Coffee Futures Contracts Reach Highest Levels Since the 1970s Amid Global Supply Disruptions

Coffee futures contracts in New York have continued their significant rise, with Arabica coffee prices reaching $3.1845 per pound today, marking their highest level since 1977, and an increase of 70% since the beginning of the year. This surge reflects growing concerns over global supplies amid severe weather conditions affecting major producing countries, particularly Brazil and Vietnam. Brazil, the world’s largest coffee producer, experienced severe droughts that impacted Arabica production, while Vietnam faced dry conditions in key coffee-growing regions followed by heavy rains during the harvest season, further complicating global market supplies.

Robusta coffee prices, used in instant coffee as a more economical option, have also reached record highs not seen since the 1970s, driven by increased demand due to declining Arabica supply. Analysts predict that next season’s production is under threat due to the continued effects of drought in Brazil. A report by “Rabobank” highlighted that months of insufficient rainfall have harmed current coffee crops, with doubts about the stability of blossoms essential for fruit development in the coming months.

This situation has placed significant pressure on the global market, with many companies and roasters raising product prices to cope with rising costs. Coffee stocks in Brazil have dropped to their lowest levels in years, heightening concerns over the availability of coffee in global markets. At the same time, supply chains are grappling with logistical challenges, such as port congestion and container shortages, further exacerbating the supply crisis.

This sharp rise in coffee prices signals a profound impact on consumers, with premium coffee under threat of becoming an increasingly expensive commodity. Expectations suggest this upward trend will continue if the climatic and logistical challenges facing the global coffee industry persist.