AGRO TRADING
What is coffee trading?
Caerus Prime, we understand the global significance of commodities like coffee. As one of the most traded commodities worldwide, coffee is cultivated in over 50 countries, with Brazil leading production at 39% of the global supply. Other top producers, such as Vietnam, Colombia, Indonesia, and Ethiopia, contribute significantly to the coffee market.
Our expertise in commodity markets allows us to help investors navigate the complex dynamics of these globally impactful sectors, offering insights into emerging trends and opportunities in regions with tropical and subtropical climates.
The largest importers of coffee are the EU, the US, Japan, Russia and Canada. The global consumption of the bean had grown around 2% annually before the pandemic, when covid-related disruption affected its trade. It has since started to resume a steady growth rate.
Coffee Trading History
The coffee commodity trading market has a long history. Coffee was traded and consumed in the Middle East as far back as the 15th century. By the 17th century, coffee houses were popular among merchants in Europe as places to meet and discuss trade.
London’s Lloyd’s Coffee House opened in 1686, providing shipping news for sailors, merchants and shipowners, and led to the establishment of the Lloyd’s of London insurance market, the Lloyd’s Register professional maritime services company and several other shipping and insurance businesses.
The growth in demand for coffee in Europe led to coffee plantations being established in colonies around the world. Today, close to 170 million bags of coffee are consumed globally every year, according to the International Coffee Organisation (ICO).
Over the centuries, coffee as a traded commodity has witnessed many ups and downs. In recent decades its price has fluctuated from as high as $3.35 to as low as $0.43 a pound.
The modern history of the coffee trade and its pricing can be divided into two periods: the regulated period under the International Coffee Agreements (ICA) from 1963 to 1989; and the subsequent free market period, which followed the breakdown of ICA negotiations in 1989.
The 1989 Agreement collapse was disastrous for many on the commodity’s supply chain. The ICO’s composite indicator price for coffee fell by almost 75% in five years, from $1.34 a pound in 1989 to an average of $0.77 in 1995.
During the regulated period, the average price differential between Arabica and Robusta was around $0.149 a pound. An annual high of $0.475 was recorded in 1986, following an Arabica supply shortage after a 1985 Brazilian drought.
At the beginning of the free market period, however, the difference in price between the two coffee types widened.
Since 1990, the annual average differential has increased to $0.523 a pound, with the gap reaching its record high level of more than $1.60 a pound in 2011.
As such an important dietary staple, this agricultural commodity has spawned a large economy of its own.
In the US alone, the coffee market was valued at $25b in 2021 and projected to grow at a compound annual rate of 3.8% over the next five years. The commodity market therefore plays an important role in the global economy.
Types of Coffee
There are two main varieties of coffee beans traded on the commodity markets: Arabica and Robusta.
Arabica coffee beans are more oval and flat in shape, and offer a sweeter, lighter and smoother taste. They account for around 70% of all the coffee on the market.
Robusta beans are slightly smaller and have a stronger and more bitter flavour stemming from their much higher caffeine content. They account for 30% of total coffee production.
Arabica beans may often be considered higher quality, and you are likely drinking them when you buy a cup of Starbucks (SBUX) coffee. But it is Robusta that usually trades at a higher price.
This is due to demand from large, global corporations, including the Swiss multinational company Nestlé (NESN), which uses Robusta beans for its Nescafe product line. The high volume of purchases means that any changes in demand from those large businesses can affect the prices of Robusta coffee dramatically.
Trend traders tend to prefer Arabica as pricing is more stable, while the Robusta market offers more price volatility for short-term traders.
Both Arabica and Robusta are traded using options and futures contracts on the Intercontinental Exchange (ICE). Arabica coffee is also traded in futures contracts under the ticker symbol KT on the New York Mercantile Exchange (NYMEX), which is operated by the Chicago Mercantile Exchange (CME) Group.
What moves coffee prices?
There are several major factors that could affect coffee prices. If you are going to trade coffee it is important to understand the dynamics that drive prices.
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Direct Investment in Coffee Farms:
Investors can directly invest in coffee farms located in renowned coffee-growing regions around the world. The program ensures that the farms adhere to sustainable farming practices, including organic cultivation, fair trade principles, and environmental conservation efforts.
Risk Mitigation Strategies:
To minimize risks, the program incorporates various risk management strategies such as:
In the lush landscapes of Panama, Geisha coffee shines as a rare jewel in the world of coffee. Loved for its exceptional flavor, scarcity, and careful cultivation, Geisha coffee has won the hearts of coffee enthusiasts globally. In this exploration, we uncover the magic of Geisha coffee, its investment potential, and why Caerus Prime offers an exceptional opportunity to be a part of this world.
The Charm of Geisha Coffee:
Geisha coffee, named after its birthplace in Ethiopia, goes beyond ordinary coffee with its unique taste. Known for its delicate floral aroma, lively acidity, and smooth texture, Geisha coffee offers an unparalleled sensory experience. Its scarcity arises from a blend of factors like specific soil, altitude, and precise farming methods that come together to create a truly exceptional cup of coffee.
Investing with Caerus Prime:
Caerus Prime emerges as a guiding light for those intrigued by the world of Geisha coffee. As a forward-thinking investment firm focused on sustainable agriculture, Caerus Prime offers a unique chance to invest directly in Geisha coffee farms. Their approach blends traditional farming wisdom with cutting-edge technologies, ensuring top-notch quality and sustainability.
