Cocoa and coffee reach new highs on fear of aging trees; Vietnam crops among in concern

HANOI (Bloomberg): Cocoa and coffee futures reached new highs on mounting concerns of extreme weather, while aging trees in Africa cocoa crops and Vietnam coffee areas added to concerns.

"Speculators are drawing parallels between cocoa and coffee, which is a bit surprising,” Rabobank analyst Carlos Mera said, adding that trees getting older in Vietnam is one of the reasons coffee production in the country is not expanding.

New York cocoa futures rose to the highest in data going back to the 1960s, extending a rally driven by declining production in top-growers Ivory Coast and Ghana. Gains for most-active contract accelerated after prices broke the $10,000 mark, a level that hasn’t been seen since almost two weeks ago.

Dryness in Vietnam is expected to drive a deficit in robusta markets for the season starting in October, while for cocoa the dry weather and disease spread are causing a massive shortage

Robusta coffee settled at a new high in London on worries that poorer output in top-producer Vietnam will fuel bean shortages. Futures for robusta, the cheaper coffee type used in instant drinks, rose 1.6% to the highest in data going back to 2008.

The coffee market also has been supported as hedge funds exit the cocoa market - where big shortfalls have sent prices soaring - and pile into coffee.

As investors cut bets on cocoa, the amount of outstanding contracts declined. Aggregate open interest for cocoa New York futures hit the lowest since 2011, according to exchange data compiled by Bloomberg.

-- ©2024 Bloomberg L.P.

Follow us on our official WhatsApp channel for breaking news alerts and key updates!

Coffee , Cocoa , Futures , New Highs , Aging Trees


Next In Aseanplus News

SQ321 flight turbulence may leave survivors with trauma; recovery may take months or years: Experts
Myanmar aims to earn over US$800mil from aquatic exports
Indonesia increases vigilance following spike in Covid-19 cases in Singapore
Srettha confident of making his case before Constitutional Court
US, China lock horns in renewed debate over Taiwan’s UN status
Plane involved in SQ321 incident returns to Singapore
Govt has picked new EC chairman, says PM
Young engineer loses more than RM150,000 to scam involving cryptocurrency
Finance Minister II to explain diesel subsidy further soon, says Anwar
Fire kills six newborns at baby hospital in India's capital

Others Also Read