What Are Coffee Prices Based On?
Coffee beans are traded on future and commodity exchanges. The two most important exchanges in regards to coffee beans are New York and London. As with most other items, coffee prices tend to fluctuate based upon supply and demand principles. When there are more sellers than buyers, coffee prices drop. When there are more buyers than sellers, coffee prices rise. Two types of coffee beans are traded: Arabica and Robusta. Generally, Robusta beans are sold at 70% of the price of Arabica beans; making them more cost-effective for major coffee companies. While there used to be a large discrepancy between the price of Arabica and Robusta beans, this is no longer the case. Since the world’s largest coffee buyers have recently begun to purchase mostly Robusta beans, the demand for Arabica beans has been reduced. Therefore, the price difference between the two types of beans has also been reduced. While this reduction in price may be helpful for people who purchase coffee beans, the recent dema
