Coffee ranks as the second most popularly traded commodity on the market. Its trading popularity, however, is also matched with volatility.
This has come to the fore again, as coffee futures have dropped to their lowest point since 2006. Futures are options to sell or buy assets at a later date at an agreed price, and now Arabica coffee’s futures for May 2019 have fallen 2.6 percent. This a flow on effect of coffee prices in New York dropping about 20 percent in the last year because of a global oversupply in coffee beans.
This is significant because New York is the biggest coffee city in the US, with over 3,389 coffee shops. However, Olan Internation Ltd, the world’s second-largest coffee supplier has said futures could rally once supplies decrease from bad weather.