(Bloomberg) -- Robusta coffee prices have climbed to the highest in 45 years, according to the International Coffee Organization, as a supply crunch intensifies for the variety used in espresso blends and instant drinks.
The ICO's gauge of wholesale prices rose 17% during April to the strongest since 1979, the London-based group said in a monthly report posted Friday. Vietnam — the world's largest robusta producer — “continues to face supply difficulties” after poor harvests in both the last and current seasons, it said.
Those issues risk worsening as drought and heat bake Vietnam's growing areas, depleting water for irrigation and curbing prospects for the looming 2024 crop. Futures in London have climbed in five of the past six months, which could eventually feed through into consumer costs.
Read More: Pricey Coffee Here to Stay as Hoarding, Heat Hit Vietnam Supply
Still, Vietnam's coffee belt could start to recover from drought this month and hedge funds are paring bets on further price gains. More plentiful supplies of arabica beans are also helping to temper the run-up.
The ICO gauge is based on an aggregate of spot prices across key markets.
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