2019 the price of robusta coffee beans plummeted, near a nine-year low

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Under the pressure of oversupply and low exchange rate in Brazil, the futures price of Robusta, which is mainly used for instant coffee, fell in intraday trading on the 6th, close to a nine-year low and has fallen 4.8 per cent this week.

The November futures price of ICE Robusta coffee beans fell 0.2 per cent to $1270 a tonne on the 6th; the futures fell to an annual low of $1262 a tonne on the 5th, the lowest since 2010. Robusta coffee futures have fallen 17% this year.

The International Coffee Organization (ICO) expected this week that the supply surplus of 2018-2019 seasonal coffee beans will increase by 26% to 4.96 million bags, and the bumper harvest will continue to push up inventories, making the global coffee beans in this season likely to be oversupplied for the second year in a row, dragging down coffee prices. Brazil's real fell to a nearly one-year low against the dollar this week, encouraging major local producers to expand exports and hitting market confidence.

Fund managers have been betting on a fall in the price of robusta coffee beans since the end of last year, and although the net short position has been reduced slightly recently, the short position is still the biggest, and speculators are also bearish on Arabica beans. From a technical point of view, there is no reason for a sharp rebound in coffee bean prices recently. Coffee futures prices have fallen below the key moving average and the relative strength indicator (RSI) shows no signs of being oversold.

A drop in the price of coffee may be good for roasters, because the lower cost of buying coffee beans will increase the pressure on coffee farmers.

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