Written by Philip von der Goltz
Green coffee samples arrive in our office. Offers, pre-shipment and arrival samples: they're entered into our system and then opened and spread onto trays. Before undergoing meticulous physical inspection, I take the sample tray full of beans and stick my fat nose into them. Inhaling. Smelling. Like a truffle pig. This is where my journey starts and where I'm transported to the dry-mill in Neiva, Colombia, the spot where this particular lot was produced: Colombia washed Arabica Excelso Huila, Los Hibiscos. The parchment from the mill was delivered from smallholder-farms in the outskirts of Pitalito, nested between the mountains of the Central and Oriental Cordillera. I've been there in the past; it's a four hours' drive by car, and my trip illustrates two important things I want to share with you.
To understand the first point, let's meet Pablo Herrera. He lives with his family and grows coffee on a three-hectare plot of land. Pablo wakes up at sunrise, puts on his boots to work into the field. The humidity in the air lies on his face while he digs a hole and plants new seedlings. The dark humus sticks at his hands and gets under his nails. There is a deep connection with nature. Coffee is his source of income and supports the entire family. There are no real (legal) alternatives to this high-value agricultural commodity. So, despite his awareness of volatility, he knows that actual prices are very good. To him—and also to his neighbors— planting more coffee trees is a completely rational decision.
And that's the first thing to share: Pablo – as most human beings -thinks linearly. He believes that more coffee cherries from his new plantings will provide him with more income.
But coffee prices are not made in Colombia. Or Peru, or Guatemala. Smallholder farmers are mostly "price-takers" with very little bargaining power. Prices are made elsewhere, far away from the loamy slopes of the Andes. So this is the second thing to know: Pablo actually controls much less than he thinks.
So where are prices made? This is something we have looked at in our past blog, "What Makes Up the Price of Coffee?" A deeper look reveals one of the major drivers of coffee prices is the international futures markets in New York, for Arabicas, and London, for Robustas. Here, the market participants can be clustered in two main categories: commercial/physical traders and non-commercial/speculative actors. Commercial/physical traders are the well known multinational green coffee trading companies (OFI, Ecom, Neumann, Volcafe, Dreyfuss, Sucafina, etc.), major cooperatives and exporters (Cooxupé, FNC, etc.) and industrial roasters (Nestlé and Nespresso, JDE Peet's with Keurig Green Mountain, Starbucks, etc.). Together, these companies cover roughly 45% of the volume traded on the exchange.
So, if the physical coffee companies aren't setting the price alone, who is? Who has the muscles to move the remaining majority of 55 percent?
To understand the second category, the so called "non-commercials," or speculative market participants, let me zoom-out so I can explain some broader relationships. Coffee is traded with a category called "soft commodities." Cocoa, sugar, cotton, lumber and frozen orange juice are part of this group: 
The Arabica Coffee market moved about 4.2 trillion USD last year. These numbers are impressive, and here's how I arrived at them, because these numbers are also hard to find. In this theoretical exercise we take the contracts traded in 2025 and multiply it by the size of the contract and the average futures price. For coffee this looks like:
• 1 Coffee „C" contract = 37,500 lbs
• if 35 million contracts trade in 2025
• and average coffee price = 320 cts/lb
• 37,500x35m×$3.20 ≈ US$4.2 trillion traded notionally
But despite the astronomical size of this number – perspective is crucial. That's why we must contrast it with other comparable commodity markets.
Viewed through this lens, the 4.2 trillion USD for coffee appears formidable, but when looked at it from a broader context it loses its magnitude. Even after coffee's historic 2025 rally, the coffee futures market is still tiny relative to energy, precious metals, and bonds.
So, let's keep this perspective in mind while we get back to the non-commercial and speculative actors of the coffee market, the ones that actually influence coffee prices. They can be sub-divided into further categories:
1. Systemic Commodity Trading Advisors CTAs (Trend Followers)
These are probably the single most important marginal price movers in coffee today. They usually operate via algorithms and quantitative models. These models are responsible for up to 90 percent of all decisions. The CTAs are regulated by national authorities. They trade multiple commodities simultaneously, varying from agricultural to energy, metals and financial futures such as interest rates, equity indices and currencies.
Momentum and trends play a significant role in the algorithmic and quantitative world. Coffee fundamentals are largely indifferent for them,
When the coffee markets start to make a hard move, trending higher (or lower), CTAs tend to pile in aggressively.
These companies usually don't have coffee traders sitting on a desk analyzing weather patterns in Huila or elsewhere. Coffee is just one "signal" inside a hugely diversified systematic portfolio.
2. Marco Hedge Funds
These funds make large, directional bets on the broad movements of economies, interest rates, currencies, commodities and equity markets. They base their decisions upon their own analysis of global macroeconomic trends. They trade coffee more selectively and usually within a broader macro narrative:
• USD
• inflation
• emerging market's currencies
• weather shocks
• geopolitics
• commodity supercycles
These players are often more tactical than CTAs.
3. Commodity specialist hedge funds
These are probably the closest thing to "professional speculative commodity traders."
Some have deep agricultural expertise and some funds are run by former physical traders and focus on weather. These funds weigh crop stress, logistic bottlenecks, spreads, certified stocks, and arbitrage between the exchanges. They also focus on differentials.
4. Index money and passive commodity exposure
This is less "speculation" in the classic sense. These are pension funds, institutional allocators and ETFs that gain exposure to commodities as an asset class.
These investors may not even care about coffee itself.
Coffee is just one weight inside a broader commodity basket.
The non-commercial sector has often dominated the coffee market for twenty years now. Their massive capital power and corresponding liquidity allocation can produce violent movements of coffee prices. Liquidity can become scarce faster than traders and roasters might adjust. CTAs can create a self-reinforcing momentum, which adds to a rally.
The coffee futures markets have morphed throughout the years from a classical agricultural hedging tool into a more complex hybrid structure combining hedging and macro-financial volatility instruments. Around 2005, the C market was still dominated by the commercial hedgers and physical traders. Since then, the shift happened mainly because coffee was not viewed as a pure agricultural product. It moved toward becoming a financial asset class.
We have seen the past rallies how weather starts the move; the fundamentals then justify the story; and then the entrance of massive financial flows exaggerate the magnitude. The last 2024-2025 rally in the C market clearly showcased these effects. Physical tightness propelled the CTA trend, following actors into the coffee market, which moved prices higher. Option dynamics and systemic fund participation did their bit too. It's important to point out that fundamentals triggered the first part of the rally. Funds did not initiate it but they dramatically amplified it; they became the turbo.
And while Pablo Herrera finished his labor of the day, financial traders, algorithms and quants around the globe push prices into different directions.
He'll enjoy a cup of fantastic coffee in the middle of nature. A humble farmer with muddy boots and a smile in his face. Traders and quants in the mega-cities of this world will never enjoy such a fresh cup of coffee in their offices - but will have a high impact on his life. More than Pablo might be aware of.

















































































































