Futures contracts for robusta coffee reached record levels driven by supply shortages

Futures contracts for robusta coffee on ICE saw a sharp increase of nearly 3% on Wednesday, reaching the highest level in at least 16 years. This upward movement was primarily driven by increased focus on supply shortages in key producing countries. The May robusta coffee closed the day with an increase of $94, or 2.7%, reaching $3,559 per ton. This price marked a significant milestone, reaching the highest level since the current contracts began trading in 2008.

The situation in Vietnam, the largest producer of robusta coffee, is a key factor in this scenario, where local farmers and traders are reluctant to sell their stocks, preferring to wait for even higher prices. Additionally, in Brazil, another major producer of robusta coffee, the availability of conilon coffee remains limited until the start of the next harvest in April. These elements contribute to increasing pressure on robusta coffee prices, reflected in the futures market.

On the other hand, arabica coffee had a more stable performance, with May contracts closing nearly unchanged at $1.8805 per pound. Although arabica coffee did not experience the same significant increases seen in robusta coffee, market dynamics remain fluid, with traders closely monitoring supply and demand conditions, especially amid ongoing concerns about robusta coffee scarcity.

Source: Investing.com