Bloomberg — The wholesale price of Robusta coffee has reached its highest level in 45 years amid a global supply crisis driven by drought in Vietnam, according to the International Coffee Organization.
The ICO wholesale price indicator rose 17% in April to the highest level since 1979, the group said in its monthly report.
Vietnam – the world’s largest producer of the Robusta variety, also called conilon – “continues to face supply difficulties” after weak production in the last and current harvest, he said. Brazil is the largest producer of Arabica coffee and the second largest producer of Robusta.
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The situation could get worse, with farming areas in Vietnam still battered by hot, dry weather that depletes water for irrigation. Rubusta futures in London are up 25% for the year, even after a sharp decline last week.
Robusta coffee price is the highest since 1979 |The ICO wholesale price indicator rose 17% in April. Source: International Coffee Organization
Prices fell last week on expectations that Vietnam’s coffee belt could start to recover this month and leveraged funds scaled back bets on further price rises.
The increased supply of Arabica beans also helps to moderate the supply crisis.
The ICO indicator is based on an aggregate of spot prices across major markets.
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