Focus on coffee commodity trading There is potential for coffee commodity trading observers to make some great profitable trades, after a un food agency report pinpointed the cheap michael kors need for global food production to increase by over 70% by 2050.Over the years, along with crude oil, coffee has been a major traded commodity, so the markets will follow closely any material change in coffee futures prices, especially when crop yields can be affected by dramatic weather changes.An important factor for this popular commodity is good rainfall, so it's not surprising that most coffee beans grow between the tropic of cancer and the tropic of capricorn. Key to successful crop yields is having an ideal temperature range of between 17 and 23 centigrade as well as steady climate and helpful soil conditions.Damage is being caused to coffee farmers in developed countries, according to a recent report by cafedirect.Because of the rise in temperatures coffee growers have to move to higher altitudes.And the effect of rising temperatures is more disease caused by pests.As beans can only grow properly in a small temperature range, climate change is a major challenge to coffee growers. For those who follow coffee commodity trading the two main varieties of economic importance are arabica and Robusta, both highly traded futures on global commodity exchanges.While the largest global coffee producer is brazil with around 34 million(29% global output)60kg bags of coffee in 2007/8, and mainly Arabica, the US is the biggest world consumer and importer of coffee.In second place with a 15% world share at 17.50 m bags(Robusta)Is vietnam, while columbia with a 11% share was third producing arabica, and with production of 7.0 m bags in 2007/8 Indonesia was fourth largest producer. Making up about 70% of green coffee bean production, arabica thrives at altitudes of over 4, 000 ft in warm, humid climates, which along with the right soil conditions gives the bean its characteristic aromatic flavour.Most arabica grows in the high altitudes of countries like columbia, brazil, peru, ecuador and venezuela.The santos grade of arabica in brazil is considered one of the best, with beans picked within the first 4 years of the coffee tree's life.While robusta beans, which are a lower grade and grown mainly in south east asia, are picked after 23 years, usually with arabica there is a longer lead time of 45 years. Drought can cause crop yields to collapse, and so lead to coffee futures prices rising.If rainfall is too high this can also lead to lower crop yields, with similar impact on prices.Freezing can impact a crop for the current year and the following year.This is usually a problem for arabica varieties in the higher altitudes in latin america.Statistics show that in recent years serious freezing has happened in one in every six years in winter(June to august)Months in the southern hemisphere. The appearance of white blossom on coffee trees points to the first stages in coffee bean growth, after which over a period of between two weeks to 69 months green cherries appear, eventually becoming red and then black cherries.Each cheap michael kors bags uk cherry holds two coffee beans.Most coffee production uses the"Dry"Method where cherries are stripped off the tree.Then the green beans are dried and graded, ready for shipping and roasting.On average about 2, 000 cherries(4, 000 beans)Yield a pound of coffee. Before you take some profitable trades as you embark on your Coffee Commodity trading aCtivities, make sure you seleCt a broker with an user friendly eleCtroniC trading platform.On iCe futures us the arabiCa benChmark is the Coffee"C"Futures contract, and it is also possible to trade a futures contract for the robusta bean variety through this global exchange.If you don't want to trade futures but still want exposure to soft commodities, you could use an agricultural etf and track a soft commodity index.With these various derivatives and investment vehicles at their disposal, traders can gain exposure to these exotic coffee commodity trading markets.Learn more about how you could ichaelorhandagotlet gain from coffee commodity trading ideas here.
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