Coffee ETF

This is the coffee bean ETF. The price of coffee is determined through the market force of supply and demand. The demand-side is very stable and almost without any surprises.

That cannot be said about the supply-side, price fluctuations in coffee are almost 100% supply-side dominated. As you may know, coffee beans come from coffee plants and just like with other crops they experience good and bad years.

Too dry, too wet, diseases, bugs, you name it, many things have an influence on a good or bad harvest. Adding to the complexity is that many coffee plantations are located in unstable countries where domestic wars may also have an effect.

All these market variables may sometimes cause this coffee ETF to double or triple. How to deal with such uncertainty? From historic data we can learn that if the price of coffee has been very low for some years there will always happen something that will cause prices to skyrocket.

Speculators enter the market which reinforces the effect. So building slowly a position at periods of low prices may be a very wise strategy even if it may take a while to benefit from the occasional price explosion of this coffee ETF.

ETFS Coffee ETF

This ETF Securities Coffee ETF is tracking the Bloomberg Coffee Subindex.

All my transactions older than 1 month FOR FREE: Click here