MILAN – It has been an unprecedented week for Robusta coffee futures, which soared to their highest since the current 10-T contract started trading in 2008. May ICE Robusta coffee closed at an all-time high of $3,812 on Wednesday, 3 April.
On Thursday, the benchmark reached a new record intraday high of $3,849, but closed $46 down at $3,766. The contract eased slightly on Friday, but still posted a sixth successive weekly gain buoyed by tight supplies.
On Friday, May Arabica coffee settled 2.8% higher at $2.125 per lb – the highest since Oct. 2022 and an 11.5% gain from the previous week.
Arabica coffee prices are rallying due to the concern that recent heavy rain in Brazil’s coffee-growing regions may have damaged coffee crops, according to Barchart.
Somar Meteorologia reported Monday that Brazil’s Minas Gerais region received 75.4 mm of rainfall in the past week, or 335% of the historical average.
“The sharp rise in Robusta prices is due to concerns about drought-related crop losses in Vietnam, the most important producer country. The upcoming harvests in Brazil and Indonesia could alleviate these concerns somewhat and lead to a fall in prices,” Commerzbank said in a note.
According to I. & M. Smith, the central highlands of Vietnam are experiencing comparatively drier weather at this time of year, albeit that the rain season is traditionally due to begin in April, there are some reports that have come to the fore, on the potential for adequate development of the crop ahead of the harvest that is seasonal set to start toward the end of the year.
Weather forecasters are predicting rainfall to pick up towards the end of the month, which will be welcome news, as Vietnam production recovers following two consecutive years of lower than average production.
In Brazil, the Robusta harvesting is approaching. Production may increase, according to some recent estimates. Domestic prices have meanwhile reached all-time highs, with the Cepea/Esalq index for robusta type 6 for the first time above 1,000 reais (over USD 200) per 60 kg bag.
