How to Invest in Coffee for Beginners in 2025

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eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.

Investing in Coffee can be a great way to diversify your investment portfolio and protect your wealth from inflation. There are several different ways to trade or invest in Coffee, from trading at current prices to investing in stocks or ETFs that track the Coffee price.

If you’re new to Coffee investing like this, don’t worry. It’s more straightforward than it might seem. Just like with other investments, the key is to understand the basics of each market, understand your own goals, and take things step by step.

This guide explains how Coffee markets work and outlines the different ways you can invest in Coffee. Our step-by-step walkthrough takes you through the process so that by the end, you’ll feel confident buying and selling Coffee as part of your investment strategy.

Can I invest in Coffee?

Yes, investing in Coffee is straightforward and available to anyone using an online trading platform. Investing in Coffee and trading Coffee represent different approaches with varying time horizons. 

Coffee investing involves a long-term perspective with the main aim of growing your wealth and diversification. That is, adding different types of investment to your portfolio to spread your risk around 1 . Coffee trading, on the other hand, focuses on taking advantage of short-term price movements for quick gains. 

You can invest or trade Coffee through many different avenues, including physical ownership, Coffee exchange traded funds, or via derivatives trading. To decide on the best approach, you need to consider your goals and time horizon before aligning your strategy with your specific objectives. 

Where can I trade Coffee online?

To invest in Coffee you need to register with an top online commodities broker. Our experts regularly rate and review these platforms. Here are the top Coffee trading platforms where you live, ranked according to a range of factors including cost, security, and the range of Coffee markets.

4.6

eToro

Min. Deposit $100

Fees 1%

No. assets 3600+

Demo account Yes

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eToro review

eToro offers real assets only, no CFD products. eToro securities trading offered by eToro USA Securities, Inc. (‘the BD”), member of FINRA and SIPC. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Invezz.com is not an affiliate and may be compensated if you access certain products or services offered by the BD.

4.5

Plus500

Min. Deposit $100

Fees From 2%

No. assets 2800+

Demo account Yes

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Plus500 review

This information is NOT relevant to EU residents who are to be serviced by EU subsidiaries of the Plus500 Group, such as Plus500CY Ltd, authorized by CySEC (Reg. 250/14). Different regulatory requirements apply in Europe, such as leverage limitations and bonus restrictions.

How to trade & invest in coffee

Min. Deposit n/a

Fees –

No. assets n/a

Demo account –

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What is Coffee investing?

There are different ways to invest in Coffee, from purchasing the physical commodities themselves, to buying shares in companies that produce, transport, or use Coffee in some way, to trading Coffee futures and options contracts.

What all these have in common is that when you invest in Coffee, you are essentially betting on the future price movement of these goods.

Commodity investing can offer several benefits, including diversification of your investment portfolio and a potential hedge against inflation. Because commodity prices can move independently of stock and bond markets, they can help reduce overall investment risk.

Although Coffee prices can fluctuate in the short term, investors generally focus on the potential for steady and long term growth. This long term focus is what differentiates Coffee investors from traders. When trading Coffee, you are more interested in short term price fluctuations than long term performance.

What is Coffee trading?

In Coffee trading, you trade contracts that represent Coffee, such as futures contracts, options, or exchange-traded funds (ETFs). This is a more short-term approach, and you don’t typically take physical possession of anything, whether that might be goods or share certificates.

A futures contract, for example, is an agreement to buy or sell a specific quantity of Coffee at a predetermined price on a set date in the future 2 , and it’s a very popular way to trade Coffee.

Coffee trading is a way to profit from Coffee price movements or it can be used by businesses to hedge against price fluctuations in the materials they use, trade, or produce 3 . For example, an airline might buy oil futures to lock in fuel prices and protect against potential increases.

This type of trading can offer opportunities for profit, but it also comes with risks, such as price volatility and market unpredictability. Because Coffee prices can be influenced by factors like weather, geopolitical events, and economic trends, they can be more volatile than other asset classes.

Ways to invest in Coffee

There are several options available when it comes to investing in Coffee and the one you should pick depends on your budget, experience, and the timeframe for seeing returns. Here’s a look at the various ways you can invest in Coffee.

