Why are arabica and robusta futures rising right now?
Global coffee supply has tightened, and Vietnamese farmers, expecting higher prices, have slowed their selling. In the Central Highlands, spot quotes rose to 63,500 to 66,000 dong per kilogram, up from 59,900 to 60,500 the week before. On the London exchange, the March arabica contract settled at $1.8865 per pound after touching a seven-month high.
Robusta moved even more sharply, gaining a cumulative $228 in a week to reach $2,769 per ton after a 15-year peak of $2,810. The standoff between growers holding stock and buyers needing supply keeps spot trading quiet in Vietnam. What is robusta's role here: it sets the floor for the global market, so its rally pulls arabica prices along with it.
Recently, global coffee market supply has been tight. Vietnamese coffee farmers, expecting prices to continue rising, have reduced their shipments, leading to a quiet spot trading atmosphere locally. Meanwhile, the London and New York coffee futures markets have performed strongly, with both Robusta and Arabica prices showing significant increases, among which Robusta once hit a
According to overseas media reports, due to the shrinking coffee supply, growers generally expect prices to rise further and have therefore slowed down their selling pace, which has led to relatively sluggish trading activity in Vietnam's coffee spot market.
In Vietnam's most important coffee-producing region, the Central Highlands, the latest spot quotes have risen to 63,500 to 66,000 Vietnamese dong per kilogram (equivalent to about 2.62 to 2.72 US dollars), a marked increase from the previous week's level of 59,900 to 60,500 dong/kg.
Data provided by the London Stock Exchange show that as of Wednesday's close, the March arabica coffee contract rose 3.4 cents, or 1.8%, to settle at $1.8865 per pound, after touching a seven-month high of $1.9195 per pound during the session. Meanwhile, robusta coffee climbed by a cumulative $228 in a week to reach $2,769 per ton, after previously hitting a 15-year peak of $2,810.
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