What’s happening: Futures for robusta coffee, which is often used to make espresso, recently jumped as high as $2,024 per tonne, their highest level in four years. Analysts are pointing to adverse weather in Brazil as well as Covid-19 restrictions in Vietnam.
“Brazil is the largest coffee producer in the world,” Warren Patterson, ING’s head of commodities strategy, told me. “They’ve been hit with quite a bad drought this year and it’s been followed by frost,” which has seriously harmed the country’s coffee trees.
Arabica futures for December are up 3% this month after climbing 18% in July.