Coffee Surges Even Higher, Now At Highest Price Since 1977 – CoffeeTalk

Coffee futures have surged to their highest level in over four decades in New York due to global supply concerns, posing a threat to consumers. Arabica beans, the preferred variety for specialty brews, have climbed as much as 3.9%, reaching the highest since 1977. This year, they have jumped almost 70%. Brazil and Vietnam are the two biggest global coffee growers, with Brazil exporting mostly the premium arabica bean and Vietnam leading the market for the cheaper robusta.

The move is expected to add to the pain faced by cafes and roasters, ultimately boosting costs to consumers. Along the supply chain, sellers have raised prices and scrapped discounts to protect their margins. Nestle, the world’s largest coffee maker, has announced plans to raise prices and make packs smaller to blunt the impact of more expensive beans.

The rally is due to complex circumstances, including concerns about Brazil’s output in the upcoming 2025-26 season, shipping and logistical challenges, uncertainty over the start date for the European Union’s deforestation rules, and front loading of sales to the US ahead of potential trade tariffs under a Trump administration.

Arabica was last up 2.6% at $3.17 a pound in New York, pushing futures’ 14-day relative-strength index well above 70, suggesting that the market has become overbought. Coffee growers in Brazil are not selling large volumes at the moment, leaving buyers with tight supplies until the next crop is harvested starting in May.

The recent arabica supply concerns come on top of several seasons of lackluster crops in Brazil and other key coffee growing countries. The increased costs of hedging and the possibility of producer defaults have contributed to panic buying recently. Fund managers holding large bets on higher prices have also been involved in the rally.

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