What exactly are coffee futures?
Coffee C ® Futures The Coffee C contract is the world benchmark for Arabica coffee. The contract prices physical delivery of exchange-grade green beans, from one of 20 countries of origin in a licensed warehouse to one of several ports in the U. S. Europe, with stated premiums/discounts for ports and growths. Trading Coffee Futures The futures are traded in cents per pound. One contract of coffee controls 37,500 pounds of coffee.Investors can invest or trade Coffee through Futures, Exchange Traded Funds, CFDs and Spread betting platforms. Some of these products are leveraged products. Make sure you understand how leverage works before you dive in.
What are the risks of trading coffee futures?
As soft commodities, coffee futures can experience significant price fluctuations, making traders vulnerable to volatility. Geopolitical factors, such as changes in production policies or trade agreements in coffee-producing regions, can also impact coffee futures prices. Fundamentally, coffee prices have been increasing due to a combination of reduced supplies from weather problems in major producing countries like Brazil and Vietnam, tariffs on coffee imports, and better global demand.