Coffee prices surge to highest since 1997
Make us a preferred source
Make us a preferred source on Google
The news: Arabica coffee prices surged to its highest level since 1977 amid global supply concerns tied to weather and geopolitical factors.
The numbers: Arabica coffee futures rose over 3% to USD3.17 per pound in New York, and are up 70% this year, while robusta coffee has soared 88% in London.
The context: Brazil, the largest arabica producer, faced record-breaking drought this year, raising concerns for the 2025/2026 crop, while Vietnam, the market leader for cheaper robusta beans, is also facing supply challenges from adverse weather.
Analysts pointed out the concerns persist despite crops benefiting from “significant rains” that returned in October.
Rabobank analyst Carlos Mera pointed to shipping and logistical issues, the front loading of sales to the US ahead of potential trade tariffs under a Trump administration in the US, and EU deforestation regulations as contributing factors.
Citi raised its 2025 forecast for arabica prices to USD2.80 per pound, citing the potential for structural deficits, while speculators’ bullish bets remain historically high, despite overbought signals.
Bloomberg noted Nestlé and other coffee makers are raising prices and reducing pack sizes to counter rising costs.
What they said: “We note the large uncertainty on the health of Brazilian crops after the adverse weather, and general production issues poses the possibility of falling into a structural deficit,” Citi analyst wrote in a note.
The sources: Agence France-Presse , The Wall Street Journal , Bloomberg
