Coffee prices soar to highest level in 16 years

Robusta coffee prices have soared to their highest levels since 2008 due to fears of supply shortages. Water shortages may limit production in Vietnam, which is one of the largest coffee exporters.

Robusta coffee prices have soared to their highest levels since 2008. May contracts on the ICE exchange during trading on Wednesday, April 3, rose in price by 4.8 percent to peak prices of $3,838 per ton.

By the end of April 3, trading on the ICE exchange closed with an increase of 4.1 percent to $3,812 per ton. Since the beginning of the year, coffee prices have risen by almost 24 percent.

Coffee futures rose to a new high in London against the backdrop of fears of shortages, Bloomberg said. Rising temperatures and anomalously hot weather threaten coffee production in Vietnam, one of the world's largest exporters of robusta coffee. This has heightened concerns about shortages in the supply of coffee beans used to make instant drinks.

There are concerns about water shortages to irrigate coffee trees, which could affect harvests next season.

In Vietnam, farmers switch to other crops such as durian, avocado and passion fruit. Coffee exports may thus go down by 20 percent this season, which ends in September, from 1.67 million tons shipped a year earlier, the National Coffee Association said.