Podcast: Trading Coffee. Explained and Challenged

A Conversation on How the Coffee Trade Works—and Why It Feels Opaque

I had the privilege of speaking with Guillaume Zbinden of Louis Dreyfus Company and Krisztina Szalai, Secretary General of the Swiss Coffee Trader Association—the only global association representing coffee traders. Together, we explored the intricate world of coffee trading, drawing on their extensive experience in both the Specialty and Commodity markets.

We delved into key questions:

Are these two segments truly as separate as they seem?

Why does the trade sometimes appear opaque?

Is the very nature of trading under threat?

And what drives trading houses to relocate to Switzerland, leveraging its strategic advantages?

My guests were generous in their insights, breaking down the fundamentals of coffee trading while also addressing and debunking common myths surrounding the industry. They shed light on the perception of opacity in trade and clarified why this reputation exists.

Most critically, we discussed the challenges facing coffee trading today: margin calls, razor-thin profit margins, and the rising risk of defaults.

The coming months will be pivotal, as the industry determines which trading houses will weather the storm and which may fall by the wayside.

These are tough times for coffee traders, prompting a larger question:

Is traditional trade still indispensable, or is it the unique services provided by trading that hold the real value?

Let’s dive in.

Krisztina Szalai, Guillaume Zbinden with host Philipp Schallberger