Saturday 18 May 2024
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Robusta futures prices reach record highs on new estimates of a supply deficit for 2024/25

The most active contract for July delivery gained $28 to settle at $3,977 after reaching an intraday high of $4,036. July Arabica coffee was up 155 points and ended the day at 228.40 cents. Dealers say supplies in Vietnam are very tight while dry weather threatens to reduce the size of the next crop in the world's top Robusta producer

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MILAN – Coffee futures prices recorded on Tuesday another day of increases as concerns around tight supplies gained the upper hand on both market – in London, May ICE Robusta coffee closed up $31 to a new all-time high of $4,005.

The most active contract for July delivery gained $28 to settle at $3,977 after reaching an intraday high of $4,036. Marex Group Plc forecasts a global 2024/25 Robusta coffee deficit of -2.7 million bags due to reduced output in Vietnam.

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May Arabica coffee closed up 520 points at 236.75 cents per lb. The most active contract for July delivery was up 155 points and ended the day at 228.40 cents.

Last Friday’s weekly Commitment of Traders (COT) report showed funds boosted their long Arabica coffee positions by 9,560 net-long positions to a record 66,885 in the week ended April 9.

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However, the record-long position could also exacerbate long liquidation pressures in a price downturn, observes Barchart in a comment.

Dealers said supplies in Vietnam were very tight while dry weather threatens to reduce the size of the next crop in the world’s top Robusta producer.

In Vietnam’s Central Highlands, coffee prices are continuing their upward trajectory this week, with increases ranging from 1,500 to 1,700 VND/kg. Specifically, prices in Dak Nong stand at 115,500 VND/kg, Dak Lak at 115,400 VND/kg, Gia Lai at 115,300 VND/kg, and Lam Dong at 115,000 VND/kg. With this ongoing surge, Vietnamese coffee prices are expected to reach an unprecedented milestone of 120,000 VND/kg by the end of the week.

Large businesses in Vietnam have recently announced imminent shortages, even considering the need for coffee imports in the coming months.

This revelation has further fueled price hikes in countries like Brazil and Indonesia, where harvests are imminent.

CIMBALI

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