Robusta Coffee Extends Rally to Four-Year High on Crop Woes
(Bloomberg) -- Robusta coffee climbed to a fresh four-year high and arabica rose on concerns that heat and dryness will further threaten crops in Brazil.
Futures have advanced this year as drought and then frost hit crops in top coffee producer Brazil, while supply worries in Vietnam and Colombia have also supported prices. Dry weather and high temperatures will likely worsen crop stress in Brazil’s arabica regions this week, according to Somar Meteorologia.
“It is still uncertain how much the flowering and crop will suffer from the severe frosting in key arabica-growing areas of Brazil. This is also lending support to the robusta price,” Commerzbank AG analyst Michaela Helbing-Kuhl said by email. Plus, the Covid-19 pandemic “and the container shortage will be hindering shipments from Vietnam for the foreseeable future,” she said.
Robusta rose 1.3% to $2,109 a ton in London, after earlier reaching the highest since August 2017. Arabica gained 1.7% to $1.9635 a pound in New York as the market reopened after Monday’s holiday, snapping a four-session loss.
Colombia’s coffee output in August dropped 16% from a year earlier, the nation’s coffee growers federation said, citing logistics issues.
In other soft commodities, raw sugar fell 0.4% to 19.55 cents a pound, while cocoa advanced 0.6% in New York.
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