However, Rabobank argued that the robust coffee market is “nearly the peak” of an output deficit, and only a “very good” Vietnamese crop could bridge the deficit.
“The robust market will be tight” until supplies from this harvest hit export markets in December, Rabobank said.
The bank projected that world production for robusta will fall into a deficit in 2017 to 2018 at 2.9 million bags, or 200,000 bags smaller than previously expected, but following on from a deficit fro last season pushed higher to 3.8 million bags, according to Agrimoney.
Meanwhile, robust futures are trading in “backwardation” where nearby contracts trade higher than later-dated contracts, reflecting rising demand for supplies. Consequently, pricing could be volatile if the Vietnamese crop is delayed due to rains, with backwardation steepening.
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