Coffee
Coffee is one of the most widely traded commodities globally, with annual revenues of $200+ billion. This guide to trading coffee online explains what moves prices, how to trade the soft commodity, plus key trends and facts. Use our ranking of the best coffee trading brokers in 2024:
Best Coffee Brokers UK
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AvaTrade is a leading forex and CFD broker, established in 2006 and regulated across 9 jurisdictions. Over 400,000 users have signed up with the broker which processes over 2 million trades each month. The firm offers multiple trading platforms, including MT4, MT5, and a proprietary WebTrader. 1250+ financial instruments are available for trading, alongside a comprehensive education center and multilingual customer support.
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Founded in 2002 in Poland, XTB now serves more than 935,000 clients. The forex and CFD broker combines a heavily regulated trading environment with an extensive selection of 5,600+ assets and a commitment to trader satisfaction, featuring an intuitive in-house platform with superb tools to support aspiring traders.
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Established in 1989, CMC Markets is a respected broker listed on the London Stock Exchange and authorized by several tier-one regulators, including the FCA, ASIC and CIRO. More than 1 million traders from around the world have signed up with the multi-award winning brokerage.
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Spreadex is an FCA-regulated broker that offers spread betting opportunities on an impressive 10,000+ CFD instruments including 60 forex pairs. Traders can also take short-term positions on sporting events. The brand has been around for over 20 years and has won multiple awards.
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Established in Australia in 2010, Pepperstone is a top-rated forex and CFD broker with over 400,000 clients worldwide. It offers access to 1,300+ instruments on leading platforms MT4, MT5, cTrader and TradingView, maintaining low, transparent fees. Pepperstone is also regulated by trusted authorities like the FCA, ASIC, and CySEC, ensuring a secure environment for traders at all levels.
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IC Markets is a globally recognized forex and CFD broker known for its excellent pricing, comprehensive range of trading instruments, and premium trading technology. Founded in 2007 and headquartered in Australia, the brokerage is regulated by the ASIC, CySEC and FSA, and has attracted more than 180,000 clients from over 200 countries.
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XM is a globally recognized forex and CFD broker with 10+ million clients in 190+ countries. Since 2009, this trusted broker has been known for its low fees on 1000+ instruments. XM is regulated by multiple financial bodies, including the ASIC and CySEC.
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Founded in 1999, FOREX.com is now part of StoneX, a financial services organization serving over one million customers worldwide. Regulated in the US, UK, EU, Australia and beyond, the broker offers thousands of markets, not just forex, and provides excellent pricing on cutting-edge platforms.
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eToro is a top-rated multi-asset platform which offers trading services in thousands of CFDs, stocks and cryptoassets. Launched in 2007, the brand has millions of active traders globally and is authorized by tier one regulators, including the FCA and CySEC. The brand is particularly popular for its comprehensive social trading platform. Cryptoasset investing is highly volatile and unregulated in the UK and some EU countries. No consumer protection. Tax on profits may apply. 76% of retail CFD accounts lose money.
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RoboForex is an online broker, established in 2009 and registered with the IFSC in Belize. Traders can choose from five accounts (Prime, ECN, R StocksTrader, ProCent, Pro) catering to different needs with trades from 0.01 lots and spreads from 0 pips. RoboForex has also enhanced its offering over the years, adding CFD instruments and launching its stock trading platform, plus the CopyFX system.
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InstaForex is a forex and CFD broker founded in 2010. The broker offers diverse market coverage to millions of clients, spanning traditional assets like currencies and shares, as well as other interesting opportunities such as IPOs.
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Founded in 1974, IG is part of IG Group Holdings Plc, a publicly traded (LSE: IGG) brokerage. The brand offers spread betting, CFD and forex trading across an almost unrivalled selection of 17,000+ markets, with a range of user-friendly platforms and investing apps. For 50 years, IG has maintained its position as an industry leader, excelling in all key areas for traders.
