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The prices of Arabica coffee extended this week’s rally to reach the highest level since 1977 in trading Wednesday on concerns of limited supplies amid global output woes, caused primarily by drought in major producer, Brazil, coupled with geopolitical factors.
A pound of Arabica beans listed in New York hit 3.20 dollars, extending the commodity’s rally over the past year and pushing past a nearly 30-year high the day prior.
The all-time recorded high was 3.38 dollars in 1977.
Brazil, the world’s largest coffee producer, faced a record-breaking drought this year which has raised significant concerns about the production potential for the crop in 2025/2026.
The concerns come even after crops benefitted from “significant rains” that returned in October, leading to an “excellent flowering,” according to Guilherme Morya, senior analyst at Rabobank.
Price rises have also been buoyed by geopolitical factors such as disruptions to shipping in the Red Sea, potential U.S. tariffs and the future European Union regulation on deforestation, according to analysts.
While demand remains high, “farmers are choosing to sell only what is necessary, thus limiting the coffee supply in the local market,” Morya added.
Vietnam has also faced supply concerns this year for its cheaper Robusta bean that’s used for instant coffee, as the country faced dryness during the growing period.
Robusta, listed in London, is trading at around 5,200 dollars per tonne, after reaching a record price of 5,829 dollars in mid-September…
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