Forecast of coffee prices after they reach new multi-year highs

Forecast of coffee prices after they reach new multi-year highs

Despite the fact that coffee is one of the most popular drinks in the world, it is not among the top investment tools, judging by the enthusiasm of investors. Compared to other commodities such as gold, silver and oil, coffee is not so popular. But people who invested in coffee in 2020 or earlier are now making a profit, as coffee prices reach their highest since 2015.

Let's look at the coffee market to better understand the price dynamics and get an answer to the question whether it is worth buying coffee at current levels.

Coffee as a financial instrument

Investors can buy and sell coffee through the futures exchange. Coffee contracts are traded on the CME Group. Each futures contract is 37,500 pounds. Contracts are priced per pound. If coffee futures are traded at $100 per pound, then the full value of the contract is $37,500.

Platforms where you can buy contracts for difference (CFDs) allow you to speculate on goods and other instruments. Instead of immediately buying expensive futures contracts, investors trade CFDs, the value of which rises or falls depending on the movement of the underlying asset. In our case, this is the price of coffee.

CFD brokers offer leverage, so investors using leverage can buy more CFDs by investing less capital. It is necessary to remember that leverage can increase your losses if the market goes against you.

There are two types of coffee: Robusta and Arabica. At the same time, Arabica coffee beans account for 75 percent of world production. Arabica is sold at a higher price compared to Robusta. Key coffee giants such as Kraft, Procter & Gamble, Nestle and Sara Lee, acquire almost half of all coffee produced for their own use.

Coffee beans grow on small trees, and it is vital that they grow under optimal weather conditions. Bad weather can affect the entire global market.

Brazil is one of the largest coffee producers, and under normal conditions produces almost 40% of the world's coffee. Brazil, Vietnam, Colombia, Indonesia and Ethiopia account for about three-quarters of the world's coffee production.

Comparison: Arabica vs Robusta


  • Higher acidity
  • Lower caffeine content
  • Sweet and mild taste
  • Pronounced and fragrant notes


  • Lower acidity
  • Higher caffeine content
  • Strong, rich and bitter taste
  • Burnt wood/rubber fragrance

The forecast of coffee prices depends on the drought in Brazil

Coffee is not the only product whose price has increased significantly over the past year. News about coffee prices and analytics are not nearly as detailed as for gold or oil.

Gold and oil have more noticeable growth catalysts, so it is easier for beginners to invest in them. For example, the growth potential of gold is based on concerns about inflation, and oil prices correlate with the results of OPEC+ meetings.

So, what determines the prospects and trends of coffee prices?

Perhaps the most notable factor is the ongoing drought in Brazil. Reports of a devastating drought began to appear in the headlines at the end of 2020.

The USDA said in a June 2021 report that global coffee production in 2021/22 is projected to decline by 11 million bags to 164.8 million, mainly due to weather conditions in Brazil.

It seems that there is no solution to the problem of drought in Brazil in the near future. And this bodes well for the forecast of coffee prices until 2023.

Commerzbank agricultural analyst, Dr. Mikaela Helbing-Kul, said that if the drought lasts until August, its consequences will also affect the harvest season of 2023.

Nevertheless, traders and investors are wondering whether the recent surge in coffee prices is the result of the fact that the market has taken into account the drought factor, or whether it is still worth waiting for a bullish trend in prices.

Coffee price forecast: assessment of key levels

Coffee in July was trading around 154 USD per pound. Key Support and Resistance levels for Coffee:


  • 128 USD - minimum on April 16
  • 137 USD - minimum on May 3
  • 145 USD - minimum on May 24


  • 165 USD - June 1 maximum
  • 182 USD - the maximum of 2015
  • 200 USD is a psychologically important level

This does not mean that coffee prices will not be able to exceed these levels. In fact, coffee was trading below 100 USD per pound in 2020 and above 300 ISD per pound in 2011. Looking even further, the last time coffee prices traded above $300 was in 1997.

Although it can be difficult to make a forecast of coffee prices for a couple of years ahead, since it depends too much on weather trends, it is a little easier to assess the short-term trend.

And a short-term rally first formed on the charts in July 2020, when the price of coffee exceeded the 20-day moving average. The charts show that coffee broke up its moving average in April 2021 at about 130 USD, and then the momentum helped it to exceed 160 USD.

The price of coffee very quickly reached a maximum of 165 USD on June 1, 2021, a level not seen since October 2016, and continued to trade below the moving average, where it was at the beginning of July. This in itself signals a bearish mood on coffee prices, but it is necessary to analyze other indicators before making any conclusions.

Coffee, D


What's next with the forecast of coffee prices?

The Relative Strength Index (RSI) has recently reached overbought territory three times, the last time around April. At the beginning of July, the RSI was around 50, this is the middle of the range, so it won't help us much.

