MILAN – Coffee futures in New York and London rallied to new 10-year highs on Monday on prospects of a supply deficit for this coffee year and persistent shipping bottlenecks. At Ice Arabica, the contract for March delivery closed 2.6% up at $2.4985 per lb, having earlier hit an intraday high of $2.5085, the highest since October 2011.
The contract for January delivery at the Ice Robusta rose 1.4% to $2,420 a tonne, after rising earlier to $2,437, the highest since August 2011.
Coffee futures prices are underpinned by lower production expectations. Inadequate rain in Brazil may stress the country’s coffee crops further and curb coffee yields. Somar Meteorologia on Monday reported that Minas Gerais, Brazil’s largest producer of the Arabica bean, received 25.5 mm of rain or only 39% of the historical average last week.
Brazilian exports were over 100,000 tonnes lower in November, according to the government. The country’s Association of coffee exporters (Cecafé) is due to release its monthly data on Friday.
According to the Vietnam Coffee and Cocoa Association, coffee exports in November and December 2021 is expected to reach approximately 130,000 tons each month. If the current price can be maintained, it is expected to bring in US$600mn before the year ends and reach the annual coffee turnover threshold of US$3bn.
The Ministry of Agriculture and Rural Development, Vietnam (MARD), said that the factors causing instability largely due to the COVID-19 pandemic is still prevalent and has led to difficulties in logistics and trade activities.
The Ministry considers this to be a crucial factor that will create resistance in coffee prices for the near future.