The price that Zambian farmers receive for their coffee therefore depends on the level of demand and supply in the world. Though the level of demand for coffee itself may not fluctuate a great deal, the demand for it in the commodity markets will be affected by many factors. These may include the expectations of dealers about the coffee harvest, expectations of the level of world demand, external factors like their expectations of world economic growth and so on. Because demand is so affected by price expectations there may be significant fluctuations in demand. An increase in demand for example will increase the price of coffee on world markets, as shown in the diagram below.
Zambian farmers are powerless to influence the price and are simply price-takers.
They have no choice but to accept the price on offer. This will mean that their livelihoods are very dependent on the behaviour of demand and supply in worlds markets, which in turn may depend on the expectations of dealers in world commodity markets.