SOFTS - Coffee

From the plantation to the cup, coffee can be an important part of a country's agricultural output - as well as a kick-start to the consumer's morning. Whether the beans are destined for an intimate coffee house or a bulk instant coffee, the right mix of growing, drying, and roasting will fill the needs of caffeine lovers across the globe. The following contract specifications will refer to the Coffee "C" (Arabica) futures contract traded on the Intercontinental Exchange.

Contract Size:

37,500 pounds.

Price Quote & Tick Size:

Cents and hundredths of a cent per pound; minimum fluctuation is 5/100ths ($.0005) of a cent or $18.75 per contract.

Contract Months:

March, May, July, September, December.

Trading Specs:

Futures trade electronically on the InterContinental Exchange 3:30 am - 2:00 pm ET. Option Floor Trading: 08:00 to 13:30 Eastern time; closing period commences at 13:28.

Daily Price Limit:

Currently none, but you should always consult the exchange.

Trading Symbols - KC



PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
***chart courtesy Gecko Software

The coffee bush or tree is grown in the tropics and does best far from the touch of winter frost. Higher elevations suit coffee bushes and the best yields come with good amounts of water and fertilizer. "Beans" are actually the seeds or pits found inside the fruit of the coffee plant - the cherry. Normally red, these fruits are produced by plants which are around three to five years old, with the possibility of being up to one hundred years old. It can take seven to nine months for the berry to mature for Arabica and ten to eleven months for the Robusta. The unroasted - or green - "beans" are removed from the cherry during processing in either a wet or dry method. In the dry method, cherries are dried in the sun, a process which can take up to four weeks. They are later hulled.

The coffee plant is native to subtropical areas of Africa and Asia but is now cultivated in countries within that zone across the globe. There are many species of coffee plant with the two most recognizable being Coffea Arabica and Coffea canephora - Arabica and Robusta, respectively. Arabica is considered to have the best quality.

Brazil and Vietnam are leaders in coffee production with the South American grower producing mostly Arabica beans and the Southeast Asian nation growing more of the Robusta beans. Brazilian harvest will typically begin in May and last through September. The arrival of coffee may then begin one to two months after harvest ends. This can, of course, vary.

Among the top producing countries, the following table shows production in 1000 60 kg bags of green coffee for the select years:

Among the top importing countries, the following table shows imports in 1000 60 kg bags of green coffee for the select years:

***data courtesy USDA

Top domestic consumption in 1000 60 kg bags of green coffee is distributed in select years as follows:

***data courtesy USDA



Key Terms


Green beans - raw, unroasted coffee beans


ICO - International Coffee Organization - a group of producing and consuming nations who work together on coffee related issues and marketing. According to their site, "ICO exporting Members account for over 97% of world coffee production and its importing Members are responsible for around 80% of world coffee consumption."

International Trade Issues - Since coffee is grown in specific regions of the globe, the political situation in countries which produce it as well as trade policies in import countries can have an effect on the supply and demand of beans. The lifting of the US trade embargo against Vietnam is often cited as a catalyst in the rise of Vietnamese production and trade of coffee. Demands for fair trade coffee can also directly affect smaller farmers by guaranteeing them a minimum price per pound of coffee.

Environmental Impact -Coffee plants can be cultivated in shade under a forest canopy or with sun cultivation which may speed cherry ripening and is said to increase yields. The shade grown varieties are often considered "organic" since sun cultivation is achieved by clearing forests and may require additional water, fertilizer, and pesticides. Pressure on some modern sun cultivating coffee farms to change methods can be great.

Weather -Arabica coffee does well with evenly distributed rainfall throughout the year to a total of 40 to 59 inches. Drought can be devastating. Coffee plants do not do well with frost, either. Sunshine or lack thereof can be important after ripening for dry method processing as well since drying cannot take place in rainy weather. Heavy rains during the key blossoming times may impact yields if flowers are damaged.

Disease - Nematodes, coffee berry disease, hemileia vastatrix - like most agricultural products, coffee plants have their share of pests and disease. The Robusta variety has natural resistance to many of these while Arabica requires a bit more care.

Consumer Demand - Whether a shift to coffee consumption in traditional tea drinking cultures or an economic recession, traders are always looking for indications of overall demand.

Drip, espresso, instant, decaf - coffee is consumed as a beverage hot or iced. Beans are roasted and usually ground to deliver a caffeinated treat while the fruit is discarded or used as fertilizer.