Factors That Influence Coffee’s Price:
Four major corporations dominate the Robusta coffee world. Kraft, Nestle, Proctor & Gamble and Sara Lee account for more than 50% of all Robusta coffee bean purchases, preferring Robusta beans to Arabica beans solely because of their price.\
On average, Robusta beans are 70% cheaper than Arabica beans, allowing for greater mass production uses.
Coffee Trading Tips
Coffee futures can make wide swings within each trading day. The extreme price variance makes coffee dangerous to trade on a short-term basis unless you can devote the time to monitoring the markets throughout the day.
You also have to be disciplined, control your risk and get out of the market quickly if the trade doesn’t work. Taking profits at your objectives is critical, as the market price can turn very quickly.
Considerations for Trading Coffee Futures
Coffee is one of the most interesting commodities to trade. It is also usually one of the most volatile. Coffee is a member of the soft complex and most of these commodities are prone to wild swings in price.
There are two main types of coffee: Robusta and Arabica. The coffee traded on the ICE Futures contract in the U.S. is Arabica. The Robusta coffee beans are considered to have more bitterness and it also contains more caffeine.