On Top of More Expensive Cocoa, Coffee Prices Also Showed Upward Momentum on Weather Conditions in Vietnam and Brazil

On Wednesday, April 3, May Arabica coffee (KCK24) surged almost 3% to close +5.85, and May ICE Robusta coffee (RMK24) closed up +149 (+4.07%). Today, on April 4, both blends are further advancing by ~+1.6%.

Coffee prices are rising sharply for the third day in a row, with Arabica coffee hitting a 3.5-month high and Robusta coffee prices reaching new highs. Fears that low tide in Vietnam will limit Robusta production have led to higher prices and supported Arabica coffee prices. Coffee importers lament that “…weather conditions in Vietnam are deeply concerning, and there are even greater concerns about possible shortages of irrigation water, which may affect coffee production not only during the ongoing, but the next season, too.”

In its turn, Arabica coffee prices have been on the rise since Monday on concerns that recent heavy rains in Brazil's coffee-growing regions could damage the crop. The Somar Meteorological Office reported on Monday that the Minas Gerais region of Brazil received excessive rainfall last week, at 335% of the historical average. Minas Gerais region produces about 30% of Brazil's Arabica coffee.