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BlackBull is a New Zealand-based CFD broker with trading opportunities on forex, stocks, indices, commodities and cryptos. The broker supports the MetaTrader 4 and 5 platforms as well as TradingView, cTrader and a proprietary mobile app. Clients can trade with high leverage and tight spreads from 0 pips on the broker's ECN accounts.
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Founded in 2009, Vantage offers trading on 1000+ short-term CFD products to over 900,000 clients. You can trade Forex CFDs from 0.0 pips on the RAW account through TradingView, MT4 or MT5. Vantage is ASIC-regulated and client funds are segregated. Copy traders will also appreciate the range of social trading tools.
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Established in 2008 and headquartered in Israel, Plus500 is a prominent brokerage that boasts over 25 million registered traders in over 50 countries. Specializing in CFD trading, the company offers an intuitive, proprietary platform and mobile app. It maintains competitive spreads and does not charge commissions or deposit or withdrawal fees. Plus500 also continues to shine as one of the most trusted brokers with licenses from reputable regulators, including the FCA, ASIC and CySEC.
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Fusion Markets is an online broker established in 2017 and regulated by the ASIC, VFSC and FSA. It is best known for its low-cost forex and CFD trading, although its multiple account types and copy trading solutions cater to a range of traders. New clients can sign up and start trading in 3 easy steps.
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Axi is a global forex and CFD trading firm, founded in 2007 in Sydney, Australia. Highly leveraged trading opportunities plus a $0 minimum deposit make it a popular choice among 60,000+ traders worldwide. Axi also stands out for its resources, including copy trading and Autochartist.
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Founded in 2015, VT Markets maintains its position as a top Australian multi-asset CFD broker. With 1000+ tradeable instruments and support for the MetaTrader 4 and MetaTrader 5 platforms, this broker delivers a wide range of trading opportunities to over 200,000 clients worldwide. VT Markets is regulated by the ASIC, FSCA, and SVGFSA.
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Trade.com is a trustworthy online broker with a global presence. The broker offers 2,100+ CFDs in major markets, as well as futures, options and more. The broker offers best-in-class platforms and superior analysis tools for experienced traders. The broker is also regulated by top-tier authorities including the FCA and CySEC.
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Grand Capital is a MetaTrader broker with welcome bonuses, trading competitions and an intuitive copy trading service. Several account types and 400+ assets provide trading opportunities for various types of investors and strategies. New users can also open an account and start trading in a matter of minutes.
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IronFX is a multi-regulated forex and CFD broker founded in 2010. This award-winning firm offers 500+ markets to over 1.5 million clients across 180 countries. Traders can access various account types with competitive pricing on the MT4 platform, as well as 24/5 customer support in 30 languages.
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Ingot Brokers is a multi-regulated brokerage established in 2006. The broker offers CFD trading opportunities on 1000+ instruments including forex, stocks, indices, commodities and cryptocurrencies. The broker supports the MetaTrader 4 and MetaTrader 5 platforms and offers both raw spreads and commission-free account options.
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Dukascopy is an online broker operated by a Swiss-regulated banking group. It offers a good selection of 500+ markets, with forex, stocks, gold, ETFs, indices, bonds and cryptocurrencies available. It also offers flexible trading opportunities through the choice of CFDs or binary options. Traders will use MetaTrader 4 or a proprietary platform that is well-suited to automated trading.
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MultiBank FX is an established broker offering forex and CFD products since 2005. With 20,000+ instruments, plenty of local payment methods and 24/7 multilingual customer support, the broker is a popular choice among traders globally. New clients can also access a variety of bonus offers and access the hugely popular MT4 and MT5 trading platforms.
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Pacific Union Prime is an FSCA and offshore-regulated multi-asset broker offering competitive fees and direct market access on forex, commodities, stocks, bonds and indices. The broker supports the popular MetaTrader 4 and MetaTrader 5 platforms and a proprietary mobile app. Fees vary by account type with no commission and spreads from 1.9 pips on the Standard account and $7 commission per lot and spreads from 0.4 pips on the Prime account.
