This resource could potentially set new records due to its unique properties.

Here Comes the Price Hike! Why Coffee Is Skyrocketing and How to Cash In

Grab your favorite mug, folks. Coffee prices are soaring to heights not seen in almost five decades. At the New York commodity exchange, a pound of Arabica beans set you back a whopping 335 US cents! This year alone, coffee has become 70 percent pricier. German roasters have already bumped up their prices and plan on raising them further.

The price surge on the exchange picked up steam again in early November, thanks to renewed worries about coffee production in Brazil, the world's largest Arabica grower. With the current season's harvest coming up short because of crummy weather, there are fears that the next season will meet a similar fate. Remember, coffee plants are exacting when it comes to the elements. Although some much-needed rain fell in November, the heat and dry spell beforehand caused many blooms to drop off, potentially slashing yields.

Time to Score Big - The Rally Is Far From Over

As early as October, we spotted signs that the coffee price rally would keep steaming ahead. In our October 10th issue, we gave two bullish calls on the coffee future. These picks have paid off handsomely for investors. They're now savoring substantial paper gains. Our call (WKN: SY0 SMH) has practically tripled, while our knock-out product with lesser leverage (WKN: VD2 601) has more than doubled. With the strong price increase in the underlying dampening the leverage effect, now could be a great time for investors to book their profits and buy fresh calls on rising coffee prices.

The positive momentum may last a while. The reason why? Vietnam, the second-biggest coffee producer after Brazil. Due to unfavorable climate conditions in Vietnam, where they specialize in the robusta variety, the harvest is expected to be lower than anticipated. Just like Arabica, the price has climbed to its highest level in 50 years. As long as demand doesn't dry up because of the price surge, the chances are good that coffee prices will march toward new highs.

Brave and risk-taking investors can bet on the US coffee futures prices using leverage. Just keep in mind that you're responsible for exchange rate risks. Always set stop-loss orders because leverage works both ways.

P.S., You can find the original article in the latest print edition of Börse ONLINE magazine here.

Want more fantastic financial insights? Don't miss our take on whether gold is on its way to another record year here.

Enriching the Picture:

This significant coffee price increase is triggered by several key factors, such as:

Climate change: Weather-related disruptions in coffee-growing regions like Brazil and Colombia lower supply and drive up prices.
Rising production costs: Farmers contend with escalating expenses for labor, fertilizers, and energy resources, which translate into steeper prices for fair compensation.
Supply chain challenges: Global logistical issues like container shortages, increased transportation costs, and disruptions lead to higher expenses in getting coffee to market.
Heightened demand: Growing consumer demand for high-quality, ethically sourced coffee strains against limited supplies of premium products, boosting prices.
Geopolitical turmoil and tariffs have intensified price increases by affecting trade dynamics.

Despite these upward pressures, there are signs that the supply outlook is improving, with global coffee production projected to rise by 4.0% year-over-year in 2024/25, which might stabilize or even decrease prices in the long run.

Investors can potentially profit from the coffee price rally by pinning their hopes on commodity futures, shares in coffee-related firms, ETFs/funds, or supply chain ventures addressing logistical challenges. Nevertheless, buyers beware: price volatility is a factor, driven by weather, geopolitics, and supply-demand imbalances. Stay savvy on production forecasts like USDA projections to make strategic investment decisions.

This significant increase in coffee prices presents an opportunity for investors to cash in, as the rally shows no signs of slowing down, especially with the expected lower-than-anticipated harvest in Vietnam, the second-largest coffee producer.
In the realm of personal finance, this coffee price rally can be an avenue for investors to invest and potentially earn substantial profits, by choosing wisely among commodity futures, shares in coffee-related firms, ETFs/funds, or supply chain ventures.
Technology also plays a part in the financial aspect of coffee investing. Investors can use leverage to bet on US coffee futures prices, but they must be aware of exchange rate risks and set stop-loss orders due to the characteristic volatility in this market.