Spot, Forward and Warehoused: How EU Roasters Buy

There are three broad ways to buy green coffee, and most roasters use all three without necessarily choosing to.

Spot, ex-warehouse

Coffee already landed in Europe, sitting in a bonded or free warehouse in Antwerp, Hamburg, Trieste or Rotterdam. You buy bags, they ship to you in days.

Advantages: no import mechanics, no minimums beyond a few bags, you can cup exactly what you are buying, and the cash cycle is short.

Costs: the highest price per kilo. The importer's margin, financing, storage and risk are all in it — and reasonably so, since they carried all of them.

Use it for: filling gaps, testing an origin, and anything you need this month.

Forward, against a harvest

You contract before or during the harvest for coffee that has not yet shipped, sometimes not yet been picked.

Advantages: you secure specific lots rather than whatever is left; price is agreed before scarcity bites; and the producer knows what to prepare, which materially changes what they can do. A grower who knows in September that a buyer wants a particular block picked selectively will pick it selectively.

Costs: you carry the risk of the crop, and you commit cash or credit ahead of delivery.

Use it for: anything you depend on. If a coffee is in your permanent line-up, buying it spot every time means competing for it every time.

For India that means contracting in the November–March window for shipment February–June — see the harvest calendar.

Differential and fixed price

Two ways a forward contract can be priced.

Fixed price. A number per kilo, agreed now. Simple, and both sides carry the risk of the market moving against them.

Differential. A premium or discount against the relevant futures market — the "C" market for arabica, the London market for robusta — with the underlying price fixed later against a stated futures month. The differential reflects the coffee's quality, origin and certification.

Differential pricing is how most volume trades. It separates the two things being negotiated: how good is this coffee (the differential) and what is coffee worth today (the futures price).

For a small roaster buying estate lots, fixed price is usually simpler and perfectly reasonable. It is worth understanding differentials anyway, because it tells you how an exporter thinks about the premium your specification is worth.

Warehousing in Europe

A middle path: contract forward, ship, and store in a European warehouse, drawing down as you need it.

Advantages: you own the coffee at the price you agreed, and you have it. Storage in a proper coffee warehouse is temperature-appropriate and cheap relative to the coffee's value.

Costs: cash tied up, storage fees, and the coffee ages on your account rather than the importer's.

If you go this route, pack accordingly — a barrier liner is worth much more over nine months of storage than over six weeks of transit. See GrainPro vs jute.

The cash-flow reality

This is what actually decides most small roasters' buying pattern, and it is worth being blunt about.

A container is a large single payment months before the coffee is sold. Buying spot converts that into many small payments matched to sales. That is expensive per kilo and much easier to survive.

The sensible progression is to move your core coffees to forward contracts as volume justifies it, and keep buying the rest spot. Trying to move everything forward at once is how roasters end up with a warehouse full of coffee and no working capital.

Practical terms to agree

• Shipment window as a month, not "ASAP".
• Price basis — fixed, or differential against a stated futures month.
• Payment terms — and whether any pre-payment supports the harvest.
• Quality — grade, screen, moisture, and "as per approved PSS".
• What happens if the crop underdelivers. In a season with disease pressure this is not hypothetical — see India's 2025/26 crop.

That last clause is the one nobody writes and everybody needs.

Hoysala’s offer list carries separate bag counts for India and the EU, so what is genuinely free to sell into your market is visible before you contract rather than after.