Tuesday 24 May 2022

Robusta coffee futures reached new highs on Thursday, main contract broke the $2.100 mark

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MILAN – Robusta coffee futures in London broke the $2.100 mark on Thursday. The main contract for November delivery of the ICE Robusta reached a new 4-year high of $2107. Logistical bottlenecks and a record surge in Covid-19 infections are hindering exports from Vietnam, the world’s largest producer of the cheaper variety. Moreover, the country is battling its worst outbreak since the start of the pandemic, and a lockdown in its exporting hub Ho Chi Minh City has affected overseas shipments of coffee and other goods, AP reports.

Vietnam’s General Department of Customs reported that Vietnam’s August coffee exports fell -4.5% m/m to 105,000 MT, and cumulative Vietnam coffee exports Jan-Aug fell -6.9% y/y to 1.071 MMT.

Vietnam’s Covid-19 lockdown has constrained the global supply of coffee — and coffee prices could remain “relatively high” through 2022, Fitch Solutions said in a report last week.

However, Covid restrictions could soon be progressively lifted, so disruptions to Vietnam’s coffee exports (mainly Robusta) are likely short-lived, the same source noted.

In other news, the Green Coffee Association reported that U.S. August green coffee inventories rose 0.9% on month, but fell 9.1% on year 6.130 million bags.

Cecafe reported Monday that Brazil August green coffee exports fell -28% y/y to 2,336,646 bags. Coffee exports since the beginning of the year were down 1.8% to 26,303,139, of which 23,799,608 of green coffee (-1%).

Brazil’s National Supply Company Conab on May 25 projected that 2021 Brazil coffee production would fall -23% y/y to a 4-year low of 48.8 mln bags. Conab will release its third estimate on September 21.

Vietnam’s coffee exports to the UK market have decreased significantly as its products fail to meet stricter requirements in terms of quality and consumption trends of British people, according to the Agency of Foreign Trade under the Ministry of Industry and Trade.

Statistics released by the International Trade Centre showed that the UK’s coffee imports in the first six months of this year reached 100,300 tonnes worth 424.62 million USD, representing a year-on-year fall of 13.8% in volume and a drop of 10.9% in value, the agency said.


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