used in instant coffee and as a blend in espressos

Cocoa’s head-spinning rally has captured much attention this year, but coffee is having a moment too. The cost of robusta, the bean variety used in instant drinks and some espresso blends, recently reached the highest in more than four decades.¹⁾

Indonesia, the third-ranked robusta producer

Vietnam coffee exports continue to benefit from the rise in Robusta coffee prices, primarily due to the supply shortages.²⁾

Robusta coffee prices extended losses for a seventh consecutive session yesterday on prospects of improving weather conditions this week in major producer Vietnam.³⁾

Also supporting prices is high demand for robusta beans. Typically, a rise in robusta prices encourages a shift toward using more arabica in blends, but that isn’t happening at this time, Andrea Illy, chairman of Italian coffee roaster Illycaffe SpA, said Tuesday on Bloomberg Television.⁴⁾

“Coffee prices for robusta heavy product blends remain at a substantial discount to arabica containing blends and thereby consumers seeking value continue to choose the former for now,” the report said.⁵⁾

London robusta futures, a global benchmark, have reached a record high, reflecting the mounting pressures on the coffee supply chain.⁶⁾

Record exports in the prior season from Brazil, the world’s second-largest robusta producer, are offsetting the robusta supply shortfall in Asia, but output from the country is also expected to drop in 2024/25. Severe drought and heat waves last fall reduced crop potential, Volcafe said.⁷⁾

Meanwhile, harvests in Indonesia are expected to start this month or the following, marking a “substantial delay from the norm” due to droughts caused by El Nino, according to a Friday report from the US Department of Agriculture.^{8) 9)}

Better weather is expected to support a recovery in output next season for Indonesia, the world’s fourth-biggest coffee producer, which primarily grows the robusta variety. Production is seen rising 14% to about 10 million bags in 2024, the Association of Indonesian Coffee Exporters and Industries said Monday.¹⁰⁾