Coconut Oil Futures

Trading coconut futures is a good idea for those who wish to supplement their income with a solid investment. Although coconut oil is exclusive to countries such as India, Indonesia, and the Philippines it is still a fairly good investment. In 2003 it did have some problems where futures prices fell but the spot price actually went up; this is the first time since coconut oil was introduced to the futures market that this happened. Coconut is an extremely versatile crop and it is grown all around the world in many places except for Europe and Australia. Anyone who is looking for a good investment will certainly want to think about coconut oil futures as they can be fairly profitable because of the international high demand for it.

Coconut oil is produced and marketed in bulk and in packs which can either be rather small or extremely large in size, up to 5 ml per package. Most of the coconut oil that comes in small packs is used for hair and body oil and there are several different brands which are widely recognized for their high quality and superior grade which most people tend to prefer though it can be somewhat expensive. The superior grade coconut oil is marketed throughout the entire world and right not there is certainly a high demand for it, making it a great investment for those who want to find a new way to see big returns within a relatively short period of time.

Those who are interested in coconut oil futures will want t know some of the major factors which have a significant impact on shaping the price of it. There are many variations in production as well as global supply and demand that can affect what the price of this type of oil is on any given day. The Philippines is one of the major countries when it comes to the production of coconut oil and they are extremely important when it comes to this market. Rotterdam is considered to be the center of the international coconut oil trade. Each year a total of around 5.5 million tons of coconut oil is produced each year, making it a very good investment for many because of the high demand for it overall.

India, Philippines, and Indonesia are the leading producers when it comes to coconut oil and their individual shares consist of 27%, 22%, and 23%. Other countries which play an important part in the production of coconut oil include Mexico, New Guinea, Sri Lanka, and Brazil. Millions of tons of coconut oil is traded worldwide each year and being able to become successful with trading it is a matter of having the knowledge and experience needed to be able to execute certain transactions at the right time. One of the reasons that coconut futures are a good idea for investors is because it is available year-round, peaking just after monsoon season.

Those who are interested in coconut oil futures will want to use the internet to their advantage, because you will be able to get all the information you need there in order to make educated decisions about what will happen to the price of it on a regular basis. Being involved in commodity futures involves having up-to-date information on whatever you are trading so at any given time you will be able to know what the price is doing. Of course with foods like these the weather is a significant factor in deterring what will happen to the supply of it and therefore the demand which then leads to a change in the price. If certain parts of the world such as India or the Philippines experience a shortage of coconut, it then becomes difficult to produce the oil from it and therefore a shortage occurs.

By the very basic principles of economics a shortage inevitably leads to an increase in demand which results in higher prices. You will want to find out as much as you can about coconut oil and where the price is headed because it has been down to dip down without warning, such as in 2003 when it experienced a record low drop in price, something that hadn’t happened since it came into the futures market. When you actually take the time to find out all of the necessary information on coconut oil you will find that you will do much better with this investment. Although there are certain risks that come with this type of commodity with regards to futures, it can be worth it because of the return.

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