Historic Rise in Robusta Coffee and Climatic Challenges Drive Global Market

The robusta coffee market saw a remarkable 2% surge, closing at $3,790 per ton and reaching its highest level since the contract began trading in 2008. This significant increase reflects not only the growing demand for robusta coffee but also persistent concerns about supply, especially in Vietnam, one of the world's leading producers of this type of coffee. Restricted supply in Vietnam, combined with uncertainties related to current crop prospects, remained a key driver of robusta coffee prices.

Vietnamese traders warned of water shortages for irrigation in growing areas, raising concerns about potential production declines in the upcoming crop. This concern highlighted the vulnerability of coffee supply to adverse weather conditions, as production is highly dependent on factors such as adequate rainfall and good irrigation practices. These challenges place additional pressure on the global coffee market, exacerbating supply concerns and contributing to price volatility.

Meanwhile, arabica coffee also experienced a significant 2.2% increase, reaching its highest value in 18 months. This increase was partly driven by the rise in robusta coffee, as roasters adjusted their blends to incorporate more arabica coffee. This dynamic reflects the interconnection between the arabica and robusta coffee markets, where changes in one type of coffee can have significant impacts on the prices and trading strategy of the other.

Source: Investing.com