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SimpleFX is an online broker specializing in CFD and cryptocurrency trading, with multi-currency accounts, STP execution, low pricing and no minimum deposit. Bringing innovation and gaining recognition at numerous industry events since 2014, SimpleFX now caters to retail traders from over 190 countries, boasting a client base exceeding 200,000 active users.
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Errante is a Cyprus-based and regulated forex and CFD broker with leveraged trading on multiple assets, tiered accounts including a zero-spread option, and copy trading support. The broker offers leveraged trading up to 1:30 under its CySEC-regulated branch and 1:500 from an offshore branch, and supports the MetaTrader 4 and MetaTrader 5 platforms. Errante's asset list is relatively limited but it does offer fast execution and low latency, and it is a trustworthy brand.
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ActivTrades is a UK-headquartered CFD and forex broker established in 2001. The brokerage is heavily regulated with licenses from the FCA, SCB, CSSF, BACEN & CVM and CMVM. Over 1000 CFDs are available spanning 7 asset classes. Over 93.60% of orders are executed at the requested price. ActivTraders also offers a selection of leading trading platforms, including MT4, MT5, TradingView and ActivTrader platforms.
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Established in 2005 in Australia, FP Markets is an ASIC- and CySEC-regulated broker boasting an extensive suite of tradable assets. Its Standard and Raw accounts cater to traders at every level, while it packs a punch in the tooling department, from the MetaTrader suite and intuitive TradingView to actionable trading ideas from Trading Central and AutoChartist.
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HYCM is an online broker with authorization from four international bodies including the FCA and CySEC. The broker offers short-term CFD trading on forex, shares, commodities, indices, ETFs and Bitcoin, and supports the MT4 and MT5 platforms, as well as Trading Central analysis.
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Libertex is a well-known broker, established in 2012. The regulated brand has served numerous clients and is regulated by the Cyprus Securities and Exchange Commission with license number 164/12. Libertex offers CFD trading on 250+ underlying assets, including through an innovative and user-friendly proprietary web trader platform. Choose between CFDs on forex, cryptocurrencies, commodities, stocks, indices and ETFs, which are available with tight spreads and low commissions.
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Infinox is a UK-based and FCA-regulated broker that offers diverse trading products thanks to its STP and ECN account types and support for MetaTrader 4, MetaTrader 5 and a proprietary platform. Clients can also benefit from a free VPS that can support automated strategies and a social trading platform, catering to both beginner and seasoned traders.
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Amega is an offshore STP broker offering CFD trading on forex, stocks, indices and commodities with very high leverage up to 1:1000 and a zero-commission pricing structure. Traders access markets through the MT5 platform and can test the broker's services through a demo account.
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RaceOption is a binary options broker operating from the Marshall Islands. With over 1,500 clients, the broker aims to offer fast funding, low fees and a secure trading environment. Traders can access over 100 binary options and CFDs, plus copy trading and weekly prizes.
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FXCentrum is an offshore broker that offers highly leveraged, commission-free trading on diverse instruments with tight spreads. Traders can access forex, equity and commodities markets via MetaTrader 5 or the proprietary FXC platform and use the award-winning ZuluTrade platform for copy trading.
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Capital.com offer CFDs on a range of markets with competitive spreads and zero commissions. The broker also offers the Investmate app, negative balance protection and leveraged trading.
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Trading 212 is a European and UK-regulated CFD broker that also offers stock investing and ISAs. It’s best known for its commission-free trading model and beginner-friendly app, which has helped it attract 2.5 million users and £3.5 billion in client assets.
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LegacyFX is a multi-asset broker offering an MT5 download & free signals.
Coffee Trading Basics
Coffee trading involves the buying and selling of contracts for coffee beans to speculate on price volatility.
The two types of coffee traded are Arabica and Robusta beans:
- Arabica beans are regarded as higher quality and tend to be more expensive. Arabica accounts for 70% of total coffee production and grows predominantly in Brazil and Colombia. It is estimated to trade at around $5.41 per kilo in 2024.
