Coffee beans are marketed in Futures and CFD's Coffee is one of the most interesting products to trade. It is also usually one of the most volatile. Coffee is a member of the soft complex and most of these products are prone to sudden price changes.
There are two main types of coffee: Robusta and Arabica. The coffee that is marketed in the ICE Futures contract in the USA. It's Arabica. It is considered that Robusta coffee beans are bitterer and also contain more caffeine.
Coffee is the second most commonly traded product in the world, only as a source of foreign currency for developing countries, according to the International Coffee Organization. Although the production and consumption of many basic products tend to go up and down depending on the price, changes in the supply and demand of coffee as a commodity are not as prone to price changes as people keep looking for their cup of coffee.
MARKET AND PRICE OF COFFEE:
- Futures and coffee options are traded in New York on the Intercontinental Exchange (ICE, formerly the New York Board of Trade) through CFDs.
- The size of the coffee futures contract "KC" is 37,500 pounds.
- Coffee commodity Trading Forex is now done electronically.
- The coffee futures prices are quoted in cents per pound, and the minimum price fluctuation is 5/100 cents / pound, equivalent to $ 18.75 per contract.
- A change of 1 cent in the price equals $ 375.
- The months of the coffee futures contract are March, May, July, September and December.
SUPPLY AND DEMAND OF COFFEE:
A coffee tree can provide enough coffee beans to fill a can of ground coffee for one pound during each growing season. Coffee beans are the seeds of the berries the size of a cherry, the fruit of the coffee tree. It takes 3 to 5 years after planting a tree before it can produce marketable coffee beans.
The main coffee producers in the world are Brazil, Vietnam, Colombia and Indonesia. Brazil and Colombia produce mainly Arabica coffee and together they account for more than 40 percent of the world coffee production. Vietnam produces Robusta coffee, generally considered to be a coffee of lower quality than the Arabica coffee bean.
The United States is the world's largest importer of Kraft, Nestlé, Procter and Gamble and Sara Lee are the main roaster companies and represent purchases of approximately 50% of all annual coffee production.
HISTORY OF COFFEE TRADE:
The International Coffee Organization produces statistics on the production and international shipments of coffee and promotes coffee trade among nations. Based in London, the ICO consists of 55 coffee producing and consuming member countries and makes available a large amount of data and other information for coffee futures traders.
The Foreign Agricultural Service of the United States Department of Agriculture also offers a large amount of information and statistics about coffee, including production data by country and for the world, import and export data, etc. The various exchanges that trade with coffee futures also have a lot of information.