Robusta's Upward Trend Interrupted after Reaching Historic Levels

The strong upward trend in robusta coffee prices was interrupted on Thursday, resulting in a drop in futures contracts on ICE. This reversal occurred after prices reached the highest level in over 16 years, reflecting concerns about tight supply, especially in Vietnam, the world's largest producer of robusta. The May contract for robusta coffee closed at $3,766 per ton, after reaching a peak of $3,849, signaling the volatility of the coffee market in response to supply and demand conditions.

In addition to concerns about supply in Vietnam, delays in the harvest of robusta coffee in Indonesia further increased uncertainty about grain availability. This scenario fuels expectations that farmers will await higher prices before releasing more grains, as highlighted by Nguyen Ngoc Quynh, Vice-Director of the Vietnam Commodity Exchange. Meanwhile, Brazilian farmers are preparing for a larger robusta coffee crop, coinciding with record local prices, which could further influence market dynamics in the coming months.

However, arabica coffee prices had a distinct performance, reaching the highest level in 18 months. This appreciation, of 3.15 cents, reflects a different trend from robusta coffee, suggesting different market dynamics for the two coffee varieties. The analysis of these movements highlights the complexity of the coffee market, driven by a variety of factors affecting production and global coffee trade.

Source: Investing.com