If we look at commodity trading from a purely conceptual perspective, we find that the real reason for the first exchange of goods is to stabilize prices so that American farmers can better understand the sales of agricultural products once they are harvested. It also helps manufacturers who need raw materials know how much they can charge for the final product by understanding the cost.
If we look at the Colombian coffee market, we will find something interesting. Starbucks acquired half of the plantations there. Although Starbucks was buying coffee before, these planters have made a lot of money, and now Starbucks owns these plants, so they operate differently. Rather than buying coffee from other plantations, coffee prices have fallen nationwide, leading to terrible sights. However, if those planters sell their property to Starbucks and never sell them, they will still make a lot of money from Starbucks.
Starbucks' job is to return shareholder value to its owners, which means working very efficiently, which means that wholesale coffee growers suffer as little as possible. It can do this by buying plants and doing the work themselves. Of course, Colombia has a different culture and large coffee plantations also take care of workers. This is not the way modern American companies operate. Planters are very frustrated, and those who are still owners are not sold out because of the high prices previously sold to Starbucks because there is no place to sell their coffee. However, one must also consider that coffee plantations only achieved average profits before Starbucks. When Starbucks appeared, their profits temporarily rose until five years later, Starbucks purchased their own plantations, not just in Colombia, the world. One day, coffee means that it will be the commodity of today, because Starbucks will have more than 50% of all coffee plantations.
Coffee plantations have not produced much of their harvest many years ago. Starbucks controls this product by owning 23% of the goods. Whenever they don't use it, they are sold at a higher price than the original coffee plantation. Some people may complain about this strategy, but if they mainly use coffee as a retail level and sell the rest, then they are free to do so. The only real problem is the poor chaos throughout the supply chain, in which case it has heard people, the industrious people of Colombia. Think about the macro and microeconomics of coffee products when you sip Starbucks coffee next time.
Orignal From: Coffee goods and Starbucks
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