In recent weeks, there has been a lot of coverage of various commodities, such as oil, and the role they play in the global economy. Two other commodities that are influencing the global economy are lithium and coffee.
Lithium is the material that is used to make lithium- ion batteries, needed to run everything from electric vehicles to iPads. Lithium is present in the Earth’s crust in abundant amounts, but it is difficult to access. Most of the deposits are in locations that present logical and technical challenges due to the remote locations. Unlike other commodities, there aren’t any spot markets and lithium isn’t traded on any exchange; lithium prices are negotiated individually through contracts between buyers and sellers. Australia has some of the largest reserves globally, and Chile and Argentina also have lithium resource sites. Executives in the industry believe that the balance is likely to remain tight for 3-5 years as miners attempt to meet the current demand; however, there may be an oversupply after current supply demands are met.
The arabica bean is believed to have originated from the Kaffa region in Ethiopia, and it plays an important role in Ethiopia’s social and cultural life; economically, coffee is a critical export for the country. Coffee is Ethiopia’s top export and contributes to nearly a third of its foreign exchange money. The Ethiopian government wants to use the revenue to further develop its infrastructure, by capitalizing on global demand for its production of high-end Arabica beans. Coffee exporting countries are facing increasing competition due to currency devaluations, and Arabica producers have pushed farmers to export their crops in increased amounts.