Home Coffee prices Robusta coffee peaks in 2017 as buyers seek swap stocks

Robusta coffee peaks in 2017 as buyers seek swap stocks

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(Bloomberg) – Robusta coffee, the type used in instant drinks, has hit its highest level in more than four years, with buyers looking to take beans from swap warehouses to replenish inventory.

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Futures have jumped nearly 60% in London this year as inclement weather hurt harvests, while logistics issues, including a shortage of shipping containers, hampered exports from Vietnam. Nestlé SA, owner of the Nescafé brand, told investors and analysts last week that coffee would become more expensive next year as input costs rise.

Robusta rebounded to 3.7% in London on Monday. The payoff precedes traders having to declare their intention to take delivery or deliver against the November contract.

“The first day of notice is tomorrow, so you would expect some volatility, especially in the first month contract. This seems to be what we are seeing today, ”Rabobank analyst Carlos Mera said over the phone. “There is a lot of interest in certified stocks – it’s the replacement of coffee that cannot be shipped on time from origin. “

Robusta for January delivery rose 2.5% to $ 2,195 per metric tonne in London, after hitting its highest price for a busiest contract since February 2017. Meanwhile, the arabica – la variety preferred by coffee chains – increased by 2%.

“The more the coffee market grows, the more pressure there will be on shorts margins, which could lead to more forced short sell-offs,” Charles Branch, head of commodities and materials, said by email. agricultural commodities at Britania Global Markets Ltd.

Short hedging by traders usually helps raise prices.

In other soft drinks, raw sugar rose 1.6% and cocoa futures 1.3%, up for the third day in a row in New York. Cotton futures rose 0.3%.

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