1/3/2020 0 Comments
Supply Determinants of Coffee - Coursework Example This research will begin with the statement that agricultural phase involves the cultivation of green coffee employing different methods and treatment such as soil management, use of fertilizers, treatment of pests and harvesting that are influenced by the cultivation practices, a topology of the plantation, and method of harvesting. Upon harvesting two methods can be used to process it namely dry method â€“is an old, simple and natural method that is mostly is used in processing all Robusta coffee. The other being wet method-here specific equipment and water is used. The Arabica type is mostly processed by this method and it normally produces the better quality that commands high prices in the market. Production phase; involves processing and packaging. The processing in this stage involves storing; cleaning and weighting; roasting; blending; grinding. The powder produced after processing is normally subjected to different processes so as to develop the varieties such as the instant coffee manufacturer. In the packaging, the stage includes many different types of primary and secondary packaging for roast coffee depending on the choices of the company. Input prices that are inversely proportionate the supply of coffee .i.e. when the prices of raw materials goes up the supply of coffee would reduce; productivity in terms of production cost is directly proportionate the supply .i.e. if involvement of a technology makes production cheap then the supply of the product will definitely shoot; price of substitute is directly proportional to the supply of the product hence if the price is low then the supply of the product with definitely be down; expected future price of the product if expected to accelerate in the future the supply of that product will go down in the present since the producers would be hoarding them for the future. Demand is the number of goods a consumer is able to purchase at a given price. The determinants include The disposable income of the consumer is directly proportionate to the demand for a product in that should it increase the consumer will demand more; consumer preference is directly proportionately to demand i.e. consumers will tend to demand what they prefer; price of related goods if increases the demand of the substitute will also shoot; expectation of future prices if is to raise the demand of the goods at the present will increase in fear of the price rise.