Coffee Prices Are Near Record Highs—Here's How to Invest Right Now

Investopedia12-10

KEY TAKEAWAYS Coffee futures have climbed nearly 77% in 2024 and are trading just below their all-time high of $3.39 set in 1977. The current uptrend in coffee futures pries began in October 2023. To...

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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, ","collect":0,"end_time":0,"defaultTopTitle":"investopedia.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0417517546.SGD":"Allianz US Equity Cl AT Acc SGD","LU0823411888.USD":"法巴消费创新基金 Cap","BK4212":"包装食品与肉类","LU0256863902.USD":"ALLIANZ US EQUITY \"AT\" (USD) ACC","SBUX":"星巴克","LU2106854487.HKD":"ALLIANZ THEMATICA \"AMG\" (HKD) INC","GB00BDT5M118.USD":"天利环球扩展Alpha基金A Acc","ICE":"洲际交易所","LSF.AU":"L1 LONG SHORT FUND LTD","LU0390134368.USD":"FRANKLIN GLOBAL GROWTH \"A\" (USD) ACC","BK4585":"ETF&股票定投概念","LU1153585028.USD":"BGF GLOBAL LONG-HORIZON EQUITY  \"A4\" (USD) INC","LU0130517989.USD":"HARRIS ASSOCIATES US VALUE EQUITY \"R\" INC","LU2023250843.SGD":"Allianz Thematica Cl AT Acc H2-SGD","LU2023250504.SGD":"Allianz Thematica Cl AMg DIS H2-SGD","BROS":"Dutch Bros Inc.","SG9999004303.SGD":"Nikko AM Shenton Global Opportunities SGD","LU2237957902.USD":"NIKKO AM GLOBAL EQUITY \"F\" (USD) ACC","BK4535":"淡马锡持仓","LSF":"Laird Superfood, Inc.","LU0661504455.SGD":"Blackrock Global Equity Income A5 SGD-H","LU2237957811.SGD":"NIKKO AM GLOBAL EQUITY \"F\" (SGD) ACC","BK7016":"应用软件","IE00B3T34201.USD":"BNY MELLON GLOBAL EQUITY INCOME \"B\" (USD) INC","LU0011850046.USD":"贝莱德全球长线股票 A2 USD","BK4588":"碎股","LU0130102774.USD":"Natixis Harris Associates US Equity RA USD","LU0154245756.USD":"BNP PARIBAS US MID CAP \"C\" (USD) ACC","IE00BQXX3D17.EUR":"GUINNESS GLOBAL INNOVATORS \"C\" (EUR) ACC","JVA":"Coffee Holding Co","LU0949170772.SGD":"Blackrock Global Equity Income A6 SGD-H","ICE.AU":"ICETANA LTD","IE00BQXX3C00.GBP":"GUINNESS GLOBAL INNOVATORS \"C\" (GBP) ACC","LU0154245673.USD":"BNP PARIBAS US MID CAP \"C\" (USD) INC","LU0648001328.SGD":"Natixis Harris Associates US Equity RA SGD","SGXZ23171101.USD":"NIKKO AM SHENTON GLOBAL OPPORTUNITIES (USD) ACC","IE00BQXX3F31.USD":"GUINNESS GLOBAL INNOVATORS \"C\" (USD) ACC","LU0477156953.USD":"HARRIS ASSOCIATES US VALUE EQUITY \"RE\" (USD) ACC","LU0738911758.USD":"Blackrock Global Equity Income A6 USD","LU0154236417.USD":"BGF US FLEXIBLE EQUITY \"A2\" ACC","BK4504":"桥水持仓","LU0882574139.USD":"富达环球消费行业基金A ACC","BK4209":"餐馆","LU0256863811.USD":"ALLIANZ US EQUITY \"A\" INC","LU1201861249.SGD":"Natixis Harris Associates US Equity PA SGD-H","BK4112":"金融交易所和数据","LU0980610538.SGD":"Natixis Harris Associates US Equity RA SGD-H","LU1917777945.USD":"安联专题基金Cl AT Acc","LU1974910355.USD":"Allianz Thematica Cl AMg DIS USD"},"translate_title":"咖啡价格接近历史新高——以下是立即投资的方法","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"BROS":1,"JVA":1,"LSF":1,"LSF.AU":1,"ICE.AU":1,"ICE":1,"SBUX":1},"content_text":"KEY TAKEAWAYS\n\nCoffee futures have climbed nearly 77% in 2024 and are trading just below their all-time high of $3.39 set in 1977.\nThe current uptrend in coffee futures pries began in October 2023.\nTo take advantage of the coffee rally, you may want to buy certain stocks—something you can do in any of the best investment apps—and you also might want to buy futures or exchange-traded commodities, which can also be accessed using some of the best brokerage accounts.\n\n 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%.\n\n\n 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.\n\n\n  Here’s How to Invest in Coffee Right Now  \n 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. \n\n\n 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.\n\n\n 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.\n\n\n 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.\n\n\n As with any investment decision, you should choose the investment method that meets your long-term needs and goals.