why cheap coffee means more migrants at the border

This article by Paul Hicks and Dan McQuillan for the Houston Chronicle may be of interest to subscribers. Here is a section:

In recent years, their challenges have increased. Climate change stretches the dry season, or makes rainfall erratic. Last year some farms went up to 45 days without rain. The farmers watched their maize and bean plants wilt and die. Then they reaped only more debt from their meager coffee harvest.

Eoin Treacy's view

In normal circumstances when the price of a commodity drops below economic production levels supply dwindles. That eventually contributes to recovery.

Unfortunately for poor Central American farmers the largest producer, Brazil, has been benefitting from the weakness of the Real and a large overhang of supply is still pressuring the market.

The Real retested the BRL4 level this week but steadied today amid stronger economic figures. A sustained move above that level is going to be require to signal a return to Dollar dominance.

The iBovespa Index remains in a consistent medium-term uptrend and bounced impressively from the lower side of its most recent range today.

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