Investors have three options. Sell coffee, open a long position on coffee, or wait until the picture becomes clearer.

The arguments in favor of selling coffee are based on the belief that the market has already taken into account the ongoing drought in the price, and the price decline from 165 USD to current levels is only the beginning of a long downward trend.

In this case, investors should consider setting a stop loss above 165 USD, for example, at 170 USD. If the coffee successfully overcomes the resistance level of 165 USD, this may be a sign that selling is not the correct option.

But the last few days have shown that buyers are trying to raise coffee prices significantly above the level of 150 USD. Combined with the fact that coffee prices are noticeably higher than they were at the end of 2020, we can assume that the rally still has prospects.

In this case, a stop loss at the level of 145 or 137 USD is appropriate, since a drop below the support level indicates that there may be a rally.

Frequently Asked Questions

Is coffee a good investment?

Although coffee is not included in the list of the 5 best-selling commodities, it can also open up attractive trading opportunities. Do your own research and think about trading coffee with contracts for difference. CFDs allow you to benefit from price fluctuations regardless of the direction of the market. Open a long position if you think that the price of coffee will go up, or a short position if you think that it will go down.

Will the price of coffee increase in the future?

Coffee prices rose sharply between the middle and the end of 2020, reaching a multi-year high of $165 in June 2021.

What factors influence the price of coffee?

Weather is one of the most important variables that affects the price of coffee. Other factors include rising demand worldwide. For example, the coffee chain giant Starbucks plans to add 20,000 new stores by 2030, bringing the total number of stores to 55,000 units. If the coffee chain succeeds in new markets, the price of coffee may rise.