\n\n\n  Compare Investopedia’s Best Trading Platforms for Investing in Coffee  \n \n\n\n\n\n\n\n\nPlatform\nAccount Minimum\nAvailableFutures Trading \nAccess to International Exchanges\n\n\nInteractive Brokers\n$0\nYes\nYes\n\n\nNinja Trader\n$400\nYes\nNo\n\n\nE*TRADE\n$0\nYes\nNo\n\n\nTradeStation\n$0\nYes\nNot Disclosed\n\n\nCharles Schwab\n$0\nYes\nYes\n\n\n\n\n  Coffee ETFs and ETCs  \n 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. \n\n\n 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.\n\n\n Here are the only five coffee-themed ETFs with “coffee” in their names in the Morningstar Direct database:\n\n\n  SG ETC Coffee Future  \n Ticker: 42G1Sold in: Austria, Germany, Denmark, Spain, Finland, France, Ireland, Italy, Luxembourg, Netherlands, Norway, and Sweden\n\n\n  WisdomTree Coffee - EUR Daily Hedged ETC  \n Ticker: ECOFSold in: Austria, Germany, Denmark, Spain, Finland, France, Ireland, Italy, Luxembourg, Netherlands, Norway, and Sweden\n\n\n  Wisdom Tree Coffee ETC  \n Ticker: COFFSold in: Austria, Belgium, Germany, Denmark, Spain, Finland, France, United Kingdom, Ireland, Italy, Luxembourg, Netherlands, Norway, and;Sweden\n\n\n  WisdomTree Coffee 2x Daily Leveraged ETC  \n Ticker: LCFESold in: Austria, Belgium, Germany, Denmark, Spain, Finland, France, United Kingdom, Ireland, Italy, Luxembourg, Netherlands, Norway, and;Sweden\n\n\n  WisdomTree Coffee 3x Daily Leveraged ETC  \n Ticker: 3CFLSold in: Austria, Belgium, Germany, Denmark, Spain, Finland, France, United Kingdom, Ireland, Italy, Luxembourg, Netherlands, Norway, and Sweden\n\n\n  Coffee Futures  \n 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.\n\n\n 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.\n\n\n 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.\n\n\n  Coffee Stocks  \n 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. \n\n\n Here are four stocks whose stocks have been trending higher along with the rise in coffee futures prices in recent weeks:\n\n\n  Dutch Bros Inc. (BROS)  \n Share price performance: Up more than 85% since August 12, 2024Outlook: Michael Kodari, CEO of KOSEC Securities in Sydney, Australia, said, “Dutch Bros has benefited from secular liquidity rotation into mid-caps, driving its recent rally. Its ability to scale through franchising provides a cushion against rising coffee commodity costs, but the impact on margins may still surface in future earnings reports. For now, the market perceives it as free of margin pressures, which supports the current uptrend.”\n\n\n  Laird Superfood Inc. (LSF)  \n Share price performance: up 123% since February 23, 2024Outlook: Kodari said, “Laird Superfood's sharp rise appears more tied to broader small-cap inflows than coffee prices directly. While the company markets coffee-adjacent products, it operates in the broader health food space, which insulates it somewhat from rising commodity costs. Its growth trajectory hinges on demand for premium wellness products rather than coffee-specific tailwinds.”\n\n\n  Coffee Holding Co., Inc. (JVA)  \n Share price performance: up 220% since June 10, 2024Outlook: Kodari said, “JVA’s 220% surge is likely driven by speculative interest and the belief that, as a wholesaler, it can manage rising coffee costs more effectively than retailers. However, this is a risky proposition. Wholesalers face slim margins, and sustained high coffee prices could compress profitability over time. The market is optimistic now, but execution risks remain.”\n\n\n  Starbucks Corp. (SBUX)  \n Share price performance: up 37% since July 10, 2024Outlook: “Starbucks is uniquely positioned to weather rising coffee costs due to its substantial pricing power and deeply loyal customer base, which allows it to pass through nominal price increases without significant attrition. For a company like Starbucks, raising prices by even a few percentage points [have] minimal impact on consumer behavior but [generate] substantial margin preservation at scale. Unlike smaller competitors who face customer pushback or attrition from price sensitivity, Starbucks leverages its premium brand equity and global scale to maintain profitability.” Kodari said.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2490082691"}