Coffee futures prices—the chief indicator of coffee’s price—are trending up and threatening to crack their highest point, set in 1977, as measured by the price of Arabica beans, which are the benchmark for coffee futures contracts that trade on the Intercontinental Exchange (ICE). After Arabica beans peaked around $3.30 per pound in late November, they are still trading around $3.00, prompting many investors to wonder just how they can participate in the rally. In fact, the Arabica beans uptrend began in October of last year. And so far this year, Arabica futures price has climbed nearly 77%.
Now, the good news is that there are multiple ways to play the rally, such as using popular online brokers, investment apps, and futures trading platforms—such as Ninja Trader—to buy coffee-related exchange-traded commodities (ETCs), futures. You can also use many standalone and broker-based screeners to look for stocks that fit with traits you like.
The run-up in coffee prices stems largely from concerns about U.S. dollar weakness, adverse weather hurting output in top producer Brazil, and a delayed harvest in big producer Vietnam.
There are several ways you can try to profit from coffee’s price increase. You can do it by using top online brokerage and investment apps to invest in the stocks of companies that sell coffee to consumers on a retail or wholesale basis. You can also buy and sell stock in companies that run coffee shops or that deal in coffee merchandise such as home coffee makers.
If you don’t mind risk and are willing to take it on for the sake of potentially boosting your returns, you can pursue the third avenue of coffee investing—investing in coffee futures.
To gain more direct exposure to the underlying commodity itself, you can invest in coffee-related ETCs, which are exchange-traded products that provide an alternative to trading futures by giving investors the opportunity to invest in an individual or a basket of commodities.
As with any investment decision, you should choose the investment method that meets your long-term needs and goals.
| Platform | Account Minimum | Available Futures Trading |
Access to International Exchanges |
| Interactive Brokers | $0 | Yes | Yes |
| Ninja Trader | $400 | Yes | No |
| E*TRADE | $0 | Yes | No |
| TradeStation | $0 | Yes | Not Disclosed |
| Charles Schwab | $0 | Yes | Yes |
ETFs were easily available in the U.S. until mid-2023 when the last of them ceased to be offered to U.S. investors. U.S. investors can still access their debt-based relatives, exchange-traded commodities (ETCs), which are provided by the London Stock Exchange and sold internationally.
ETCs typically hold commodities in the form of futures contracts. But U.S. investors only have access to these instruments through a limited number of U.S. brokerages that offer access to a large number of international securities, such as Interactive Brokers.
Here are the only five coffee-themed ETFs with “coffee” in their names in the Morningstar Direct database:
Coffee futures are bets on the future price of coffee. That price depends on supply and demand for coffee. For producers and roasters, futures are tools for managing financial risk, for one thing. For instance, coffee producers can sell futures to lock in a fixed price.
Each contract is for 37,500 pounds of coffee. Coffee futures are traded on the Intercontinental Exchange (ICE), a commodity exchange. To trade coffee futures, you need a brokerage account that gives you access to ICE contracts.
The Coffee C contract—whose trading symbol is KC—is the world benchmark for Arabica coffee, according to ICE. Each coffee contract refers to a set amount of Arabica beans to be delivered at a future date at a preset price.
Investing in coffee stocks can be complex, since the industry has many layers. It consists of companies that operate in either the consumer discretionary and consumer staples sectors, as producers, distributors, processors, wholesalers, and retailers.
Here are four stocks whose stocks have been trending higher along with the rise in coffee futures prices in recent weeks:
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