- Robusta beans grow in hotter climates and can withstand more extreme weather conditions. It has a higher caffeine content and a more bitter taste. It is estimated to trade at around $2.11 per kilo in 2024.
The price of Arabica tends to be more stable, whereas Robusta can be more volatile, attracting active traders with a higher risk appetite.
How To Trade Coffee
There are a number of ways to trade coffee in the UK:
- Futures: Futures contracts allow investors to lock in a price at a set point in the future and are often used for speculation or hedging. They are popular due to their high liquidity and high volatility. Futures contracts come with the expectation that a physical exchange of goods will take place which makes them trickier for individual investors. However, most contracts are traded prior to expiration.
- Options: Coffee options can be traded on exchanges like the ICE and NYMEX. Options give traders the right but not the obligation to trade coffee at a specific price and date in the future. Options are often used to limit losses, as it is not possible to lose more than the premium.
- CFDs: Contracts for difference (CFDs) are a straightforward prediction of the direction that the price of coffee will move. Traders will either earn or pay the difference between the opening and closing of the contract. CFDs are offered by many retail brokers along with leverage, allowing traders to boost their purchasing power with a small upfront investment. Both long and short positions can be taken with coffee CFDs.
- Spread betting: Like CFDs, spread betting also involves making a call on the underlying price movement of coffee. Spread betting can only be executed over the counter (OTC) and profits are usually tax-free in the UK. Spread bets are particularly popular with short-term traders. CMC Markets is the best UK broker that offers spread betting on coffee.
- Stocks: Trading stocks in coffee production companies is not easily accessible as most firms are privately owned. However, investors can buy shares in companies involved in the refinement and sale of coffee-related products, including Starbucks, Nestle, and JM Smucker.
- ETFs: Exchange-traded funds (ETFs) can be used to trade coffee similar to stock trading. They are traded on an exchange and track the performance of a group of commodities or companies. ETFs are often used as a means of spreading risk and diversifying portfolios. One of the most popular coffee ETFs is the iPath Dow Jones-UBS Coffee Subindex Total Return ETN.
Today’s Price Chart
History Of Coffee Trading
Coffee trading can be traced back to the Ethiopian peninsula as early as the 15th century. As its popularity grew, it moved east to the Arabian peninsula, on to Europe in the 17th century, and in the mid-1600s, it arrived in New York.
In the 16th Century, Istanbul became the coffee epicentre of the world. The opening of the first coffee house in 1553 was quickly followed by many more. As the popularity of the beans grew, competition between regions grew. It became a valuable commodity and was exchanged for a range of goods and currencies.
Some of these early coffee houses went on to become large financial institutions, such as Lloyds of London.
Today, coffee is mostly cultivated in Central and Latin America, Africa, Southeast Asia and India. Brazil is the largest producer of coffee in the world, accounting for close to 50% of all coffee production globally.
More than 2 billion cups of coffee are now consumed every day.
Factors That Affect The Price Of Coffee
- Environmental changes: The climate can affect the supply of coffee beans which can in turn affect the price. For example, if there is a frost that wipes out all the coffee plants in a particular region, supply will decrease. This is what happened in the winter of 1977, when prices soared to 339.86 cents, up from 45 cents just two years earlier. Climate change is likely to have a big impact on coffee prices over the decades to come as extremes in weather wreak havoc on agriculture.
- Politics: Geopolitical events can also affect coffee trading prices. Disruption of global supply chains can lead to price hikes. Coffee is grown in regions prone to political unrest, including Brazil, Columbia, Honduras, and Ethiopia.
- Oil prices: When the price of oil rises, transportation costs increase, which can be reflected in the market price of coffee. The soft commodity often travels great distances, from the fields in Brazil to coffee shops in London. Long supply chains mean that any changes in transportation costs can have a large impact on coffee prices.
- Disposable income: Unlike other soft commodities like wheat, coffee is not a necessity. As a result, economic downturns and a squeeze in household incomes may lead to a fall in coffee demand.
