What is “The Market” Anyway?

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by Ric Rhinehart, Executive Director, SCAA

Any time coffee folks are gathered, conversation will inevitably include a reference to “the market.” “Did you get the market today?” or “Where did the market close?” and similar conversation-starters are a mainstay in coffee circles everywhere. There are specialty players who take a particular pride in denying their involvement with “the market,” noting regularly that the coffees they buy do not trade there. Given the ongoing volatility in the market, and the real impacts this has in the lives and businesses of coffee producers, intermediaries, and roasters, it is worth taking a moment to examine this thing we spend so much time talking about. In the case of coffee, this is most often the New York “C” contract, operated by Intercontinental Exchange (ICE).

Commodity exchanges and futures markets originally developed to fill a variety of functions. In 2010, I wrote the below in a position paper on plans to allow semi-washed and washed Brazil coffees to be tendered to the market:

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