Coffee futures surged more than 6% on Monday, reaching a record-breaking $4.30 per pound on the ICE exchange, driven by rising fears of a coffee shortage. The spike in prices comes as reports highlight the impact of adverse weather conditions in Brazil, the world’s largest coffee producer.
Arabica coffee futures reached new highs for the 13th consecutive trading session, fueled by concerns over dry and hot weather in Brazil’s coffee-growing regions. Bob Fish, co-founder of Biggby Coffee, said, “Panic has finally shown up; prices will continue to rise.” He advised U.S. coffee shops to consider raising prices to protect profit margins from shrinking due to the increasing costs.
The export value of Brazilian green coffee is expected to jump significantly, reaching $9.9 billion in 2024, up from $7.3 billion in 2023, according to IndexBox data. The United States and Germany are expected to remain the largest buyers, with each country importing $1.7 billion worth of Brazilian coffee in 2024, followed by Italy at $873.7 million.
Brazilian coffee farmers are holding back on selling, having already sold 85% of this year’s crop. Analysts suggest this reluctance is partly due to farmers’ strong financial positions, which allow them to weather current market pressures.
Despite the record prices, there is some optimism that Brazil’s next harvest could improve supply, with an expected 64.1 million bags in the 2025/26 season. Meanwhile, robusta coffee prices also rose 2.4%, reaching $5,697 per ton. In contrast, prices for other soft commodities like cocoa and sugar have seen mixed results, with cocoa prices falling while sugar prices saw slight gains.
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