Coffee trading is a hidden treasure that many have not yet discovered. Coffee stays stable in almost all market conditions. The secret f a balanced portfolio is diversification between different currencies and commodities Although many had yet to discover coffee trading's massive potential, this commodity remains steady in almost any market condition. We believe that in order to maintain a well-balanced portfolio, a trader needs to combine a wide variety of currencies and commodities. That way you don't put all your eggs in one basket.
Interesting facts about the Coffee market
The major supplier of the coffee market comes from Brazil, Vietnam, Indonesia and Colombia with Brazil leading the market, producing twice as much as the runner-up, Vietnam. However, the cheaper cost of the Vietnamese beans creates an interesting competition within this market.
What affects the prices in coffee commodity trading?
•South American Arabica coffee beans are considered to be of better quality, therefore more expensive. Thus, Arabica exporting countries are open to competition from countries producing cheaper Robusta bean, however, creating an interesting coffee trading climate.
•“Fair trade” beans have made quite an impact on the market and continue to gain influence. This means that the coffee growers are guaranteed a fixed price before harvest. This leads to an environment which fosters more privately negotiate deals with co-ops worldwide.
•Coffee is also the subject in medical research, in fields such as Alzheimer’s, liver cirrhosis, gout and more. In the event of a breakthrough, this could have interesting impact on the coffee commodity trading market.
•Coffee is the key cash crop in many countries, and some of the world’s poorest depending on coffee for their income. This results in cyclic pricing, due to the varying in crops and the impact on the farmers. Coffee trade is also highly seasonal.
Coffee is a steady market, with high demand. The increase in produce of Robusta growing countries creates an interesting juxtaposition between quality and cost. Also, the increasing interest in fairly sourced beans is establishing a luxury niche market. All these characteristics of the market make it difficult to predict, but coffee can also be quite profitable. In an environment where demand is starting to exceed the easy accessible supply, and green consumption is becoming more and more of a trend, people are willing to pay premium costs for goods, counter to previous economic indicators. As a whole, coffee trading is in an interesting state of flux, and with the right strategies, traders can increase their profits.
Coffee trading is a curious commodity which could offer good opportunities for both beginners and experienced traders. Keep in mind that smart traders always diversify.