Coffee

A beverage commodity of two species, arabica and robusta, with Brazil and Vietnam at the supply poles.

Overview

Arabica trades on the New York exchange in 37,500 pound contracts with certified warehouse stocks behind delivery, while robusta trades in London, the two split by flavor and caffeine. Brazil grows both poles of quality and volume, and Vietnam is the robusta king. Weather sets price: Brazilian frosts and droughts, as in 2021, spike futures because trees take years to replace, and Vietnam rains and stockpiling move London. Differentials, the physical premium over the flat price, track origin quality. Leaf rust in Central America, EU deforestation rules, and growing consumption inside producing countries pressure supply, and demand grows with emerging market incomes.