Besides supply, the recent jump in coffee prices is also linked to the performance of other markets. Highlight on WTI oil, which in the last month of October rose 11%, also sending the CRB commodity index up (+3.8%). Arabica coffee on the NY terminal rose 5% in October, and robusta 1.9% in London. This year to date, WTI oil sustains significant gains of 73%, which stimulates a 42% increase in the CRB index. Oil accounts for 23% of the CRB index.
In general, agricultural commodities have performed very well in 2021, especially coffee, which has gained 59% for arabica and 55% for robusta. The shortfall in the Brazilian crop, which resulted in a deficit in the global supply in 21/22. The problems with drought and frost, which reduced the potential of Brazil’s 2022 crop, justify a good part of this hike. But the oil performance also influenced the rally of coffee, whose prices were very low at the end of 2020. It is good to remember that coffee was then flirting with the dangerous level of 100 cents in November last year while now it is surpassing the 200-cent level.