Coffee prices hit 13-year high
Kyiv • UNN
Arabica coffee futures rose to $2.68 per pound, the highest level since 2011. The rise in prices was caused by a shortage of robusta, drought in Brazil and logistical problems.
A cup of coffee is likely to rise in price even more, as persistent supply disruptions are pushing the price of high-quality Arabica beans to the highest level in 13 years, Bloomberg reports, according to UNN.
Details
Futures rose 3.3% to $2.6805 a pound in New York, the highest level since 2011. Prices are up about 40% this year as a shortage of cheaper Robusta beans fuels demand for the Arabica variety, which is favored by specialty chains.
The rise in coffee prices is gaining momentum due to concerns about severe weather in the world's top producer, Brazil. The country is wrapping up its 2024-2025 harvest, and production prospects have weakened after heat and drought damaged fields.
"It's all about the weather," said Kona Hack, head of research at ED&F Man, pointing to conditions in Brazil's main coffee-growing regions and the lack of rainfall forecast for the next two weeks.
Soaring coffee prices are already having an impact - FTApr 1 2024, 02:32 PM • 34193 views
Attention now turns to next season's potential, and the South American country is gripped by the worst drought in decades, threatening further crop damage.
"The potential of the 2025/26 Arabica crop is hanging in the balance," said Rabobank analyst Carlos Mera. Rainfall in Arabica growing areas has been consistently below normal since the start of the dry season in April, he said. "This problem has arisen at a time when the coffee industry is suffering from port congestion in several countries, a global container shortage, disruptions in the Red Sea region, and disappointing harvests in Vietnam," he added.
Robusta prices also rose throughout the week, jumping 3% on Monday.
Throughout the supply chain, the impact of this year's price rally is already evident. JM Smucker Co., whose brands such as Folgers and Café Bustelo dominate the US home coffee market, raised its prices earlier this summer. The Pret A Manger restaurant chain has canceled its coffee subscription in the UK, which gave customers up to five drinks a day.
Addendum
Rising coffee prices are fueling inflation in the beverage sector. Orange juice prices also jumped due to a shortage of production, and a record rise in cocoa futures is pushing up the cost of chocolate drinks and desserts. However, prices for other staple foods, such as cereals, remain low, which is holding back overall food price inflation, the newspaper writes.
