Coffee futures prices rose to the highest level in 10 years amid shipping constraints and a decline in inventories.
- Futures prices for the arabica beans have rallied to $2.50 a pound, almost double the level at the start of the year, with the world’s largest producer and exporter, Brazil, recording shipping constraints.
- The Coffee Exports Council of Brazil said export volumes have declined by 24% in October versus the previous year, with analysts indicating that the increase in container freight rates has driven “just in case” buying.
- US Department of Agriculture officials stationed in Sao Paulo have also reported hoarding by farmers, further driving a further rally in prices, with the agency recording increased rates of default in major arabica producers Brazil, Colombia, and Ethiopia.
- Higher prices also come amid the likely drop in production volumes due to the La Niña phenomenon and concerns over the Omicron variant, possibly causing the resumption of lockdowns in Vietnam.
Source: Financial Times