MILAN – Last week saw Robusta coffee futures reaching unprecedented highs on the backdrop of an increasingly dramatic situation on the supply side. In London, the main contract for July delivery ended the week with a 4.62% appreciation over the previous week.
On Friday, the benchmark gained $18 to settle at $4,080, recovering after Thursday’s strong sell-off, but still below Wednesday’s record close ($4,195).
In New York, the contract for July delivery gained 3.2 percent from the previous week, closing Friday at 231.85 cents, up marginally (+75 points) from Thursday.
In Wednesday’s session, the ICE Arabica had soared to 240.35 cents, its highest level since February 2022.
Meanwhile, the situation in Vietnam is becoming increasingly worrying, both on the production and trade side. The continuing severe drought blamed on the El Niño phenomenon, which is close to its end, is also likely to jeopardise the next Robusta coffee harvest, following a sharp drop in production already recorded for the current year.
Tight supply with very little coffee left in the warehouses, combined with the ongoing speculative games, is putting the entire supply chain in the Asian country under severe pressure.
Reports and photos of drought-burnt plants, posted by some local portals, outline a potentially critical situation.
The Hanoi Department of Agriculture estimates a possible drop in production this year to 24.53 million bags. Other sources forecast a crop of 26 million bags at most.