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A single user space has been created for the company's customers, in which gadget owners have unhindered access to a huge number of services, from television (Apple TV) and music (iTunes) to a payment and credit system.Manufacturers of electronics and gadgets are actively developing ecosystems:Apple: smartphones, tablets, laptops, watches, headphones, TV, HomePod speaker, smart home, payment system.Xiaomi: from appliances and household appliances to air purifiers and cat toilets.Huawei: the main gadget of the ecosystem is a smartphone, appliances, Huawei Seamless AI Life intelligent system and other gadgets.Honor: smartphones, laptops, headphones and watches.Yandex: elements of a smart home, an ecosystem of services (voice assistant, delivery, music, taxi, search engine, car sharing, etc.).Alibaba: retail, credit scoring, payments, and so on.It is not only IT companies that are building an ecosystem. For example, BMW and Daimler have created a partnership project "You Now" with some startups. The companies have a goal to develop urban transportation services for customers in all countries of the world. Services include car sharing, taxi, parking, charging for electric cars, as well as applications for multimodal transportation.The center of the ecosystem is the client with all his daily needs.Governments and government departments are also building ecosystems. For example, in Canada, the authorities plan to form an aerospace innovation network by combining research organizations with industry companies.The largest ecosystems at the moment are created precisely around the needs of retail customers and consist of services for purchases, payments, entertainment and travel. In addition to the companies mentioned above, Beber, Tinkoff, and Mail.ru, MTS.Types of ecosystemsExperts identify two key types of ecosystems:Ecosystems built around solutions. Companies coordinate with each other, develop the final product for the user. For example, BMW and Daimler, creating a product for customers.Eosystems that connect its participants using a transaction platform (for example, BEAC and Yandex).What is the difference between an ecosystem and a conventional business model?BCG analysts identify several key differences between ecosystems:The modular principle, the essence of which is that the components of the proposal are developed independently, but at the same time they function as a single whole. The client can independently choose which functions to use. The principle of operation is similar to applications on smartphones: some of them are pre-installed on the device, but most of them can be downloaded at the discretion of the client.Customization. In the standard business model, the company focuses exclusively on the needs of customers and its own capabilities. In the ecosystem, all products must be compatible with each other. In other words, each product needs to be adapted to the ecosystem platform.Multilateral relations. The relations of participants within the ecosystem are not two-sided, since each service of the system simultaneously interacts with application developers, suppliers, payment systems and other participants.Coordination. The ecosystem is a complex mechanism, the management of which can be effective only with the coordination of participants through the introduction of common rules, standards and processes.A little history of business ecosystemsThe similarity of ecosystems began to arise even before the creation of the term itself. For example, Lloyd's of London has existed since the 17th century and is a full-fledged insurance market. Today, the corporation includes more than a thousand companies, hundreds of individual participants, agents, brokers and syndicates.In the 20th century, automakers such as Toyota and Volkswagen also developed their own ecosystems that unite suppliers and distributors.The current trends began to be created in the mid-2010s by IT giants and fintech corporations.So, the distributor of lotteries "Stoloto" is developing its ecosystem.Alibaba went public in 2014. In the company's securities prospectus, the concept of "ecosystem" was repeated 160 times. Many companies soon followed in the footsteps of Alibaba. Now the word "ecosystem" is found in company reports 13 times more often than 10 years ago. Most often, ecosystems are digital, based on digital tools and platforms. McKinsey estimates that such systems will generate approximately 30% of corporate income by 2025.Is there any benefit from ecosystems for the user?Customers, using the ecosystem, get benefits and convenience. Thanks to seamless identification and a single platform, ecosystems become convenient for consumers. There is no need to constantly enter credentials and confirm your identity, in any service, the client is recognized by ID. Moreover, in ecosystems, centralized user support is often created in chat bots or contact centers.Ecosystems generate additional value for customers in the form of convenient registration and identification, favorable terms of use and other things. Favorable conditions arise on the basis of subscriptions, which imply, for example, access to the media library, free delivery, early access to discounts, etc. In Russia, examples of subscription ecosystems can be called "Yandex Plus" or "SberPrime", with which the client has access to music, podcasts, movies, discounts and much more.Customers have already felt the benefits of ecosystems. According to McKinsey, 71% of users are ready for ecosystem extensions.Advantages of the ecosystem for businessBy creating an ecosystem, the company attracts more customers, which naturally leads to more sales of goods and services.So, if a customer wants to use food delivery, he is immediately offered delivery of dishes and ready-made food rations. And when a small business opens an account, it sells payment solutions, legal support and accounting services. Companies participating in the ecosystem are growing at a much faster pace. For example, the speed of building up the user base of the online cinema Okko after connecting to the Sber increased by 12 times. In addition, companies within the ecosystem share best practices among themselves, know-how and best practices. Thus, it turns out to meet the needs of consumers more effectively.It is worth noting that IT corporations have begun to integrate all services into single applications:WeChat — Chinese financial, household and government services;Alipay — Chinese payment system with financial services;Grab is an application with taxi, food and parcel delivery, bicycle and scooter rental, as well as credit processing, payment system, online medicine and insurance;Line Corporation-an application for food delivery, logistics for restaurants and a payment system;Gojek is an application that combines food delivery, taxi, courier services and financial services;Uber-taxi, car sharing, payment system, food and goods delivery;Google Map is an application for booking tours and air tickets, planning regular trips, ordering food and calling a taxi;Yandex Go is a Russian application with taxi, carsharing, public transport, cargo transportation, delivery of goods, as well as food from restaurants and products from Yandex Shops;It is felt that now the business has become less confident in itself, functioning alone. Since ecosystems have become not just to compete with companies in some specific industries, but to capture entire blocks of industries.Does the ecosystem always bring profit?Of course not. So, Spotify, which provides a music service, is still losing money, even with a rapid increase in the number of subscribers. So is WeWork, which develops office spaces and services for them. No one is immune from risks and mistakes, including the ecosystem. Spotify provides a basic free version and a paid subscription, which limits the company's earnings. WeWork faced the problem of reducing office visits during the pandemic, which led to significant losses.Risks that ecosystems carryLow level of freedom of choice for the client. Loyalty programs overestimate the user's exit threshold from the ecosystem.The company's ability to innovate is decreasing due to the complexity and growth of the organizational structure.The complexity of developing an individual approach to customers, since the consumer becomes only a set of digital templates. What is required for success?The ecosystem should combine such factors as a well-thought-out strategy, a high-value offer, as well as a stable customer base. A good advantage is the wide geography. BCG analysts claim that successful ecosystems interact with partners in 10 or more countries.However, even if all the rules are followed, the ecosystem may not succeed:A large system with a wide network of partnerships is difficult to manage.The regulations of regulators and antimonopoly structures may become a limiting factor. A striking example is the Chinese company Tencent, which suffered due to the regulator's concern about the company's expansion prospects.
