Physical Coffee Trading
Afternoon fellas,
Hope everyone is well.
I was just wondering if anyone has any information generally on working at a top physical coffee trading company (Sucafina, ECOM etc.)? More specifically, I'm trying to get more information on:
1.What is work/life balance like? Is it exciting to work in and can you do it sustainably for the long run? Is it fulfilling?
- Do you get to travel often to producing countries?
3. Would it be possible to pivot into trading another class of commodity (metals, energy) or are you limited to movement into other soft ags only?
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What does compensation look like as a Trader (from Junior to Senior), and does working within M&A/the Investments Team pay just as well or not at all?
-
What kind of exit opportunities are available?
I realise that many answers will be highly subjective, but I just wanted to hear people's own experience/anyone that they know who is in the business.
Many thanks in advance for any information you might have!
Oaf
bump
i know someone who works as a coffee trader at LDC in Asia and can answer some of your questions based on what i've observed from conversations with my friend and looking at his instagram
1. seems decent, though lots of travel, but he loves his job and is travelling nearly every other day, no kids though so there's that
2. yes. 100%. especially if you're a physical trader, helps A LOT if you can speak the local language.
3. perhaps only soft commods? not sure on this but you will probably have to start out as an operator in another commod space before they let you be a "trader"
4. should be great when the times are good. physical trading usually pays as much if not more than IB from my understanding.
5. no idea
Thank you so much for your answer, I really appreciate it! Sounds like your friend is living a good life
This sums up a lot of it quite well, except I don't think comp is that great at the sort of shops you've mentioned (ABCDs included, though mostly the D in coffee), certainly wouldn't put it at MD level. There is a clear gap between comp in physical softs+ags vs physical energy.
However, it is a more chill job than trading paper at a fund and pretty fun if you enjoy physical trading.
Not sure this is correct - especially for the large coffee traders like Rothfos/NKG, ECOM, Volcafe. See:
https://www.wallstreetoasis.com/forum/trading/junior-commodity-trader-s…
Thanks for the info. Out of curiosity, do you know how much comp is at the entry level?
Check out the comments of this user
https://www.wallstreetoasis.com/user/370943
Appreciate the link - will have a look through their comments
Coffee's in a weird spot right now. Markets are inverted so you get punished for holding inventory, high interests rates make financing expensive commodities tough, and roasters are very weary of stocking up bc of economic outlook so importers are forced to hold on to inventory and get hit with the 2 points listed above. Margins are already thin so you add 20yr high prime rates, warehousing costs that are for longer than originally priced, and your hedge loses 2-7 cents per roll, it's hard to stay profitable.
Very interesting. Thanks for the insight - assuming you work in physical coffee trading? Any chance you would be happy for me to DM you if you do?
Thanks everyone for your comments, I really appreciate all of the information you have given. It's been extremely useful.
Just wondering - does anyone have any experience/know someone who's worked in the Investments side of a physical shop (either coffee or energy)? Do you know what compensation is like for this kind of work, and if it's possible to go into trading after being involved in the in-house portfolio investments/M&A team?
Know it's obviously a very case-by-case and highly subjective topic but any insights would be highly appreciated
Actually had exposure to both types of products.
In my experience there is more interlinking between trading and the overall "portfolio"/business side of things in coffee, as for some of the bigger players (OFI, Rothfos), the "upstream" supply chain is very much part of the trade cycle (not that this can't be true in energy, but energy is more capable of separating these functions). In fact it generally runs that you would learn to trade before being in a position to be involved in investments in physical coffee assets. I've basically never heard of M&A activity in coffee that isn't part of some bigger CPG company deal - I think the traditional finance roles don't really manifest the same dynamic (that you're used to thinking of) in coffee. Comp-wise you're probably starting out in the mid-high 5 figures all-in for a trading analyst.
Energy is different (IME). M&A is nothing like trading - those functions and skill-sets don't overlap very much. The impact of portfolio management/structuring and trading tend to be more intertwined, but your day-to-day focus would be on different things (would still be a much more fluid switch than from M&A). Comp for entry-level analysts is usually higher in energy - probably high 5 figures to low six figures all-in.
n/a-see reply above
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