Robusta coffee edges higher as supplies tighten

Robusta coffee futures were higher on Wednesday, edging up towards last week’s 10-year high as supply chain issues increased the appetite for exchange stocks.

March robusta coffee rose 0.4% to $2,353 a tonne by 1421 GMT. The benchmark second position reached a 10-year high of $2,381 last week.

Dealers said that supply chain issues, including a shortage of container shipping capacity, had slowed the flow of robusta coffee from top producer Vietnam.

Vietnam’s coffee exports in 2021 are expected to show a drop of 2.7% to 1.5 million tonnes, government data showed on Wednesday.

Valid ICE robusta stocks stood at 99,020 tonnes, as of Tuesday, down from 106,920 tonnes a month earlier.

Dealers noted that January’s premium to March LRC-1=R had been widening as traders holding short positions in the front month opted to cover rather than tender coffee. It was around $118 a tonne on Wednesday.

No coffee was delivered on the January contract’s first tender day on Tuesday.

March arabica coffee rose 0.2% to $2.26 per lb.

Dealers noted continuing rains in Brazil’s coffee belt, boosting cherry growth and helping to improve soil moisture after a drought this year.