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Ms Lee: Hi
Mr Chan: Do state your name before adding any comments

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Please write out the names of the members in the group.
1.Iskandar
2.Anders
3.Isthifah
4.Khung Sen
5.Ken jun

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shouldnt the body part be used for map

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Dear Students,

Welcome to Home-Based Learning 2016!

By now, you should have the list of the team members in your group. Each team will analyse 2 articles below to identify 3 evidence/information (2 Demand + 1 Supply or 2 Supply + 1 Demand factors)  to answer the following essay question:

a) With reference to the 2 news articles, explain the fall in prices of coffee beans in Brazil.

To discuss the answers with your group members, double click anywhere on the wall and a virtual "sticky note" will appear at the top. From, enter your name, then you can use the "sticky note" to "chat" with each other.

For example, Miss Lee: I don't think that is a non-price factor that affects demand. Please remember to write your name before the statement :)

Lastly, please identify these non-price determinants of demand & supply by quoting the relevant phrases from the article.

For example, as stated in article 1, "the recession in Europe has hit demand". After quoting the evidence for the article please proceed to explain how this non-price factor affects demand or supply with economic rigour.

I have provided some scaffolding statements to guide you in your essay development. Address each statement by writing the essay segment in the respective sticky note. Press the pencil button to write the respective essay segment.

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Topic: Demand, Supply & Market Equilibrium

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Topic: Demand, Supply & Market Equilibrium

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Objective - Students will be able to identify and explain how the demand and supply factors affect the market for coffee beans.

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With reference to the 2 news articles,  explain the fall in prices of coffee beans in Brazil.

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With reference to the 2 news articles,  explain the fall in prices of coffee beans in Brazil.

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COFFEE has many devoted drinkers. Its appealling aroma and caffeinated kick mean that 83% of all American adults drink it, 63% of them on a daily basis, according to a survey from the National Coffee Association. Yet despite the strong demand for coffee, some suppliers are unhappy. In Brazil, which produces a third of the world's coffee beans, farmers are striking over falling prices and burning sacks of coffee in protest. Why are coffee-growers feeling the strain?

There are two main varieties of coffee bean: arabica and robusta. The former, which accounts for around 60% of the world's crop, is considered superior and fetches higher prices; the latter is a hardier crop, resistant to leaf rust, but has a more bitter taste. Most of the beans produced in Brazil are of the arabica variety. But these beans now fetch around $106 a 60kg bag, less than half of what farmers could get for them a couple of years ago. Farmers in Colombia and Ethiopia, who also produce arabica beans, are suffering too. The reason is that production of coffee, and of cheaper robusta beans in particular, is booming. Vietnam has gone from growing almost nothing a decade ago to producing 25m bags of robusta beans a year today. The result is an oversupply of coffee.
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This hurts producers of arabica in particular, for several reasons. First, consumption in the developed world-American, European and Japanese drinkers consume more than half the world's coffee-is flat, and the recession has squeezed the profits of big food companies such as Nestlé and Kraft. They have taken to blending cheaper robusta beans into their products to maintain their margins, causing the price of robusta to fall more slowly than that of arabica. In the developing countries such as China, Indonesia and Brazil, meanwhile, where the emerging middle classes are discovering the joys of coffee and the market is growing by around 5% a year, robusta is the bean of choice. To make matters worse for arabica growers, falling prices have been accompanied by rising costs: coffee is still largely picked by hand, and wages are rising fast in Brazil and Colombia. Many Brazilian and Colombian farmers invested to boost production of arabica in response to the high prices of 2011, which has added to the oversupply and further depressed prices. And good weather in Brazil means that this year's crop has turned out to be unexpectedly large. That is why Brazil's farmers are striking, and are demanding more protection, in the form of fatter subsidies, from the state.

Farmers who grow arabica beans tend to be specialists, and do not plant other sorts of crops (which is the usual way for farmers to insulate themselves from volatile prices for a particular crop). Prices for sugar cane, a potential alternative, are also low. Aficionados' demand for the fanciest coffees, which fetch higher prices, is healthy, but for farmers to move upmarket takes time and expertise. Indeed, discerning coffee drinkers are also feeling the pinch, because the Central American countries where the finest coffee is grown, including Guatemala, Nicaragua and El Salvador, have been hit by leaf rust, which could wipe out 30% of this year's crop. So even while arabica beans fetch low prices on commodity markets, the price of the fanciest beans is going up. A storm in a teacup it ain't.

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COFFEE has many devoted drinkers. Its appealling aroma and caffeinated kick mean that 83% of all American adults drink it, 63% of them on a daily basis, according to a survey from the National Coffee Association. Yet despite the strong demand for coffee, some suppliers are unhappy.

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Explain market mechanism:
The market for coffee beans is determined by the forces of demand and supply
Define demand:
The amount of goods a consumer is able and willing to purchase at a given period of time and at various prices
Define supply:
The amount of goods a producer is able and willing to produce at a given period of time and at various prices

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The initial equilibrium is where the demand and the supply curve intersect each other, where quantity supplied is equal to the quantity demanded.

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Body: Decide the direction and magnitude in which the curves shif

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Body: Decide the direction and magnitude in which the curves shif

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Supply shift to the left more than the demand shift to the left. since there is poor weather, supply and production of coffee beans would be reduced. demand for coffee beans is price elastic for middle class as it a normal good. the increase in price of coffee beans led to a more than proportionate decreasw in quantity demanded for coffee beans.

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Body: Identify and explain whether the factor/event shifts the demand or supply curve. (2 Demand + 1 Supply or 2 Supply + 1 Demand)

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Body: Identify and explain whether the factor/event shifts the demand or supply curve. (2 Demand + 1 Supply or 2 Supply + 1 Demand)

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Supply factor: Destruction of crops , cost of production increases, profit for selling the coffee beans decreases. Supply of coffee bean decreases, causing the supply curve to shift to the left, ceteris paribus.
Demand factor:  Rising markets in Asia and Europe , more consumers buying coffee beans , demand for coffee beans increase, causing demand curve to shift to the right , ceteris paribus.

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The  supply curve shifts leftwards and the demand curve shifts leftwards as more people would want to purchase coffee .There would be an downward pressure on price to curb the surplusand reduce the quantity demanded for coffee beans. The quantity supplied will increase while the quantity demanded decreases until surplus has been completely eliminated.

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The price of the coffee bean would increase from p1 to p2. The quantity of coffee beans would decrease from q1 to q2. A new market equilibrium , e2 , is formed.

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The shift of the demand curve and the supply curve will reinforce each other to result in a fall in price.