• Invest in Coffee stock. Perhaps the simplest way of gaining exposure to Coffee is by investing in public companies that are involved in the Coffee industry. The share price of these companies correlate with the price of Coffee (to some extent). You should mainly be looking at companies involved in Coffee manufacturing, producing, and selling. 
• Invest in Coffee ETFs. Exchange traded funds (ETFs) are funds that trade on a stock exchange like any ordinary stock; however, they contain a selection of different stocks, providing a diversified blend for investors. You can also invest in Coffee commodity ETFs, which are funds that have their value pegged to the physical Coffee price.
• Invest in Coffee funds. Mutual funds are created when capital from many different investors is pooled together and a fund manager takes control, using their expertise to decide what Coffee assets to invest in and when to sell them. This can be a great way of investing in Coffee without the strain on your own knowledge and experience.
• Trade Coffee futures. Futures contracts are the most common way to speculate on short term Coffee price changes. Coffee futures contracts are standardized and trade on designated commodity exchanges, such as the Chicago Board of Trade or the Chicago Mercentile Exchange, which manage derivatives trading. Trading Coffee futures contracts require a detailed understanding of what impacts short term prices, and are most suited to someone with experience in the Coffee market 4 .
• Trade Coffee CFDs. Contracts for Difference (CFDs) are a popular way to speculate on Coffee price movements outside the US, as they allow you to start trading Coffee without having to own the physical asset itself. This makes them ideal for commodity trading, where it’s not practical to own and store large quantities of Coffee. With CFDs, you can profit from both rising and falling prices. CFDs also offer leverage, which can amplify your exposure to Coffee markets. 
• Trade Coffee options. Options let you buy or sell Coffee contracts at a predetermined price on or before a specific future date. Like futures, Coffee options trading requires some expertise but allows traders to capitalise on price changes and manage risk, which makes it popular with people familiar with the Coffee market.

How to invest in Coffee – a step-by-step guide

Investing in Coffee is a simple process. Before you begin, you need to register with an online broker to access the Coffee market. Follow the steps below to learn how to invest in Coffee. 

Step 1. Define your investment timeline

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You should clarify your investment objectives as the first step. Are you looking for long term capital growth, portfolio diversification, or short term speculation?

From there, you can start to craft your Coffee investment strategy. Long term growth or diversification might mean you’re better off investing in Coffee stocks or ETFs, whereas a short term approach means trading Coffee using futures or options.

That decision helps you decide which Coffee broker is best for you.

Step 2. Open a Coffee trading account with eToro

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Choose an online broker that offers the Coffee markets that you want to invest in.

We recommend eToro as the best Coffee trading platform.

It has one of the widest selections of derivatives available, so you’ll find multiple ways to invest in Coffee. 

4.6

eToro

Min. Deposit $100

Fees 1%

No. assets 3600+

Demo account Yes

Visit site

eToro review

eToro offers real assets only, no CFD products. eToro securities trading offered by eToro USA Securities, Inc. (‘the BD”), member of FINRA and SIPC. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Invezz.com is not an affiliate and may be compensated if you access certain products or services offered by the BD.

Step 3. Analyse the Coffee market

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Before investing, take the time to analyse the Coffee market thoroughly. You can look at factors such as supply and demand dynamics, geopolitical events, and technical analysis. You can use your analysis to help develop an investment or trading strategy. 

Step 4. Make your investment

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It’s time to place your trade when you’ve completed your research and defined your strategy. Search for the market you want to invest in and visit its trading page while logging into your brokerage account. 

Check its price and enter your trade details. You can click buy if you’re investing in Coffee stocks or funds. If you’re trading Coffee using futures or options, consider including a stop loss and take profit level to help protect your position. 

Step 5. Monitor your investment portfolio

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Regularly review your portfolio and its performance. You may want to consider making changes if necessary and be prepared to adapt your strategy as the Coffee market conditions adjust. 

What to consider before making a Coffee investment

When investing in Coffee, it’s important to approach with a well thought out strategy. Considering a range of factors before investing can save you time and money in the long run. Use the helpful tips below to plan your Coffee trading or investing strategy. 

What are your investment goals?

Before you begin, you should clearly define your investment objectives. Are you seeking quick gains, long term wealth appreciation, or steady income? Knowing your goals before you start can help guide you in your strategy and also which Coffee derivative to use. 

Does Coffee suit your risk tolerance?

Commodities like Coffee often experience large price fluctuations due to supply and demand dynamics, global events, and economic changes. Make sure you’re comfortable with the potential for market fluctuations. If you’re a short term trader, then ensure you’ve checked the historical price chart for Coffee to determine if it’s volatile enough for day trading. 

Will investing in Coffee add diversification to your portfolio?

For long term investors, diversification is one of the core principles to follow. When you invest in Coffee and add it to your portfolio, make sure it complements your existing investments. For example, if you already own several Coffee stocks, you may be better off choosing another commodity. 

Take the time to study the Coffee market dynamics. 

Like many commodities, Coffee has unique characteristics and supply and demand fundamentals. To trade Coffee, studying the broader Coffee market, especially historical price trends is essential. Before you invest in Coffee, you will need to understand the factors that influence its value. 

Choose the right investment vehicle.

We’ve already discussed the options available to you to buy Coffee. Each has its own advantages, so you should select the one most suited to your investment goals. For example, trading Coffee is best done via futures, options, CFDs, and spot. If you invest in Coffee, stocks or ETFs are the way to go. 

