Coffee the Commodity
Did you know that Arabica coffee is traded in New York at the Intercontinental Exchange – the ICE; and that our prices are directly related to the price at which coffee is traded on the exchange? There are two markets for coffee: the cash -or spot- market, which is the price we would pay for green coffee if we purchased and wanted it shipped today. The second is the futures market price. The futures market for commodities like coffee is used to help protect against the wild variations that occur due to speculation, and events such as bad weather.
The quality of the coffee or percent of defects per 300 grams determines the premium or discount (differential) paid for green coffee. These classes of coffee are:
Class 1. Specialty Coffee – 0-5 defects.
Class 2. Premium Grade – 6-8 defects.
Class 3. Exchange Grade – 9-23 defects.
Class 4. Below Standard Grade – 24-86 defects.
Class 5. Off Grade – More than 86 defects.
Class 3 is the grade traded on the ICE. Class 1 and 2 demand premiums to the Class 3 price, whereas Class 4 and 5 coffees demand discounts.
Specialty really means the very best coffees a producing country has. The premiums paid for these top growths can be substantial.
Hashems monitors the coffee market daily and continually looks for the absolute best specialty coffees available in the world, at the relative lowest spot and future prices that we can predict. Although we price according to market, quality is at the top of our list when purchasing green coffee.
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