Coffee Trading

Approximately two billion cups of coffee are consumed every day. Coffee is not only a popular beverage, it is also an important global commodity. It is the second largest export in the world after oil in value. There are over fifty coffee producing countries where earnings from this commodity play a vital importance to the country’s economy.

We have a strong network within the global coffee trading markets across the globe; Africa, Asia, Middle East, Europe, USA and LATAM. Our soft commodities team has strong connections with coffee traders, coffee purchasers, coffee supply chain managers, coffee analysts etc. (related vacancies here).

They have recently assisted with the following assignments:

  • Arabica & Robusta Coffee Trader, Africa
  • OTC Coffee Marketer, Sao Paulo
  • Specialty Coffee Trading Manager, East Africa/Central America/Latin America
  • Coffee Logistics Manager, Switzerland
  • Coffee Market Analyst, Singapore

How is Coffee Produced?

The raw fruit or cherry from the coffee plant is picked and the fruit or pulp removed leaving the seed (bean). There are two methods used to separate the seed from the fruit:

  • Dry method: the oldest method of processing coffee. The freshly picked fruit is washed and spread out to dry in the sun. They are regularly raked and turned during the day and covered at night to prevent spoiling or the cherries getting wet. This process continues for up to several weeks until the cherries are dried to the optimum moisture content. The dried cherries are stored in silos until they are sent to the mill for further processing. About 90% of the Arabica coffee produced in Mexico is separated in this way.
  • Wet method: the skin and pulp are removed from the bean mechanically after harvesting to the bean is dried with only the parchment skin left on. The beans are then separated by weight and transported to large water-filled fermentation tanks where they will remain for anywhere from 12 to 48 hours to remove the layer of mucilage still attached to the parchment. While in the tanks, naturally occurring enzymes will the mucilage to dissolve. They are subsequently rinsed in preparation for drying. The beans are dried to the same water content as the beans in the dry method in order for them to be stored properly. They can be sundried like in the dry method or machine dried in large tumblers. The dried beans from this method are known as parchment coffee.

After the drying process, the seeds are hulled. For wet processed coffee, this refers to the removal of the parchment layer while for dry processed coffee it is in reference to removing the entire dried husk of the dried cherries. Some processors may opt to have an additional stage which is polishing where any silver skin remaining on the beans after hulling is removed by machine.

In the final stages, coffee is cleaned and sorted by density of bean and bean size. Any defective beans are removed either by hand or by machinery to ensure that only the finest quality of beans are exported. These milled beans are referred to as green coffee.

How is Coffee Traded?

There are two main types of coffee bean which are traded: Robusta (coffea canephora) and Arabica (coffea arabica). Both are produced in the coffee belt, typically within 1,000 miles of the equator (more information).

Brazil is by far the largest producer and exporter of coffee in the world, contributing 30% of the world’s coffee supply. Other top producers include Vietnam, Colombia, Indonesia, Ethiopia and Honduras.

Most coffee production is in developing countries, while most consumption is in industrialised economies. The top coffee importer is the EU followed by the USA, Japan, the Russian Federation and Switzerland.

Green coffee (milled beans) are shipped in bulk in lined containers or in either jute or sisal bags loaded in shipping containers. Exporters buy the coffee from farmers, co-operatives or auctions, and then sell on to dealers. It is typically sold to coffee roasters around the world in order to turn the beans into the products sold by retailers.

Coffee trading can be also executed on many exchanges. In order to manage price risk, consumers and producers trade coffee futures to secure selling or purchase prices.

Who are the Customers?

  • Catering organisations
  • Coffee shop chains
  • Independent coffee retailers
  • Roasters
  • Supermarkets

 

More Information:

Live coffee trade prices

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