Coffee is a good victim of the Corona virus

Coffee is a new victim of Corona, at a time when the Corona virus has negative effects on the performance of all assets from stocks to commodities, coffee contracts have also not escaped the violent downward wave that has hit the markets, since the outbreak of the crisis earlier last month, according to what I mentioned The Financial Times newspaper.

The benchmark coffee futures index on the London Mercantile Exchange has fallen by more than a fifth of its value around the $XNUMX per pound level since the beginning of this year.

The loss suffered by coffee contracts is greater than the losses of oil, which amounted to about 17% and copper to 9%, and the reason for this, according to the newspaper, is that China is one of the largest importers of coffee in the world, with a steady rise in the volume of its imports over the past decade, an increase of nearly three times.

China consumes about 2% of global coffee consumption, according to data from Rabobank.

The global chain "Starbucks" closed more than half of its 4300 branches in China, while the "Lukin" chain closed all its branches in the city of Wuhan China is the epicenter of the deadly epidemic.

“The closure of these chains caused a state of fear and caused a drop in coffee prices in global markets,” said Carlos Mera, commodities analyst at Rabo Bank. “.

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Starbucks shares have fallen by about 6% since the beginning of this year, while "Lukin" shares have lost about a third of their value, according to the newspaper.