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In a world where caffeine is king and coffee reigns supreme, it's only natural to ponder whether this beloved bean follows the same strict schedule as the stock market. After all, coffee owns us most mornings.
But does this mean coffee markets have trading hours? Let's brew this topic a bit further.
Coffee first came from Ethiopia and then spread all over the world. By the 1600s, it was popular in Europe, which led to the rise of coffeehouses as places to hang out. Coffee has become an important part of the world economy thanks to countries like Brazil that grow a lot of it.
Trading coffee comes in the form of Arabica and Robusta and it plays a big part in both industry and investing. If you plan on adding coffee to your portfolio, then you need to understand how the market works and when it trades to help you make an informed decision.
Arabica beans are the most expensive type of coffee beans. Some of the best places to grow these beans are in Asia, Arabia, Latin America, and Eastern Africa. They need to grow in certain circumstances, like being at a high elevation, having lots of shade, and stable temperatures.
For traders, Arabica beans are like a stock that needs a lot of care but could have a big payoff. This is because they taste better and require more work to grow, so they usually cost more. It has a more polished and rich taste, with hints of chocolate, nuts, and fruits. This level of complexity is enjoyable for both the taste buds and the market, which tends to lead to price volatility. If a crop fails because of bad weather or pests, prices can go through the roof faster than a caffeine rush.
Think of Robusta as the 'everyday' coffee. It's stronger, easier to grow, and has twice as much caffeine as Arabica. These beans do well at lower altitudes and can handle rougher conditions.
Robusta beans are usually cheaper, but they taste stronger and bitter, like earth or wood. This means they aren't as popular in the speciality coffee market, but they are a must-have for espresso mixes and instant coffee. For traders, Robusta is considered a stable investment. Price changes are less likely to be unpredictable because the plant is strong, which makes supply less dependent on the weather.
Coffee CFDs with FP Markets:
FP Markets offers traders the opportunity to engage in coffee trading through Contracts for Differences (CFDs). Coffee CFDs allow traders to speculate on the price movement of coffee without the need for physical delivery of the commodity. These are leveraged products that are always settled in cash, meaning physical delivery of coffee is never an option in CFD trading.
At FP Markets, coffee CFDs are accessible for trading from 12:15 to 20:30 a day, five days a week. The trading hours for coffee CFDs reflect the unique nature of the coffee market and ensure that traders can respond swiftly to market changes and news that may impact coffee prices globally.
In the futures market, coffee trading lets investors speculate on its future price. These can be physically settled (taking delivery of the actual coffee) or cash-settled. This market is relevant for those involved in the coffee industry, such as producers and distributors, as it offers a way to hedge against price fluctuations.
According to major commodity exchanges like the Intercontinental Exchange (ICE), coffee trading hours typically run during regular business hours, with variations depending on the specific market and geographical location.
Trading Hours for Coffee C Futures Contract:
The KC contract, which stands for ‘Coffee C’, is the world standard for Arabica coffee. It sets the price for exchange-grade green beans. One of the 20 countries of origin must physically send the goods to licenced stores in different places in the US and Europe, according to this contract. There are premiums and rebates based on the port of transport and the location of the coffee. This gives this widely traded commodity an organised and clear way to set its prices.
Trading Hours for Robusta Futures Contract
The Robusta Coffee futures contract, which is represented by the sign 'RC', is used as a standard worldwide to set prices for physical Robusta Coffee. Farmers, traders, trade houses, importers, and roasters are just some of the people who actively take part in the market. Traders of this contract also include managed funds, large companies, and both long-term and short-term investors. That just shows it's important in the global market.
FP Markets lets you trade a lot of different commodities, from well-known precious metals like gold and silver to fast-paced farming commodities like coffee. Traders and investors can analyse these markets using our cutting-edge tools, such as MetaTrader and cTrader.
Consider opening a demo account with FP Markets. It's a quick and easy process that gives you access to a huge range of markets and lets you practise trading commodities like coffee on superior trading platforms.
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