The surge in cocoa has sometimes overshadowed the very real surge in coffee, particularly Robusta. The price of Robusta rose 16.8% to $193.65 cents per pound in April, the highest level in 45 years since July 1979 when it averaged $195.90. cents per pound, observes the International Coffee Organization (ICO) in its latest market report. The “unloved” of the coffee market, Robusta has approached Arabica, a coffee known to be of better quality and always much higher in terms of price.
Evolution of the price of Robusta in London
Since the end of 2023, Robusta prices have been on an upward slope which has accelerated over the last two months, gaining 40% to reach a record of $4,338 per tonne in London on April 25. Since then, like cocoa, the market has undergone a correction with the liquidation of the long position of funds as well as the increase in stocks. Today, the London contract was trading at $3,281 per tonne at midday.
But, again like cocoa, the fundamentals have hardly changed. The world’s leading producer of Robusta, Vietnam, is facing supply difficulties due to poor coffee harvests in 2022/23 and 2023/24 and there are concerns for the 2024/25 campaign. Already the Vietnamese Ministry of Agriculture estimated in March that coffee production could fall by 20% in 2023/24 to 1.472 million tonnes (Mt).
As for Brazil, a major producer of Robusta, the harvest that will arrive on the market would have smaller grains due to the drought that has prevailed. According to initial indications, production could be reduced by 5 to 10%.
Robusta and African exports on the rise
Exports of green coffee beans from Robustas increased by 7.8% to 5.04 million bags in March 2024 compared to March 2023. Over the first six months of the 2023/24 coffee year, they are up by 8.9%, to 25.16 million bags. The main driver of the increase in Robustas in March was Brazil, which shipped 0.85 million bags compared to 0.11 million bags in March 2023, up 686.1%.
As for Africa’s coffee exports, they climbed 12.6% in March to 1.19 million bags with Ethiopia at the heart of the rise, its own exports increasing 112.8% compared to March 2023. Over the first six months of the 2023/24 coffee year, they increased by 0.6% to 6.22 million bags.
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