- Consumer trends: The price of coffee can be affected by consumer trends and perceived health advantages (or disadvantages). If coffee consumption rises to the same level as tea consumption in countries like China, demand, and in turn prices, may rise.
- Price of the US dollar: As coffee is primarily priced in dollars, fluctuations in the strength of the US dollar will impact the price of coffee. As the dollar rises, coffee prices tend to fall, and vice versa.
Why Trade Coffee?
Like oil, gold and silver, coffee has many characteristics that make it an attractive commodity for traders:
- Trading vehicles: There are multiple investment vehicles that can be used to trade coffee including futures, options, CFDs and ETFs. Each caters to different trading strategies and investment goals, for example, CFDs are popular with short-term traders and ETFs with long-term investors.
- Volatility: Coffee is a volatile commodity. Its price is influenced by a number of factors which can make it difficult to accurately forecast prices, including climate and geopolitics. However, this volatility provides opportunities for traders with a healthy risk appetite.
- Volume: Coffee is a staple part of the food and beverage industry and the most consumed drink globally. As a result, coffee is traded in huge volumes, meaning traders can fill orders with low fees.
How To Compare Coffee Brokers
Key comparison points when choosing between coffee trading brokers, platforms and apps include:
- Fees: Look for tight spreads, low commissions and overnight charges, plus no inactivity fees. Pepperstone, for instance, offers coffee CFDs with an average spread of 0.4 pips, 1:10 leverage for UK traders, and a contract size per lot of 10,000 lbs.
- Security: The top brokers with coffee trading in the UK hold a license with the Financial Conduct Authority (FCA). Also check for negative balance protection and a secure platform and trading app.
- Usability: Active coffee trading strategies require a stable and reliable platform. Check for fast execution speeds, no slippage and mobile compatibility. MetaTrader 4 and/or MetaTrader 5 are offered by most leading coffee brokers.
- Customer support: Beginners, in particular, will prefer a brokerage with good customer support via live chat, telephone, email or online query form. Both XTB and CMC Markets, for instance, offer 24/5 customer support.
- Added features: The best coffee brokers offer analyst insights and data into coffee trends. Their economic calendar may also highlight relevant announcements and reports, for example, output projections in key producing countries like Brazil and Vietnam.
- Opening hours: Coffee trading times vary between exchanges and brokers but typically run Monday to Friday, 09:15 to 18:29 (GMT).
Bottom Line On Coffee Trading
Coffee continues to be a popular commodity for online trading. It is a highly liquid and volatile asset, presenting opportunities for the right trader. Some of the most popular coffee trading vehicles available today include CFDs, futures, options and ETFs. Get started by signing up with one of the best coffee brokers.
FAQ
What Factors Influence The Price Of Coffee?
Factors that influence the price of coffee include the weather, for example, frosts that destroy coffee plants in key producing countries like Brazil, Vietnam and Columbia. Other factors that can impact coffee prices are rising oil prices which can increase transportation costs, the value of the US dollar, and changes in consumer trends and the level of disposable income in large consumption countries, such as the US.
Is Coffee Trading Profitable?
Coffee is a relatively volatile commodity, experiencing significant price action in recent years. This means potential returns for successful traders. However, unpredictable factors like the weather and geopolitical events can make it difficult to forecast coffee prices. Ultimately, make sure you have a risk management system and only invest what you can afford to lose.
How Can I Learn How To Trade Coffee?
See our guide to coffee trading online to get started. Our team unpack different trading methods, from futures and options to CFDs and ETFs. The top coffee brokers also offer strategy tutorials and insights into the coffee market and current trends, including CMC Markets.
Which Is The Top Coffee Broker In The UK?
Leading coffee trading brokers in the UK include Pepperstone, XTB and CMC Markets. These brokerages offer stable trading platforms and apps, leveraged coffee instruments, tight spreads, plus oversight from the Financial Conduct Authority. Head to our table of coffee brokers for more options.