Rising again! Robusta coffee futures prices are close to the $4000 mark

Earlier, the futures prices of Arabica coffee beans and Robusta coffee beans rose. Among them, the futures price of Arabica coffee beans climbed 12.5% to the highest level since October 2022.

However, coffee prices began to fall slightly a few days ago, but have risen again in recent days, with Arabica coffee prices reaching their highest level in 18 months, reaching 226.85 cents per pound. The price of Robusta coffee also reached a new high, with the pre-sale price rising as high as $3975 / ton in July 2024, close to the $4000 mark, and then falling to the final closing price of $3949 / ton, up 2.52%.

Such a rise in prices is affected by logistics. In addition, Brazil and Vietnam, the largest coffee producers, are affected by the drought, resulting in a tight supply of coffee and a shortage of stocks. According to data released by the Vietnam Coffee and Cocoa Association, Vietnam is still affected by drought and high temperatures, with local temperatures 1-3 degrees Celsius higher than last year, and the coffee industry is facing problems such as a shortage of water resources and reduced land resources. as a result, coffee production is expected to be 20% lower than the previous year's 1.84 million tons, while exports will be 20% lower than the 1.67 million tons in the same period last year.

In addition, there is a 60% chance that La Nina will occur in August in the second half of the year between El Nino, according to data such as the U.S. Government Climate Prediction Center. In general, La Nina phenomenon will strengthen convective activities in Southeast Asia, storms and rainfall processes will increase unusually, which can easily lead to floods and other disasters.

In addition, Brazil is also affected by the weather. The cumulative rainfall in the Robusta coffee region of Brazil in 2023 is at its lowest level in a decade. Although the first rainfall has recovered in 2024, it is not enough to make up for the impact of the drought in 2023. The coming La Nina weather is likely to reduce rainfall and cool weather in southeastern Brazil and increase rainfall and humidity in the northeast. The cold weather will cause a sharp drop in temperature in coffee-producing areas, which will bring frost disasters and damage coffee production in the current season and future seasons.

The harvest time of Vietnamese coffee is about between October and January of the following year, if La Nina phenomenon appears, it will seriously affect the output of Vietnamese coffee in the new production season. As a result, recently, local coffee traders are stepping up their efforts to buy coffee beans to ensure their inventory, while local purchase prices have soared to 110 million dong to 113 million dong / tonne. At the same time, Brazilian traders are also stepping up efforts to buy Robusta, so the spot price of Robusta coffee in Brazil rose to 1025 reais per bag (60 kg), breaking the 1,000 yuan mark for the first time.

And there is another potential crisis, the conflict between Israel and Iran. On the night of April 13, 2024, Iran fired dozens of missiles and drones at Israeli targets. Later, the Israeli president said that Israel did not seek "war with Iran", but that the attack "must be responded to."

However, Iran is one of the major oil producers in the world, while the Middle East is the world's most important source of oil supply. If Iran and Israel continue to conflict, the market fears that future oil sanctions against Iran may be stricter, leading to a reduction in oil supply, leading to a surge in oil prices, which will have a negative impact on the global transport industry. As a result, the trade in coffee, which relies on rail and shipping, will further push up transport costs, and so will the price of coffee.