Coffee Prices Soar to 16-Year High

The price of robusta coffee has surged to a record high since 2008 due to concerns about supply shortages.

The threat of water scarcity could limit production in Vietnam, one of the largest exporters.

May contracts on the ICE exchange during Wednesday’s trading on April 3 rose by 4.8%, peaking at $3,838 per tonne.

By the end of April 3, ICE exchange trading closed up 4.1% to $3,812 per tonne. Coffee prices have risen by nearly 24% since the beginning of the year.

Coffee futures reached a new high in London trading due to concerns about shortages, according to Bloomberg.

Unusual heat threatens coffee production in Vietnam, one of the world’s largest exporters of this variety.

This has heightened concerns about a shortage of grains used to produce soluble beverages.

There are concerns about a possible shortage of water for farmers to irrigate coffee trees, which could affect yields next season.

The rally in the coffee market can also be attributed to panic buying by roasters, whose reserves are at a minimum as they have not replenished them in anticipation of lower coffee prices.

Vietnamese coffee production is also affected by farmers switching to other crops such as durian, avocado, and passion fruit.

According to the National Coffee Association, coffee exports may decrease by 20% this season, ending in September, compared to 1.67 million tonnes shipped the year before.

The harvest expected in Vietnam this year is unlikely to help improve supply.