Joe Hoppe of The Wall Street Journal reports prices of arabica coffee have jumped more than 80% this year on supply concerns, surpassing a previous record set in 1977. Hoppe writes:
Arabica coffee prices hit their highest ever level on global supply worries, beating a prior record set almost 50 years ago.
Continuous arabica futures [spot prices shown in chart] on ICE rose 4.1% to $3.44 a pound by midday in Europe, having reached as high as $3.48 earlier in the session. That beat the prior record of about $3.356, set in 1977.
Arabica coffee futures are up more than 83% in the year-to-date on concerns over the 2025 harvest in Brazil. The South American producer had its worst drought in 70 years in August and September, swiftly followed by heavy rains in October. […]
On Tuesday, top coffee trader Volcafe cut its 2025-2026 production outlook by nearly 25% to 34.4 million bags of arabica beans, pointing to a fifth consecutive year of deficits. This represents a cut of nearly 11 million bags from the September estimate, according to a Bloomberg report. […]
Production of soft commodities has struggled to meet rising demand, with both coffee and cocoa grown in a narrow tropical band. This concentration makes soft commodities particularly vulnerable to adverse weather conditions—particularly in coffee powerhouses Brazil and Vietnam, which account for around 56% of global production, Hansen added.
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