Exotics Coffee

The agricultural market can be quite volatile because the crops most traded are subject to so many variables that affect their production.

The four most valued and traded agricultural products in the exotic commodities market include

Coffee

The second-most sought after commodity after crude oil, coffee is a popular though volatile investment. Its global production is subject to powerful variables like weather conditions and geopolitical conflict.

Political Tensions

With the top five countries of coffee producers including Brazil and Vietnam having a history of political conflicts, the potential for turmoil and volatility is drastic.

Climate Conditions

Being sensitive to severe weather conditions around the world makes coffee crops susceptible to rainfall and drought conditions that can limit supply.

Sugar

Sugar has long been one of the world’s most valuable exotics. Not only is sugar a major food ingredient, it is used by industry to create ethanol fuel.

Global Production

Being sensitive to severe weather conditions around the world makes coffee crops susceptible to rainfall and drought conditions that can limit supply.

Health Issues

Sugar’s link to diabetes, obesity and other diseases has caused governments to consider restrictions and taxes on sugar-related items.

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Soy

Soy is a major crop in both China and the U.S. Much of the volatility of this crop is due to U.S. economic influence on the crop’s production and emerging markets.

Emerging Markets

As China, India and other emerging countries increase soy imports due to population growth, demand for the agricultural product is also expected to grow.

U.S. Influence

Being the leading exporter of soybeans in the world also makes the U.S. economy and dollar a direct influencer of soybean prices and profits in the industry.

Corn

Corn plays a critical role in the exotics market because it is widely consumed as an edible and used by industries. Like other agricultural crops, its production is subject to variables like environmental conditions and influence from large economies like China’s.

Chinese Influence

As the world’s largest consumer of energy, China’s demand for cheaper biofuels can disrupt corn prices.

Enviromental Circumstances

Corn crops are vulnerable to severe heat waves and weather patterns which limit supply and increase prices.

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