MILAN – Robusta coffee futures reached a new all-time high of $3,838 per ton on Wednesday, due to dry weather in Vietnam, which may affect the next crop cycle. According to analysts, the price rally was partly driven by panic buying from roasters with low coverage. In London, May ICE Robusta coffee rose by 4% to close at $3,812, its highest since the current form of the futures contract started trading in 2008.
“Weather conditions in Vietnam are not encouraging, and there are concerns over a possible water shortage for irrigation, which may hurt the coffee output for next season,” said coffee importer DRWakefield, quoted by Barchart.
ICE Arabica’s most traded contract for May delivery closed up 585 points at a three and a half month peak of 203.60 cents per lb.
The New York market was influenced by Robusta’s prices and a consequent high demand for lower quality Arabica beans.
Domestic coffee prices in Vietnam continued to increase sharply by 1.100 – 1.300 VND/kg to 102.300 – 103.000 VND/kg, report local sources. Dak Nong province is trading coffee at the highest price of 103.000 VND/kg after an increase of 1.300 VND/kg.
Traders in Dak Lak and Gia Lai purchased coffee at prices of 102.700 VND/kg and 102.800 VND/kg, an increase of 1.200 VND/kg and 1.300 VND/kg respectively. The lowest price recorded in Lam Dong province was 102.300 VND/kg, an increase of 1.100 VND/kg.
Vietnam’s 2023/24 output is up to 20% lower than a crop of 1.84 million tons collected the year before. The fall in production is attributable to climate change, lack of investment, and the shift to alternative crops.
According to Nguyen Nam Hai, chairman of the Vietnam Coffee Association, stockpiles with farmers and buying agents are minimal, indicating a tight supply situation.
The weather in Brazil will continue to be monitored throughout the month of April, with good levels of rainfall reported across the main coffee growing areas during the latter stages of March and early April, reports I. & M. Smith.
Weather forecasters are predicting rainfall to continue during the month of April, which would be considered seasonally normal for this time of year.
The Robusta crop has begun harvest in some areas, while internal prices surpassed 1,000 reais per 60 Kg Bag for the first time ever yesterday, according to the National Research Centre CEPEA.
