As is the case with other commodities, China looms large when it comes to coffee.
“Consumption of coffee in China is expected to grow by an annual rate of 9% for the next five years. This is not only from China’s large population but it’s rising middle class, which is expected to grow to 630 million people from 230 million. Additionally, dry weather in Brazil has supported coffee returns this year. In the past 30 days, rain was as much as 50 percent below average, according to a US based weather group,” according to S&P Dow Jones Indices Vice President Jodie Gunzberg. [Commodities in the Year of the Horse]
For those that enjoy market indicators and effects, Gunzberg notes in 2002, the last time the Chinese zodiac was in the year of the horse as it is this year, coffee futures rose almost 11.5%.
iPath Dow Jones-UBS Coffee Total Return Sub-Index ETN
ETF Trends editorial team contributed to this article.