Arabica coffee plunges 4% after new COVID variant emerges

Arabica coffee futures on ICE closed 4% lower on Monday as concerns about future demand after the new COVID variant led funds to reduce exposure to soft commodities.

March arabica coffee fell 4% to $2.33 per lb. The market had climbed to a 10-year high of $2.4820 last week.

Dealers said a pullback in prices was to be expected after the market’s recent strong advance, and fears regarding future demand as researchers evaluate the possible impacts of the new COVID variant provided the trigger for fund liquidation.

Prices remain underpinned, however, by tightening supplies following delays to shipments from Brazil driven partly by a shortage of container shipping capacity.

January robusta coffee fell 2.1% to $2,258 a tonne.

Vietnam’s coffee exports in the first 11 months of this year are expected to show a 4.4% drop from a year earlier to 1.36 million tonnes.