(资料图片仅供参考)

File Photo/NBD

Recently, due to high inflation and other factors, the prices of Robusta coffee beans and Arabica coffee beans have soared. The futures price of Robusta coffee beans reached a new high of $2,783 per tonne at the end of May, setting a 15-year high, according to CCTV.

Data from the Intercontinental Exchange in the United States, the futures price of Robusta coffee beans for delivery in July is now around $2,600 per tonne, still at a high level.

Photo/Investing.com

Robusta coffee beans are known for their bitterness and contain more caffeine than higher-quality and more expensive Arabica coffee beans. Public information shows that Robusta coffee beans account for 40% of global coffee production, while Arabica coffee beans account for the remaining 60% of global coffee production. However, Arabica coffee beans are generally considered to be of higher quality than Robusta coffee and are more expensive.

As demand for cheaper Robusta coffee beans soared, the premium of Arabica coffee beans relative to Robusta coffee beans gradually fell to its lowest level since 2019.

Judith Ganes, president of J Ganes Consulting and senior adviser to the Asian Coffee Association, pointed out in an interview with NBD that the market is having an oversized reaction. Both Vietnam and Indonesia should see improvements in production next season with El Niño usually less of a problem then La Niña. Some of the shortfall in Vietnam is not from lower output but producers not willing to sell and/or exporters upside down in payments with tighter credit, higher rates and strong domestic quotes. The Brazilian crop problems are not likely to be as devastating as the rumors that have been circulating.

Shawn Hackett, president of Hackett Financial Advisors, a commodity brokerage firm, believes that it is not uncommon for Robusta coffee bean production in Vietnam and Indonesia to fall by 20% in years when the El Nino phenomenon occurs.

NBD noticed that just this past May, Southeast Asia experienced record-breaking high temperatures. For example, Tuong Duong District in northern Vietnam, one of the main coffee-producing countries, had a maximum temperature of 44.2°C in mid-May, the highest temperature ever recorded in the country.

Hackett said in an interview with NBD that“there is already an imbalance between supply and demand for global coffee beans at present, but this year’s harvest in Vietnam will help alleviate the shortage of coffee beans later this year.” However, he also pointed out that at present, El Nino climate phenomenon has not affected the yield of coffee beans because we are still in the early stage of this extreme climate phenomenon. Therefore, the impact of this extreme climate on crops may not appear until the season harvested at the end of 2023.