Robusta Coffee Rebounds From Two-Week Low Amid Suez Threat
(Bloomberg) -- Robusta coffee rebounded from a two-week low on concerns that cargo hold-ups due to the blocked Suez Canal could further hamper a stretched supply chain.
European coffee roasters were already struggling to get supplies from top robusta producer Vietnam because of a global shipping container crunch, and all of the beans Europe imports from East Africa and Asia flow through the key waterway. The disruption means boxes will not only be stuck at ships in the canal, but will back up at ports like Antwerp and Rotterdam when traffic clears up, said Hans Hendriksen, who has traded cocoa and coffee for four decades.
The canal blockage “is a concern to the already stretched robusta supply chain from Southeast Asia,” said Carlos Mera, an analyst at Rabobank International in London. Still, “as long as it the problem is over in a week, it should not cause a sustained increase in futures prices, as the robusta contract reflects more the availability of Brazilian conillions than that of Vietnamese robustas.”
Robusta coffee for May delivery rose as much as 2.8%, the most since March 9, and was last up 1.9% at $1,391 a ton in London. Arabica coffee also advanced in New York.
“If the problem takes longer and we see a depletion of the certified stocks, then the robusta market may climb higher,” Rabobank’s Mera said. “But in principle we assume the problem will be resolved well before the first notice day of the May contract at the end of April.”
The Suez disruption comes as the coffee market is facing a global deficit amid a lower arabica-crop outlook in top grower Brazil. At the same time, a global container shortage has pushed U.S. coffee stockpiles to a six-year low.
In other soft commodities, cocoa fell in London and was little changed in New York. Raw sugar rose.
©2021 Bloomberg L.P.