One of the few commodities to escape virtually unscathed from the coronavirus panic is coffee. Coffee prices have risen sharply in recent weeks, thanks largely to tightening supplies and short covering. In this report, we’ll review the key fundamental factors which point to coffee’s longer-term bull market remaining intact in the months ahead.
Since bottoming in early February, coffee futures prices on the ICE have risen by some 24%. This is in utter contrast to recent performances for other soft commodities in recent weeks, including sugar (down 13%), cocoa (down 10%) and cotton (down 14%). Of course, the biggest underperformer among major commodities since the coronavirus panic began in January has been crude oil (down 31%), which has weighed heavily on the broad natural resources market.