Trading Coffee and Gas

Trade CoffeeCoffee and gas are two of the more common commodities traded by investors around the world. Coffee is traded on most futures and commodity exchanges while future natural gas contracts are traded on the New York Mercantile Exchange.

The movements of coffee prices are defined by supply and demand as are other products and commodities. If there are more sellers than buyers, the price of coffee falls; when there are more buyers than sellers, the price of coffee rises. Coffee has become a highly valued substance, especially in the West where the biggest number of consumers resides. Interestingly Finland is the athe biggest sinlge consumer of coffee on a yearly basis.

The United States, Germany, and Italy account for the majority of global coffee imports, but when consumption is measured by consumption per head, Finland, Aruba, and Iceland lead the rest of the world. For emerging markets such as Brazil, Colombia, and Vietnam, coffee is the most important source of revenue, with coffee exports often totaling more than 80% of foreign earnings.

Arabica and Robusta are two types of coffee that are traded internationally. Robusta is typically sold for 70% of the price of Arabica and, therefore, is frequently preferred by the large multinational coffee roasting companies.

Coffee futures are traded on the New York Mercantile Exchange under the KC ticker symbol in U.S. dollars per pound.

The main determinants of the price of natural gas depend on raw fuel costs, which account for about 60% of final expenditures, while other expenses such as transmission and distribution make up the rest of the costSimilar to other commodities, raw fuel price is determined by the market and influenced by a mixture of demand and current and future supply of natural gas. Natural gas is exceptional in that it is demanding to transport and to store, thus making it vulnerable to sudden increases in demand. Natural gas is a significant energy source for heating and electricity supplies and is also used as fuel for cars and other vehicles.

Take a look at our top 10 binary options brokers to find out which brokerage offer coffee and gas as tradable assets.


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