Moreover, investing with Caerus Prime aligns with the rising demand for ethically sourced and sustainable products. Geisha coffee, celebrated for its artisanal craftsmanship and environmental mindfulness, resonates with conscientious consumers. By investing in Geisha coffee farms through Caerus Prime, investors not only join a lucrative venture but also contribute to biodiversity preservation and community empowerment.
Unveiling Micro Lot Coffees: A Rewarding Investment Journey with Caerus Prime
In the world of specialty coffee, micro-lot coffees shine as treasures, renowned for their exceptional quality and unique flavor profiles. As we embark on an exploration of micro-lot coffees, we discover why investing with Caerus Prime is an enticing opportunity. From supporting coffee farms directly to fostering sustainable growth, Caerus Prime offers investors a pathway to engage in this exciting market while positively impacting coffee-producing communities.
Understanding Micro Lot Coffees
Micro lot coffees epitomize the dedication and craftsmanship of coffee farmers who carefully nurture small plots of land to yield outstanding beans. Unlike conventional coffee production, where beans from various farms are blended, micro lot coffees originate from specific areas within a farm, showcasing the distinct terroir and varietals cultivated there. This meticulous approach grants greater control over growing conditions, resulting in coffees with nuanced flavors and aromas.
Investing with Caerus Prime:
Caerus Prime emerges as a trusted ally for investors seeking entry into the world of micro lot coffees. Committed to sustainable agriculture and ethical sourcing, Caerus Prime provides a unique opportunity to invest directly in micro lot coffee farms. Their innovative approach blends traditional farming methods with modern technology, ensuring top-notch quality and environmental responsibility.
Espresso Blends: Investing with Caerus Prime
Espresso blends are special coffee mixes known for their rich taste and popularity among coffee lovers worldwide. In this discussion, we’ll explore why investing with Caerus Prime in espresso blends is a smart choice. From supporting coffee farms to ensuring sustainable growth, Caerus Prime offers a way to be part of this thriving market while making a positive impact in coffee-producing communities.
Espresso Blends
Espresso blends are carefully crafted combinations of coffee beans chosen and roasted to create a balanced and flavorful shot of espresso. Unlike single-origin coffees that highlight the distinct flavors of beans from one region, espresso blends aim for a well-rounded taste that appeals to many. These blends often include beans from different places, each adding its own unique flavor to the final cup.
Investing with Caerus Prime
Caerus Prime is a trusted partner for investors interested in espresso blends. With a focus on sustainable farming and ethical practices, Caerus Prime offers an opportunity to invest directly in coffee farms that produce beans for espresso blends. Their approach combines traditional farming methods with modern technology, ensuring top-quality coffee while protecting the environment.
Investing with Caerus Prime has several benefits. Firstly, it gives investors access to coffee farms involved in making espresso blends, allowing them to see the farming process up close and build connections with coffee producers. This transparency helps investors make informed decisions about their investments.
How Coffee's are Traded on Caerus Prime
At Caerus Prime, the coffee operations focus on specialty coffee investments that offer a unique value proposition to investors. Here’s a breakdown of how the company operates and generates returns for its investors:
Specialty Coffee Sourcing
Caerus Prime sources high-quality, specialty-grade coffee beans, including: • Micro lot coffee: Limited production, high-demand coffee sourced from specific farms known for producing unique flavor profiles. • Geisha coffee: A rare and expensive variety with distinctive floral and fruit notes, often sold at premium prices. • Espresso blend: Crafted blends of coffee designed for quality espresso, catering to consumer and café demand.
Direct Relationships with Farmers
Caerus Prime establishes direct relationships with coffee producers and farmers, ensuring the company gets access to the best beans at competitive prices. By cutting out intermediaries, they can offer a higher share of profits back to the producers while still maintaining attractive margins.
Quality Control & Processing
After sourcing, the beans go through rigorous quality control and processing to ensure consistency and superior taste. This attention to detail helps the coffee fetch higher prices in the market, making it an appealing product for high-end cafés, restaurants, and consumers.
Strategic Sales Channels
Caerus Prime targets niche markets that demand and are willing to pay a premium for high-quality coffee. This includes: • Direct-to-consumer sales through online platforms and subscription services. • B2B sales to premium coffee shops and specialty cafés. • Export to international markets that highly value specialty coffee varieties.
Investment Returns
Money is made for the investor through: • Profit margins on coffee sales: Specialty coffees, particularly micro lot and Geisha, can command prices far higher than regular coffee, leading to significant profit margins. • Value appreciation of rare coffee varieties: Geisha and similar high-end beans are often sold at auctions, where prices can increase dramatically based on demand. • Growth of coffee markets: The global demand for specialty coffee continues to rise, offering opportunities for expansion and higher returns over time.
Risk Mitigation
Caerus Prime mitigates risks for investors by diversifying coffee offerings (e.g., micro lots, Geisha, and espresso blends) and maintaining flexible relationships with both small and large coffee producers. This helps balance potential fluctuations in production or market conditions. investors in Caerus Prime benefit from the growing specialty coffee market, premium pricing, and the company’s focus on efficient operations, quality sourcing, and strategic market positioning.