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Coffee: current price, history, usage, chart

Updated on February 13, 2024

Do you like a cup of hot coffee? And did you know that coffee is also a popular commodity to trade? If you’re considering trading this agricultural commodity, you can’t go wrong by doing some research on it first. And it is for this purpose that we have prepared this article for you. So make a coffee and read.

Features and uses

CONTENT OF THE ARTICLE

Espresso, latte macchiato, or perhaps cappuccino? Coffee is best known as a dark, bitter drink that should give you energy. Someone can have it only exceptionally, while others are literally addicted to it. However, the truth is that coffee is a social drink spread all over the world. Although in different forms. In Africa, Asia, Europe and America. We can hardly find a person who does not know her.

But coffee is not just a drink. It is also used as a flavoring in various desserts. We can remember, for example, Tiramisu, chocolate cakes or maybe Coffee. It therefore finds use in the food industry. Some people also use it as a substance that provides energy and activates brain activity.

Coffee beans are a source of caffeine, along with cocoa beans or tea tree leaves. This substance is also used in medicine. It serves as an ingredient in various medications. For example, to analgesics. It is also used to treat asthma and some infectious diseases. On the other hand, excessive caffeine use can cause health complications. For example, restlessness or insomnia.  

Coffee production

Coffee is obtained from the seeds of coffee beans. These are the fruits of a plant called the coffee plant. After separating these seeds, the coffee beans are roasted. And then grind. This creates a shape you are sure to be familiar with, from which your favorite drink is prepared. Today, however, you can also find whole roasted coffee beans on the market, which you can then grind at home.

There are several varieties of coffee plants. The most widespread species is Arabica. This corresponds to roughly 70% of the total world production. The second most widespread, although not nearly as much as Arabica, is robusta. The volume of its production corresponds to about 25% of the total production. However, the coffee that you normally find in stores today is mostly a mixture. 

History

We would look for the cradle of this commodity in Africa. And specifically in Ethiopia, where the blond bushes of coffee trees still grow today. African indigenous tribes are said to have known about coffee since ancient times. They did grind coffee beans, but not to make a drink. They were supposed to make porridge from the ground grains. They then fed the farm animals. But also his warriors. Coffee was supposed to increase their performance in battle.

However, some of these warriors fell into Arab captivity. And so the awareness of this commodity also reached the Arabs. It was precisely in the region of the Arabian Peninsula where it was purposefully cultivated for the first time. This happened already in the 13th century, when a drink similar to the one we know today began to be produced here from ground coffee beans. In the 15th century, the popularity of coffee rose so much that it began to be exported all over the world.

The problem was, however, that the Arabs claimed the invention of the coffee drink so much that they refused to export unroasted coffee beans. No one else could grow this plant. Only the Indian pilgrim Bada Budan had to outwit them. He was supposed to bring a handful of germinating coffee beans to South India from his trip to Mecca, which he planted there.

How to trade coffee

We certainly know how coffee is usually consumed. But let’s look at the possibilities of how you can trade this raw material. There are several ways in which you can make money from this agricultural commodity. Wondering which one? Let’s take a look at them.

Physical coffee

One of the places where coffee can be traded is the commodity exchange. On the one hand, the producers meet at this place. And on the other hand, those who need to physically own the coffee. That is, those who create other products from it.

Physical coffee is usually traded through futures contracts. It is a contract that binds both parties to conduct business in the future. The subject of the contract is the determination of the exact date when a pre-determined volume of the asset is to be exchanged for a pre-determined price. In this way, both parties guarantee a price that suits them in advance, thus insuring themselves against a situation where the price should rise significantly or, on the contrary, fall significantly.

Coffee CFD trading

But if you are one of the small, individual traders who only want to make money from trading and do not need to physically own it, then trading with CFD contracts will probably be more advantageous for you. In that case, you are not trading physical assets. So you don’t have to be burdened by matters such as transport and storage of coffee.

Trading with  CFD contracts works in such a way that you only speculate on the development of the price level of the asset. Therefore, if during your market research you come to the conclusion that the value of the commodity should increase in the near future, then you enter a buying position. If, on the contrary, you think its value should decrease, then you enter a selling position. Well, depending on whether you estimate the development of the price level correctly, you will make a profit or a loss on your trade.

Beware of risks

As with all investments, we can find certain risks in coffee trading that we should be aware of in advance. Trading with CFD contracts certainly brings many advantages to traders. But keep in mind that you are usually trading with leverage in this type of trading. What is this financial leverage for? It will affect the amount of your final earnings.

Depending on how much leverage you trade with, your profit will multiply. You can earn money fast. And several times what you would earn without financial leverage. However, you must pay attention to the fact that the financial leverage will also multiply your potential profit.

What affects the price of coffee

Let’s now look at the factors that influence the development of the value of this commodity. These result, among other things, from the fact that it is an agricultural commodity. The upward or downward movement of the price can be caused by the weather. If the coffee plants have ideal conditions, then the producers can look forward to a high harvest. On the other hand, the weather can destroy the crop. This would mean an increase in price. The price of coffee is also influenced by the political and economic situation in the world.

Coffee – current online chart

Coffee is traded in pounds and quoted in US dollars. For example, if you buy 37,500 pounds, you will buy about 17 tons of coffee. See how the price of coffee has evolved over time.

Development of interest in the commodity

Similar to other agricultural commodities, if we were to compare the development of its price over the course of several years, we would find certain similarities. Its value also regularly depends on the time of harvest.

Coffee – summary

Coffee is one of the most popular commodities for trading. So if you want to trade it through CFD contracts, you will certainly find a large number of brokers who will allow you to do so. Since it is an agricultural commodity, timing the right entry into the trade is good based on the regularities you notice over the years.

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