Arabica Coffee Prices Reach New Heights Amid Supply Concerns, Sugar Declines
Arabica coffee continued its upward trajectory on Monday, hitting a new peak for the eighth consecutive session as tightening supplies fueled market momentum ahead of an anticipated production decline in Brazil this year.
Brazil, the world’s leading producer of arabica coffee, is expected to yield a smaller crop in 2025, with adverse weather conditions—particularly excessive heat and dry spells in 2024—contributing to lower output.
On the ICE Futures U.S. exchange, arabica coffee futures closed up 3.05 cents, or 0.8%, at $3.809 per pound, after reaching a record high of $3.8895. The market has surged by 19% since the start of 2025, following a substantial 70% increase in 2024.
Brazil’s 2025 coffee harvest, set to begin in April, was forecast on Monday at 63.2 million 60-kg bags, reflecting a 1.8% drop from the previous year’s crop, according to exporter Comexim. The decline has been attributed to challenging weather conditions. Additionally, Brazil’s national food supply agency Conab projected a 12.4% decrease in arabica coffee output, estimating it at 34.7 million bags, citing unfavorable climatic conditions before the flowering phase, which impacted yields.
Market uncertainty has also led Brazilian coffee farmers to hold back on sales, anticipating further price hikes. Meanwhile, speculative traders have been increasing their bullish positions on arabica, adding to the upward momentum in prices.
Robusta coffee, a more cost-effective variety commonly used in instant coffee production, saw a decline in futures prices, settling down $184, or 3.2%, at $5,534 per metric ton. Last week, robusta reached $5,861, marking the highest level since the contract was introduced in 2008.
In the sugar market, raw sugar futures slipped 0.5% to 19.26 cents per pound, partially weighed down by a stronger U.S. dollar following newly imposed tariffs under President Donald Trump’s administration, which intensified trade tensions. Dealers noted that a generally optimistic crop outlook for the 2025/26 season also contributed to the bearish sentiment. White sugar prices fell 1%, closing at $514.10 per ton.
Meanwhile, cocoa markets experienced mixed movements. New York cocoa futures edged up $15, or 0.1%, reaching $11,002 per ton, while London cocoa declined 0.7% to 8,759 pounds per ton. Market participants noted an increase in cocoa bean arrivals at ports in Ivory Coast, the world’s largest producer. However, exporters highlighted concerns over the poor quality of beans due to inadequate storage conditions.
