MILAN – After a temporary setback on Tuesday, Robusta coffee futures surged again yesterday, reaching new all-time highs. In London, the main contract for July delivery gained $149 to close at $4,266 (intraday high of $4,305), a new record for the 10-T contract. Ice Arabica also surged on carryover support from the rally in the Robusta market. July Arabica coffee in New York rose 405 points to settle at 225.90 cents.
Tight supply in the world’s biggest producer Vietnam continues to weigh heavily on the Robusta market.
Further exacerbating the situation were the early reports on the new conillon crop in Brazil indicating that yields may be lower than expected.
In Vietnam, domestic prices continued to rise and broke through the VND120,000 per kilogram barrier earlier this week, reaching between VND122,500/kg and VND124,000/kg ($4.81-$4.87).
“Stock levels remain low in both producing and consuming countries, and this is compounded by ongoing climate problems around the world that are set to continue,” Escritório Carvalhaes notes in his latest report.
“World consumption is growing, with a strong increase in Asia. China is becoming more and more prominent, with its coffee imports increasing year after year.”
A further element of tension on the market is of a logistical nature and “is linked to the increase in fuel costs, the need to avoid passing through the Red Sea with the consequent increase in journey times and costs for ships coming from the East, the scarce availability of containers that persists worldwide, and the higher insurance premiums required on the basis of the risks connected to non-delivery,’ writes Altoga – Associazione Nazionale Torrefattori, Importatori di Caffè e Grossisti Alimentari (National Association of Coffee Roasters, Coffee Importers and Food Wholesalers) – in a note.
These facts “affect the total cost of coffee imports [to Italy] by up to 50% more than six months ago”.