Crypto Platforms Coinlist, Binance Launchpad and Binance Launchpool
Crypto Platforms Coinlist, Binance Launchpad and Binance Launchpool At the moment, digital coins are available on various platforms that provide services for customers seeking to earn money on cryptocurrencies and other assets.In this article, we will talk about the largest platforms: Coinlist, Binance Launchpad and Binance Launchpool, each of which makes it possible to invest in crypto projects and earn new tokens.CoinlistCoinlist is a platform on which a digital currency is developed before being auctioned on the secondary market. The platform has several advantages, one of which is the opportunity to get new tokens before they are listed on the exchange. That is why the investor can evaluate the project in advance, regardless of whether it is new or not.In addition, users can select transactions through the platform in question using Coinlist pro. On the platform, you can exchange cryptocurrencies from Coinlist, for example, Celo, Algo, AAVE and others. In general, the platform is an exchange of crypto assets together with pairs of the US dollar (USDT) and BTC.You can earn money on Coinlist wallets (for example, Celo, Algorand, Flow and NuCypher's NU) through staking. Moreover, the platform can convert BTC to WBTC, and it also helps the development of the Defi project. On the platform, you can raise funds through ICO. If the company needs additional funding, it can place its coins. In the meantime, investors can make a good investment in the project.Coinlist has a license registered in some regions (Alabama, Arizona, and so on), and therefore the platform can be considered reliable. When registering on it, each user must comply with the rules of KYC (know your customer) and AML (Anti-Money Laundering), in other words, the principles of the counterparty's fame. To do this, you will need to provide some documents.Binance LaunchpadBinance is considered the world's largest exchange in terms of trading volume, where you can exchange not only digital assets. On Binance Launchpad, an exclusive platform for launching the initial offer of tokens selected by Binance, many projects become successful. To date, more than 20 projects have been launched through Binance Launchpad. Even Binance considers its panel to be a key element of comprehensive project support. The method of fundraising offered by the service is called IEO. It involves collecting additional sources of financing on behalf of the company.In Binance Launchpad, you can view data for each hosted project. Thus, every investor who wants to invest in a particular project has access to extensive information about it, which allows the user to thoroughly approach the choice of the target for investment, as well as increase the chances of making a profit. Access to the panel is provided if you have an account on Binance, you must pass the KYC procedure and you have at least 100 BNB tokens on your account.Binance LaunchpoolThe Binance ecosystem has one more service - Launchpool. There, users can earn in new coins through the storage of their coins, such as BNB, BUSD and other well-known cryptocurrencies. Investors can consolidate their coins in separate pools. The amount of earnings within the day depends on the amount of coins in the pool. For each project, the list of which is presented on the platform, its own pools are created. Any user who has more than 0.1 of any token in the pool can become a member of the project. The earnings of each user are recalculated every hour, you can pick up coins at any time. At the same time, you can sell the earned coins only from the moment when the project is listed on the Binance.com. The fed coins are allowed to be exchanged after the start of trading.
What is OlympusDAO?
What is OlympusDAO? In recent days, observations of the altcoin portfolio of American billionaire Mark Cuban have shown his growing interest in the relatively niche cryptocurrency OlympusDAO.But what is OlympusDAO? Read on to find out more.The Push for algorithmic stablecoinsThe project aims to create an algorithmic decentralized reserve currency that maintains its long-term purchasing power outside the world of fiat currencies or real commodities.This is a symbol of moving away from traditional stablecoins-currencies that are pegged (often in the proportion of 1:1) to a currency such as the US dollar. There are almost 40 billion US dollars worth of tokens in global circulation.Although many have argued that cryptocurrencies like USDC and Tether have provided liquidity to the crypto asset space and acted as an important bridge to the world of traditional finance, other commentators are not so optimistic.Critics emphasized the fact that the value of stablecoins by their nature fluctuates depending on the value of the real fiat currency, and argued that therefore they can be subjected not only to inflation, but also to interference and verification by national regulatory and legislative bodies.Thus, there was an impulse to develop an algorithmic stablecoin that can achieve stability and maintain purchasing power over time, but at the same time will not be exposed to the risks that a link to a fiat currency carries.As a result, there was a project aimed at solving the problem of inflation, which is faced by various regions of the world.The minimum price of OlympusDAO is supported by DAIAlthough the price of the OMH token from Olympus will not be stable, this cryptocurrency has a long-term minimum price equal to the price of its reserve currency or several currencies.So far, DAI is the first and only reserve currency of OlympusDAO, although others could be added.DAI is one of the first currencies in the field of decentralized finance (DeFi), which has become widespread, and is a stable cryptocurrency running on the Ethereum blockchain, which seeks to maintain its value as close as possible to 1 US dollar using an automated smart contract system.Thus, when the price of OlympusDAO falls below that of DAI, the protocol buys and burns OHM tokens to reduce the supply and increase the price.Mark Cuban has locked up 75 OlympusDAO that he bought over the weekend, bringing the total amount of OMH that he blocked in order to receive a reward to 536.The 62-year-old trader will undoubtedly hope that his latest investment will bring more benefits than his previous ones in TITAN. The DeFi cryptocurrency, in which Cuban invested, sank by almost 100% in a few hours last month.By the middle of the day, OlympusDAO was trading 1% higher, at the level of 575.12 USD, which is significantly lower than the historical maximum of 1479 USD, but significantly higher than the May low of 164 USD.Aaron Arnold, a leading Altcoin Daily and cryptanalyst, in June named Olympus DAO (OHM) one of the top five low-capitalization cryptocurrencies.
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