Robusta Coffee Futures, Gain Coffee Market Exposure
Gain exposure to coffee representing around a third of global exports by trading Robusta coffee futures either on NYSE Euronext or the ICE Futures US.
While Brazil, the largest coffee exporter in the world, does export Robusta, most of this coffee variety is grown in South East Asian countries like Vietnam and Indonesia and parts of Africa.
Unlike the Arabica variety, grown at high altitudes and subject to freezing, Robusta is a hardier bean and is found growing between sea level and altitudes of up to around 2,000 ft.
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There are two contracts for Robusta coffee futures traded on the Liffe London market, which is part of the NYSE Euronext group, and where traders can use the LIFFE CONNECT trading platform.
Robusta Futures (no. 406) Symbol: D Trading Unit: 5 tonnes Trading Hours: 0800 – 1730 London time
Minimum price movement: $1 per tonne ($5 per contract)
The price of Robusta coffee futures ( no.406) in US$ per tonne is based on the cost of delivery to a LIFFE nominated warehouse in London, Felixstowe, Amsterdam, Antwerp, Rotterdam, Trieste, Hamburg, Bremen, Le Havre, New York and New Orleans.
Countries from which Robusta coffee beans are delivered and for which futures are traded on the LIFFE CONNECT platform include Angola, Brazil, Cote D’Ivoire, Democratic Republic of Congo, Ecuador, Ghana, Guinea, Indonesia, Nigeria, Sierra Leone, Togo, Tanzania, Trinidad, Uganda and Vietnam. Robusta Futures (No. 409)Symbol: RCTrading Unit: 10 tonnesTrading Hours: 0800 – 1730 London time The country of origin of the Robusta coffee beans is not specifically defined as with the No.406 futures contract, the only condition being that the Robusta coffee is available for export. Delivery months for this contract are January, March, July, September and November, with November 2008 being the first delivery month for this 409 contract.
There is a minimum price movement of $1 per tonne, or $10 per contract, while the last trading day is the last business day of the delivery month at 1230. If you are trading other commodities on the ICE Futures US, you will know that Robusta Coffee futures can also be traded on this platform.
ICE Futures US Robusta Coffee
This contract is settled by physical delivery at a number of defined ports including New York, New Orleans, Miami, Houston in the US and Antwerp, Barcelona, Bremen, Hamburg and Trieste in Europe.
Contract symbol: RC Contract size: 37,500 pounds There is a minimum price of 0.05 cents per pound (= $18.75 per contract) and the trading months are March, May, July, September and December. As with Arabica coffee beans, the ICE certifies Robusta coffee beans by testing and grading them with reference to benchmark coffees called “basis”. So, for example, a better coffee will be at a premium, while inferior grades will be at a discount. The exchange also requires cup tasting to evaluate flavours.
The last trading day is 8 business days before the last business day of the delivery month.
So whether you choose to use the LIFFE CONNECT trading platform or the ICE Futures US route, you will be able to get exposure to the price action of Robusta coffee futures.
Using your commodity trading plan and guidance from your commodity trading broker, you can look forward to opportunities of making profitable trades.
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