The current low price of coffee can be best exploited through the coffee exchange-traded notes iPath Pure Beta Coffee (JO) and the iPath DJ-UBS Coffee TR Sub-Index (CAFE). Investors will have to endure weakness in the markets and 0.75% fund expenses until prices increase to higher levels.
Unfortunately, many coffee companies that will benefit from the current low price of coffee are trading at price multiples that make them unattractive.
Current Low Coffee Prices
Robusta coffee increased to the highest level compared to the last four months in London due to a decrease in sales from Vietnam, the biggest grower of the variety, as a result of the Lunar New Year. According to Volcafe, a coffee unit of ED&F Man Holdings, Vietnamese farmers who are seeking higher prices are holding back beans and may increase "retention" after Tet, it is a festival that celebrates the Lunar New Year.
A broker
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