Coffee trade: routes and prices

The Global Coffee Trade: Routes, Prices, and Swiss Influence

The coffee trade is a complex network that connects producers, traders, and consumers across continents. Switzerland, in particular, plays a significant role in the global coffee market. But how does the coffee trade work, how are prices determined, and which trade models like Fairtrade and Direct Trade are gaining ground?

Coffee is one of the most traded commodities in the world, and the journey of the beans from the growing regions to your cup is long and multifaceted. Switzerland, as one of the global hubs of commodity trading, has a considerable influence on price formation and the trade of coffee. But what happens between the harvest in Brazil or Vietnam and the sale of roasted beans in Europe? How do stock market prices and trade agreements shape the market, and what alternatives like Fairtrade or Direct Trade offer coffee farmers fairer conditions?

In this article, we shed light on the mechanisms of the global coffee trade as well as the specific challenges and opportunities it presents.

The Coffee Bean Trade: A Look Behind the Scenes

The global coffee trade is a complex network that connects producing countries, trading hubs, and consumers. Switzerland plays a central role here – not only as a coffee-drinking nation but also as an active player in international coffee trade.

But how does this trade actually work, and which factors influence prices and trading structures? This text highlights the key aspects of the coffee trade, from price formation mechanisms to fair trade practices and the challenges of transport.

How Does the Coffee Trade Work?

The coffee trade begins in the producing countries, where freshly harvested coffee beans are brought from plantations to exporters or cooperatives.

Arabica coffee is mainly traded on the Intercontinental Exchange (ICE) in New York, while Robusta coffee is traded on the London International Financial Futures and Options Exchange (LIFFE), which today is part of the Intercontinental Exchange (ICE) in London. These two exchanges are the most important trading venues for the respective coffee varieties on the global market.

These exchanges play a crucial role in price formation, as they set the so-called “C” prices (commodity prices) for Arabica coffee and the “Robusta futures.” These prices are heavily influenced by global factors such as crop failures, political events, or currency fluctuations.

Why Is Switzerland Active in the Coffee Trade?

Switzerland is particularly active in international coffee trade for several reasons. On the one hand, some of the world’s largest commodity trading companies are headquartered here, dominating global coffee trade.

In addition, Switzerland offers optimal conditions for commodity trading thanks to its political stability, infrastructure, and expertise in the financial sector. Another factor is its proximity to key European markets, which makes Switzerland an ideal hub for the coffee trade.

How Is the Price of Coffee Determined?

The price of coffee is influenced by a wide range of factors, including supply and demand, crop yields, climatic conditions, and geopolitical developments. On international exchanges, prices are often driven by speculation, which can lead to strong fluctuations.

Another key factor is the production costs in the country of origin, ranging from workers’ wages to the cost of fertilizers and pesticides.

The price of one kilogram of green coffee in Brazil can vary greatly—depending on the quality of the beans, the region where they are grown, and current market conditions. On average, the price for standard-quality green coffee in Brazil is around 2 to 4 US dollars per kilogram. Higher-quality specialty coffees can be significantly more expensive, often ranging between 5 and 10 US dollars per kilogram or even more.

However, these prices fluctuate depending on harvest conditions, global supply and demand, and exchange rate variations. For the most accurate and up-to-date prices, the specific market conditions and timing of the inquiry must be taken into account.

What Are Fairtrade and Direct Trade?

Fairtrade and Direct Trade are two alternative trading models that aim to improve conditions for coffee farmers.

Fairtrade is a certified system that guarantees minimum prices for coffee and provides additional premiums for social and environmental projects. It encourages the formation of cooperatives and advocates for better working conditions.

Direct Trade goes a step further by fostering direct relationships between roasters and coffee farmers. In this model, middlemen are largely eliminated, allowing farmers to receive higher prices and gain more control over their products. Direct Trade also places strong emphasis on coffee quality and on building long-term relationships between producers and buyers.

How Much Does It Cost to Transport a Container from Brazil to Switzerland?

The transport costs for a container of coffee from Brazil to Switzerland can vary greatly and depend on factors such as container size, current freight rates, the transport route, as well as insurance and customs fees.

On average, the cost of shipping a 20-foot container (TEU) ranges between 2,000 and 4,000 US dollars, though these prices can fluctuate depending on market conditions. Additional costs include domestic transport, storage, and possible duties and taxes.

Are There Alternative Approaches in the Coffee Trade?

Alongside traditional trading routes, there are increasingly alternative trade models that focus on transparency and sustainability.

These models emphasize direct exchange between producers and consumers, often supported by digital platforms. Such systems enable farmers to sell their products at fair prices directly to roasters or even to end consumers—without relying on large trading companies.

What Is the Strategic Reserve in Switzerland?

Switzerland maintains strategic reserves to secure the supply of essential goods, including coffee, in times of crisis.

These reserves are managed by private companies on behalf of the Federal Office for National Economic Supply and must always hold a defined stock of coffee and other staple goods. The strategic reserve ensures that Switzerland can rely on sufficient supplies even in the event of delivery disruptions or global crises.

The coffee trade is a dynamic and multifaceted business that goes far beyond the simple exchange of goods for money. From price formation on global exchanges to transport logistics and alternative trading models like Fairtrade and Direct Trade—every aspect directly influences the quality and price of the coffee we enjoy every day.

Switzerland plays a central role in this—not only as a consumer but also as an important actor in the international coffee trade.