Coffee futures are part of the softs commodities markets, and are based on coffee production in primary regions. Most production is dominated by countries such as Brazil, Vietnam, Indonesia and Colombia. India, Guatemala, Ethiopia and Mexico are also major producers.
Coffee was originally discovered in Ethiopia more than 2,000 years ago. From Africa, coffee found its way to the Middle East and into coffee houses, which gave coffee its exposure to many travelers. The two most commonly grown species of the coffee plant are Coffea Canephora and C. Arabica, which are cultivated in Latin America, Southeast Asia, and Africa. Arabica coffee is by far the most popular variety.
The largest consumers of the commodity are in the Netherlands, Finland, and Sweden, with the U.S. far down the list at No. 15. World coffee exports amounted to 8.85 million bags in December 2014, compared with 8.83 million bags in December 2013, according to the International Coffee Organization.
The price of coffee has been extraordinarily volatile over the years, both in current- and constant-dollar terms. It is subject to supply disruptions such as freezes in the Brazilian highlands, and to new exporters buying market share via lower prices
You can learn more about Soft futures by downloading our guide, Free Fundamentals of Trading Soft Futures.
|Contract Symbol||Contract Unit||Price Quotation|
|IKC||37,500 lbs||cents per pound|
|Trading Exchange||Trading Hours||Tick Value|
|ICE||4:15 - 13:30 (NY)||$0.05/lb = $18.75|