Complete guide to coffee trading

• Arabica: Arabica is considered the premium and more flavourful option of the two and is therefore more expensive, with beans selling for between $2.60/kg and $3/kg in recent times. Arabica makes up about 60-70% of all coffee production and mainly comes from Brazil and Colombia. View our Arabica price chart >
• Robusta: Robusta can thrive in lower altitudes and hotter climates (as the name suggests) and has a more earthy and bitter taste than Arabica, as well as a higher caffeine content. Robusta beans, which are mostly grown in Vietnam, have traded for between $1.50 and $2 in recent times and make up about 30% of the coffee bean market. View our Robusta price chart >

1. United States – around 20%
2. Germany – around 10%
3. France – around 9%
4. Italy – around 5%
5. Japan – around 4%

1. Register for an account. A live account will automatically grant you access to a free demo account, where you can practise safely with virtual funds.
2. Choose your product between spread betting and CFD trading. You can also trade forward contracts (similar to futures) on the coffee market, which are explained in more detail below.
3. Decide between Arabica and Robusta. Both types of coffee beans come with benefits and drawbacks, so do some research to find the most suitable coffee type for you.
4. Stay up to date with global news. Economic announcements and breaking news can have an impact on countries and subsequently, their commodity markets.
5. Consider risk-management controls. Each coffee type is priced differently, grown in separate locations and may be affected by different factors that carry an element of risk. An example is to set stop-loss orders on your trades, which can help to close out losing trades and minimise capital loss.

• Climate fluctuations: coffee grows on small trees, where the crop is susceptible to adverse weather conditions such as frost, freeze and prolonged periods of dry weather. If supply decreases as a result of ruined crops, the price of coffee may increase.
• Oil prices: the two leading exporters of coffee – Brazil and Vietnam – aren't located in the same area as the world's largest importers. If oil prices go up, this may increase transport costs, which means that coffee prices may rise too. Read more about oil trading.
• Geopolitics: coffee is mainly grown in developing nations, so any political instability can have an impact on global coffee prices.
• Seasonality: coffee consumption tends to peak during colder winter months and dip during warmer summer months. Therefore, this peak will align with the northern hemisphere, where demand is the greatest, between May and September, for example.
• Discretionary income: coffee is not a necessary part of a person's diet, therefore, high unemployment in the US and EU can reduce coffee consumption. Non-farm payrolls are an important economic indicator that help to highlight unemployment levels, in particular.

Each of these factors increase the likelihood of coffee being a volatile commodity. Some examples of this occurrence in the past include the following:

Coffee reached an all-time high of 339.86 cents in April 1977 due to one of the most damaging frosts ever to hit in Brazil. Two years before this date, the price was just 45 cents. Six months after, the peak prices had halved to 149 cents.

More recently, in 2011, prices increased partly due to the biennial cycle of lower and higher output for Brazil's Arabica coffee plants, before dropping off again throughout 2012 due to a bumper crop season. This may be useful information if you're are looking to trade over a longer period of time.

• Starbucks
• Keurig Dr Pepper
• Nestlé
• Key Coffee
• JM Smucker
• Restaurant Brands

We offer over 9,000 shares and ETFs (exchange-traded funds) to trade on via spread bets and CFDs. Browse our instruments​ page to search for more coffee-related shares.