Coffee jumps 4% on supply chain worries due to the coronavirus

Arabica coffee futures jumped 4% in New York as worries about potential disruptions to the supply chain due to the coronavirus outbreak raised fears of occasional shortages.

May arabica coffee closed up 4% to $1.1270 per lb, posting another strong session after having closed up 5% on Wednesday.

Dealers and traders said there was talk of possible difficulties in the supply chain as a result of the coronavirus outbreak.

ICE Europe has cut cocoa and coffee delivery limits due to potential disruptions linked to the pandemic.

One U.S. importer said Honduras main coffee port of Puerto Cortes had stopped operations, but the port’s operator Operadora Portuaria Centroamericana (OPC) denied it.

Strong retail coffee demand, as people stock up, was seen supportive as well, said U.S. trader Christian Wolthers.

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“Supermarkets and roasters are asking for anticipation of deliveries, they are trying to guarantee supplies,” he said.

ICE certified stocks KC-TOT-TOT totalled 2.08 million bags at the last count, versus 2.18 million at end-January.

Soaring arabica premiums in the physical markets are deterring traders from delivering coffee to the exchange where it commands little, if any, mark-up.

May robusta coffee lost $11 to $1,216 a tonne.

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Source: Reuters.com

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