{"id":58147,"date":"2024-09-16T08:40:09","date_gmt":"2024-09-16T06:40:09","guid":{"rendered":"https:\/\/espressoacademy.it\/uncategorized\/come-funzionano-le-quotazioni-del-caffe-arabica-e-robusta\/"},"modified":"2024-09-25T09:50:11","modified_gmt":"2024-09-25T07:50:11","slug":"how-the-price-of-arabica-and-robusta-coffee-work","status":"publish","type":"post","link":"https:\/\/espressoacademy.it\/en\/news-en\/how-the-price-of-arabica-and-robusta-coffee-work\/","title":{"rendered":"How the price of Arabica and Robusta Coffee work"},"content":{"rendered":"\n
\"price<\/figure>\n\n\n\n

How the price of coffee is determined<\/h2>\n\n\n\n

We know the reference markets: coffee is traded in New York for Arabica<\/strong> and in London for Robusta<\/strong>. But how is the price of coffee determined? In this post, we’ll explore a world where prices are influenced by climate<\/strong>, demand<\/strong>, and speculation<\/strong>.<\/p>\n\n\n\n

You may often read in newspapers or on social media about the latest price increases<\/strong> for a cup of coffee. If these posts or articles aren’t just being argumentative (which often happens), they will try to explain how the price of coffee is influenced by certain climatic elements<\/strong>, such as prolonged drought in Asia or an overly cold winter in southern Brazil. As you can imagine, these events lead to a scarcity of coffee<\/strong>, which, combined with an increase in demand (for example, more people drinking coffee in China), causes the price of coffee to rise.<\/p>\n\n\n\n

But how exactly does this mechanism work? How is the price of coffee determined? Who sets the quotes for Arabica coffee<\/strong> or the price increases<\/strong> for Robusta coffee<\/strong>?<\/p>\n\n\n\n

Like other commodities<\/strong>, this is done by the stock exchange<\/strong>. If you’re curious about how the coffee market works, sit back and get ready for an immersion into the world of finance<\/strong>.<\/p>\n\n\n\n

Commodity or specialty?<\/h2>\n\n\n\n

The first important element: what type of coffee are we talking about in terms of quality? For several years now, the coffee market has been divided into two major areas: one huge and one growing.<\/p>\n\n\n\n

The commodity coffee market<\/strong> represents about 98% of the total. This segment includes coffee often blended together, of variable quality but never very high. These coffees are used in supermarkets, most bars and cafes, for pods and capsules<\/strong>, for decaffeinated coffee<\/strong>, and for coffee-based preparations (ice creams, chocolate, flavors, etc.).<\/p>\n\n\n\n

Specialty coffee<\/strong>, on the other hand, makes up a small but growing portion of the market. These are high or very high-value coffees, often traceable to the farm level and marked with a technical score<\/strong> ranging from 80 to 100 points.<\/p>\n\n\n\n

\"Cupping<\/figure>\n\n\n\n

Specialty coffees<\/strong> are usually sold through online auctions<\/strong> or direct relationships with growers. We won’t discuss these coffees in this post, but if you’re fascinated by the specialty culture, you can start discovering how the cupping process<\/strong> works\u2014the tasting process by which these coffees are evaluated\u2014by visiting the page on coffee tasting courses<\/strong> <\/a>and participating in our coffee sensory Courses.<\/a><\/p>\n\n\n\n

In this post, we will instead focus on how the price of commodity coffee<\/strong> is determined, coffee that, like other commodities such as grains<\/strong> or metals<\/strong>, is traded in the cathedral of negotiations and finance<\/strong>: the stock exchange<\/strong>.<\/p>\n\n\n\n

How the price of coffee is determined on the stock exchange<\/h2>\n\n\n\n

On international markets, Arabica coffee<\/strong> is mainly traded on the ICE Futures US<\/strong> (Intercontinental Exchange) based in New York, while Robusta<\/strong> is traded on the London International Financial Futures and Options Exchange<\/strong> (LIFFE).<\/p>\n\n\n\n

Coffee is traded through futures contracts<\/strong>, which are agreements to buy or sell a specific quantity of coffee at a predetermined price at a future date. These contracts allow coffee producers and traders to hedge against price fluctuations<\/strong>, ensuring some economic stability. Investors also use futures contracts<\/strong> to speculate on coffee price movements, but this complex topic, which leans more towards finance<\/strong> than coffee, will be left for another post.
<\/p>\n\n\n\n

\"Coffee<\/figure>\n\n\n\n

These are the reference prices<\/strong>, which you can follow on sites specialized in the futures market: IFC Markets<\/strong>.<\/a><\/p>\n\n\n\n

Like any stock or commodity traded on the stock exchange<\/strong>, coffee prices fluctuate on the charts, depending on a series of factors, some clear, others less tangible. Among them could be:<\/p>\n\n\n\n