Friday 12 July 2024
  • La Cimbali

Robusta coffee futures surge to a 10-year high on renewed fear of a global supply shortage

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MILAN – Robusta futures rose posted yesterday their sixth consecutive gain reaching their highest levels in more than ten years. On the first notice day, the spot contract for November delivery closed up by 5.35% or $118 at $2,325, the highest level for the front month since July 2011. The benchmark contract for January delivery gained $75 to close at a record high of $2,270.

The main contract for December delivery in New York surged to an almost 2-week high of 208.10 cents per lb from last Friday’s low of 199.85.

Robusta futures prices are surging as a shortage of shipping containers is curbing coffee exports from Vietnam.

Dealers quoted by Reuters said the disruption to the flow of coffee from Vietnam was creating short-term supply tightness in the market, with front-month November commanding a large premium to January.

In addition to that, heavy rains in the Central Highlands that are negative at this point when harvesting approaches. Renewed outbreaks of COVID-19 could hinder harvesting operations when they get underway next month.

Fears of a global supply shortage have sparked fund buying of coffee futures so far this week this week.

“There’s a lot of interest in the (Robusta) certified stocks” Rabobank analyst Carlos Mera said in a phone interview for Reuters. “That’s replacement for the coffee that cannot be shipped on time from origin.”

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