MILAN — Robusta coffee futures surged to new highs: in yesterday’s session, Wednesday, 25 September, the main contract for November delivery on the London market closed up a further $134 (+2.5%) to $5,446, the highest level on record for the 10-T contract. Ice Arabica also closed in the black, the third time in a row.
The main contract for December delivery ended the day at $269.10, a new 13-year high for the maket.
Weather developments in Brazil and Vietnam continue to be a source of concern for market participants.
The potential risk of supply shortages in both countries due to the weather is driving prices higher, according to a recent report by the Center for Advanced Studies on Applied Economics (Cepea) at the University of Sao Paulo.
Recent heat waves, drought and wildfires in countries including Brazil and Vietnam, have been intensified by climate change, research shows.
“We are seeing fairly dramatic changes in what otherwise we would call traditional normal weather patterns, and these have dramatic effects on the expected supply of coffee come next harvest season,” said Sven Anders, a professor and agricultural economist at the University of Alberta, Canada, quoted by The Canadian Press.
In Vietnam, the export price of Robusta coffee is now almost $900 per tonne higher than that of Arabica. Previously, Robusta prices had been up to half those of the more valuable variety.
In the first half of September, Vietnam exported 15,155 tonnes of Robusta, earning $76.6 million, with an average price of $5,053 per tonne.
Arabica coffee export stood at 1,129 tonnes worth of $4.7 million, with an average price of $4,166 per tonne.
“The higher price of Robusta coffee brings great benefits to Việt Nam’s coffee industry because about 94% of Vietnam’s coffee growing area have planted this variety,” Nguyen Nam Hai, chairman of the Vietnam Coffee and Cocoa Association (VICOFA) told VTC news.
According to the General Statistics Office, during the first eight months, Vietnam exported more than one million tonnes of coffee, earning $3.99 billion. The export fell by 12.5% in volume, but surged by 34.8% per cent in value year-on-year.
