Arabica Coffee Futures Hit Highest Since 2011 On Supply Worries – CoffeeTalk

Coffee prices are set to rise as persistent supply disruptions push costs for premium arabica beans to the highest in 13 years. Futures for arabica beans in New York have surged by 4.8% to $2.718 a pound, the highest since 2011. Prices are up roughly 40% this year due to shortages of the cheaper robusta beans, which stoke demand for the arabica variety favored by specialty chains. The rally in coffee prices has been driven by concerns about harsh weather in Brazil, where the nation is wrapping up its 2024-25 harvest and production prospects have been weakened due to heat and dryness. The South American nation has been gripped by its worst drought in decades, threatening further crop damage. Rainfall in arabica-growing areas has been consistently below normal levels since the start of the dry season in April. The coffee industry is suffering from port congestion in several countries, global scarcity of containers, disruptions around the Red Sea, and disappointing crops in Vietnam. Robusta prices have also rallied for over a week, jumping as much as 4.2% on Monday.

The impact of this year’s rally is evident across the supply chain, with JM Smucker Co. increasing its prices earlier this summer and Pret A Manger scrapping its UK coffee subscription. Coffee’s advance is adding to inflation across the beverage aisle, with orange juice prices also spiked due to production shortfalls and a record run-up in cocoa futures boosting costs for chocolate drinks and desserts. Prices for other major staples, like grains, remain subdued, tempering overall food inflation.

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