troutbait| Commodities surge one after another: Important coffee futures hit their biggest intraday gain since 2010

Wall Street News He Hao

London Robusta coffee futures surged 7%, the largest intraday gain since 2010. Analysts say Brazil, the world's largest coffee producertroutbaitExports of Robusta and Arabica coffee are both strong, but uncertainty about the supply of Robusta in Vietnam has attracted hedge funds and pushed prices higher.

Important coffee futures surged on Tuesday, with London's Robusta coffee futures surging 7%, the largest intraday gain since 2010, and Arabica coffee also gaining 6%. Investors are increasingly worried about the impact of the drought on coffee bean production in Vietnam, a major producer.

Although prices fell back earlier this month, overall this year, the price of Robusta coffee beans used in instant coffee has risen sharply as drought has affected production in Vietnam. Rainfall has helped improve supplies in the coffee market, but more rainfall may still be needed to further improve supplies.

Another reason for the surge in the price of Robusta coffee beans is the high demand for them. Generally speaking, rising prices in Robusta will cause people to use more Arabica coffee, but this has not happened so far.

Industry insiders point out that Arabica has not clearly replaced Robsta, which is a rather unique market dynamic. For certain methods of making, such as instant coffee, Robsta is even more important. Climate change has made coffee supplies less reliable, with unstable dynamics and higher base prices in stocks of coffee beans.

Analysts at Rabobank said in the report that Brazil's Robusta and Arabica coffee exports, the world's largest coffee producer, are strong. But uncertainty about the supply of Robusta in Vietnam has attracted hedge funds and pushed prices higher.

Meanwhile, a U.S. Department of Agriculture report on Friday said harvests in Indonesia are expected to begin this month or next, a significant delay than normal due to drought caused by El Niño. Better weather is expected to support Indonesia's recovery in production next season. Indonesia is the world's fourth largest coffee producer, mainly growing Robusta coffee. The Indonesian Coffee Exporters and Industry Association said on Monday that production is expected to increase by 14% in 2024 to about 10 million bags.

Risk warnings and exemption clauses

The market is risky and investment needs to be cautious. This article does not constitute personal investment advice, nor does it take into account the specific investment goals, financial conditions or needs of individual users. Users should consider whether any opinions, opinions or conclusions contained in this article are consistent with their specific circumstances. If you invest accordingly, you will be responsible.