Trade · 5 min read
How Green Coffee Prices Are Set: ICE Futures, Differentials and Outright Prices
The number on a coffee contract is built from two parts. Here is how they fit.
Quick answer
Green coffee is usually priced as a futures price plus or minus a differential. Arabica refers to the ICE 'C' futures market in New York and Robusta to the ICE Robusta futures market in London; the differential reflects origin, grade, quality and supply. The futures part is "fixed" on an agreed date. Some buyers prefer a single outright price instead. Because futures move daily, coffee quotes are valid only briefly.
What is the futures price?
The traded benchmark for coffee. It moves every trading day with global supply, demand, weather and currency.
What is a differential?
A premium or discount to the futures price for a particular origin and grade — for example an Indian Robusta Parchment AB against the London Robusta contract.
Outright or differential: which should you choose?
Outright prices are simpler for smaller buyers. Differential contracts let larger buyers choose when to fix the futures part of the price.
Frequently asked questions
Why does my coffee quote expire after a day or two?
Because the futures price underneath it changes every trading day.
