The situation was complicated by a prolonged drought in Brazil, which is the largest producer of Arabica coffee in the world.
Coffee futuresArabica on the New York Stock Exchange rose 4.9% to $3,446 per pound, reaching its highest level since 1972. Overall, Arabica prices worldwide have risen 80% since the beginning of the year.
Bloomberg writes about this.
The situation has been complicated by a prolonged drought in Brazil, the world's largest Arabica producer, and weather conditions in Vietnam, the world's largest producer of the cheap Robusta variety, have also had an impact. The country's key coffee belt suffered from drought during the growth of coffee trees, and heavy rains began at the beginning of the harvest.
The outlook for Arabica production in Brazil is worsening. Next season, Brazil will produce only 34.4 million bags of Arabica, about 11 million bags less than expected in September. This means that global coffee production will fall short of demand by 8.5 million bags in the 2025-26 season, which would be an unprecedented fifth consecutive year of shortages.
“Concerns about the Brazilian Arabica crop in 2025-26 have increased this week, with recent crop reviews pointing to production in the 30 million bag range, which would lead to another supply shortage,” said Marex Group analyst Steve Pollard.
The rise in prices could further increase costs for roasters and cafes, which will be forced to raise prices and abandon discounts.
Recall that in November, for the first time since 1997, futures for the most popular Arabica coffee variety rose to a maximum. Contracts peaked at $3.11 per pound of Arabica.