“Rare Coffee Variety Hits Highest Prices Since the 1970s, Dealing a Blow to Instant Brews”

According to the International Coffee Organization (ICO), Robusta coffee prices have surged to their highest level in 45 years, driven by a supply shortage for the variety commonly used in espresso blends and instant coffee.

The ICO’s measure of wholesale prices recorded a 17% increase in April, reaching its highest level since 1979, as reported in their monthly update released on Friday.

Vietnam, the world’s largest producer of Robusta coffee, continues to grapple with supply challenges exacerbated by poor harvests in recent seasons.

The situation is compounded by ongoing drought and heatwaves in Vietnam’s coffee-growing regions, leading to water shortages for irrigation and dimming prospects for the upcoming 2024 crop.

This persistent supply squeeze has fueled a steady climb in futures prices on the London market over the past six months, raising concerns about potential consumer cost impacts.

However, there are signs that Vietnam’s coffee belt may begin to recover from drought conditions this month, offering a glimmer of hope for supply relief.

Additionally, hedge funds are scaling back their bets on further price increases, while the availability of arabica beans has provided some moderation to the upward price trend.

The ICO’s price index aggregates spot prices from major coffee markets to gauge overall market conditions and price trends.

Author:- Apoorva Arora