Cocoa Rally Is Spilling Into Coffee as Traders Run Out of Cash
- Robusta’s market moves are drawing comparisons to cocoa
- Marex says both commodities may have drawn big margin calls
A coffee farm in Vietnam.
Photographer: Maika Elan/BloombergThis article is for subscribers only.
Cocoa and coffee have become intertwined this year, with extreme weather and shortages fueling rallies of both commodities that test the limits of traders.
Just like cocoa, the coffee market is facing severe shortages. And, like cocoa, coffee production is concentrated in two countries. More importantly, many major traders deal in both commodities, so soaring cocoa prices are squeezing those market players for cash and forcing them out of coffee trading.