Suez Canal Blockade, Europe Faces Shortage of Robusta Coffee Beans for Instant Coffee!

Robusta Coffee Prices Rebound from Two-Week Low Amid Suez Canal Blockage

Robusta coffee prices rebounded from a two-week low as market forecasts indicate the Suez Canal blockage will further disrupt already severely constrained shipping routes. On March 26, Robusta coffee's May futures contract surged 2.8%, marking the highest increase since March 9, with the last trading in London rising 1.9% to $1,391 per ton.

The blocked Suez Canal represents a critical shipping route for East African and Asian countries entering Europe. The transport disruption means vessels can only dock at ports like Antwerp and Rotterdam until the waterway clears. Alternatively, ships may choose to detour around the Cape of Good Hope, adding 19-24 days to their journey depending on vessel type and speed. For ships that haven't yet reached the Suez Canal, a timely detour around the Cape would still require at least 8-10 additional days. With global container transport already strained, Vietnamese Robusta coffee beans ordered by European traders have been significantly delayed, and this blockage has created a tense situation for Europe's Robusta coffee inventory.

As the main shipping route for European imports, the Suez Canal blockage creates approximately one week of logistics delays for every day or two of continued obstruction, according to the logistics director at Sucafina SA. Market forecasts suggest the Suez Canal may take days or even weeks to restore navigation. Based on this timeline, all logistics through this route will face delays of at least two to three weeks or more.

Currently, Europe's Robusta coffee inventory is extremely tight, with most European coffee roasters' stocks insufficient to support two to three weeks of delays. Only Robusta from Brazil and Ivory Coast can reach Europe without passing through the Suez Canal, but Brazil's Robusta coffee harvest won't begin until late March at the earliest, with concentrated exports not expected until May. Therefore, if the Suez Canal cannot quickly resume navigation, there may be shortages of raw materials for instant coffee. Consequently, Vietnamese Robusta coffee bean prices in Europe's spot market have risen sharply, reaching as high as $450 per ton—three times the normal price.

Carlos Mera, a London-based analyst at Rabobank International, stated that if the canal issue can be resolved within a week, Robusta futures prices will not continue to rise, as Robusta contracts more strongly reflect Brazil's economic growth rather than Vietnam's Robusta production. If the problem persists longer, Robusta coffee bean market prices may continue to climb. However, analysts believe the Suez Canal blockage will be cleared before the first notice day for Robusta's May contract (late April).

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