How does the coffee market work?

The coffee market functions similarly to other commodity markets. However, not all commodities move in the same way and coffee has a number of unique features that make it independent. Below are some of the key factors at play.

• Weather. Extreme heat or rain plays a significant role in coffee bean crops and can directly impact their price. Coffee bean farms can produce lower crop yields if weather conditions are not in keeping with what’s required. If farmers cannot produce enough coffee, then supply would be limited, and its price would likely increase. 
• Political instability. Most of the world’s coffee is grown in regions where governments are often unstable. For example, a lot of coffee plantations exist in South America or Africa. Both areas are well known for experiencing political issues at times, and an unstable government can affect coffee exports, thus impacting its price. 
• Exchange rates. The British Pound and U.S. Dollar both play an essential role in the price of coffee. It is traded on the New York and London stock exchanges. Buyers of coffee using another currency need to closely monitor exchange rates as falls in either would impact its price. 
• Environment. Farmers are always on the lookout for the best places to grow their crops and what’s around them can impact their yields. Chemical usage can greatly disrupt coffee bean growth, as can disease. In 2009, South American farmers saw crop yields drop by 40% when fungus started to grow on coffee leaves. 
• Supply and demand. Like all markets, the biggest driver of coffee prices is the principle of supply and demand. Many factors impact the supply and demand of coffee, including production levels, consumption, and even geopolitical events. 
• Exchanges. Coffee is traded on several exchanges where buyers and sellers transact. The price of coffee may be slightly different between exchanges. The main coffee exchanges are the Brazilian Mercantile and Futures Exchange (BM&F), NYSE Euronext Intercontinental Exchange (ICE), Multi Commodity Exchange (MCX), Singapore Commodity Exchange (SICOM), National Commodity and Derivatives Exchange (NCDEX).
• Hedging. The coffee market is often used for hedging purposes. Producers of coffee may use futures contracts to protect against future price fluctuations, resulting in stability for their business practices. 
• Speculators and investors. Retail investors and traders can impact coffee prices. This is especially the case for short-term movements, where speculators provide liquidity to the market and impact near-term price dynamics. 

Is coffee a good investment?

This really depends on the key supply-demand drivers, the status of the global economy and your own needs and desires as an investor. Coffee has many benefits that make it a good choice for investors. Its main advantage is its role in diversification. It also has a low correlation with traditional assets such as stocks and bonds, which means if you include coffee in your portfolio, you’ll spread risk and add stability. 

You can also use coffee as a hedge against inflation. When inflation rises, the value of coffee historically appreciates. The real world use of coffee also creates constant and growing demand. However, it’s important to remember that coffee investing is not totally risk-free. 

A wide range of factors influences its price, so you’ll need to have a solid understanding of market dynamics before investing. 

What are the risks of trading coffee?

Trading coffee has the potential for significant rewards but also carries risks you need to be aware of. These risks are the same across the overall commodity market, but for coffee, several more specific ones apply. Below, we’ve explained the main risks of coffee investing.

• Volatility. The coffee market is known for its price volatility. Compared to other markets, the price of coffee can widely fluctuate daily. It can be costly if you’re unprepared for the volatile nature of the coffee market. 
• Weather issues. Coffee requires specific weather conditions to grow. A poor climate in a coffee growing region could significantly impact harvests and output. However, as coffee is grown around the world, weather conditions do not impact its value unless in South America or certain regions in Africa. 
• Macroeconomic factors. coffee prices are affected by several macroeconomic factors, such as industrial demand, inflation, interest rates, dollar strength, and geopolitics. Before trading coffee, you should have a good understanding of these. 
• Coffee has no yield. Unlike with other investments such as bonds or dividend stocks, coffee does not provide any income yield. So, any returns you make rely entirely on its value increasing over time. You may encounter long periods of flat prices that can reduce your profits. 
• Low liquidity. In general, commodity markets have less liquidity than more mainstream assets like stocks or currencies. Low liquidity can be problematic, especially if you’re a trader, as you may have wide bid-ask spreads, which could impact the ability to enter or exit positions. 
• Regulatory risks. Government policies can play a role in the way coffee prices move. Export restrictions or changes in tax regulations could introduce unforeseen risks. 

Bottom line

Coffee investing offers the opportunity for diversification and portfolio growth. Coffee has potential benefits as a store of value and hedge against inflation, but it’s essential to weigh the risks such as price volatility and market uncertainty before investing. 

One of the key benefits of the coffee industry is the various ways you can get involved. There is an investment vehicle for everyone, from coffee stocks and ETFs for long term investors to coffee futures and CFDs for short term traders. A trusted and regulated trading platform is a must if you want to navigate the coffee industry successfully. 

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