The price of Robusta coffee, at a new historical high

Robusta coffee futures hit a new record high on the London Stock Exchange on Friday, amid fears that the poor harvest will cause a shortage of coffee beans, according to Bloomberg.

The price of Robusta coffee, the cheaper variety used for instant coffee, rose 2.4% on Friday to the highest level since data collection began in 2008. Last week, the price of coffee rose 5.4%, boosted by by the lower production in Vietnam, the largest grower of Robusta coffee, as well as by the reduced level of stocks.

Even though Vietnam has enough Robusta coffee beans to cover exports for the rest of the season, some farmers may limit sales in anticipation of higher prices, says Do Ha Nam, president of Intimex Group, Vietnam's largest coffee exporter. .

The coffee market was also supported by the exit of speculative funds from the cocoa beans market, where the supply crisis led to the explosion of prices. The funds in question focused on the coffee market.

"Speculators draw parallels between cocoa and coffee, which is a bit surprising," says Carlos Mera, an analyst at Rabobank, adding: "The main parallel I can draw is that all the coffee trees have aged due to the lack of work in field and because of this we see that Vietnam's harvest is no longer growing".

According to Bloomberg, there are growing concerns about next season's coffee production, as the weather in Vietnam is expected to remain dry for the next period, which would put additional stress on the crop, say analysts from the firm Maxar forecast. In addition, the upcoming European rules on products resulting from deforestation could trigger a rush to buy before the end of the year, when the new rules will come into force, concludes Carlos Mera.