New York: Arabica coffee prices soared above $3.60 per pound on Wednesday, reaching a record high as Brazil, the world’s largest producer, faces limited supplies and uncertainty over its upcoming harvest.
Dealers report that 70-80% of Brazil’s current arabica harvest has already been sold, slowing down new trades. Brazil produces nearly half the world’s arabica beans, a premium variety used in roast and ground coffee.
Weather Improves, But Output Declines
While recent weather conditions in Brazil have improved after last year’s severe drought, the 2025 arabica crop is expected to be 4.4% smaller than the previous season, according to Brazil’s food supply agency, Conab.
Slow Sales from Other Key Producers
Coffee supplies remain tight globally, with Vietnam, the world’s top robusta producer, progressing slowly in sales. Central American and Colombian arabica exports are also delayed, while Brazilian farmers are reluctant to sell more beans.
Record Highs for Coffee Futures
On the ICE exchange, arabica coffee futures hit a record $3.6945 per pound, gaining nearly 15% this year. The contract closed 2.5% higher at $3.6655 per pound.
Meanwhile, robusta coffee prices climbed 0.9% to $5,609 per metric ton as Indian coffee exports are expected to fall over 10% in 2025 due to lower production and reduced stocks.
Brazilian Farmers Favor Local Sales
Farmers in Brazil, India, and Vietnam are holding back sales, expecting further price increases. In Brazil, 80-90% of the current harvest has been sold, but farmers are prioritizing local sales over dollar-priced exports due to stronger financial positions.
Sucden, a global commodities broker, estimates Brazil’s buffer stocks have fallen to 500,000 bags, far below the traditional 8 million bags. Any further weather disruptions could significantly impact global coffee prices.
Coffee Market Faces Fourth Consecutive Deficit
Sucden predicts the global coffee market will record a fourth consecutive deficit this season, keeping supply tight and prices high.
Other Soft Commodities Gain
- Raw sugar rose 1.1% to 19.45 cents per pound, recovering from last week’s five-month low.
- White sugar climbed 2.2% to $522.90 per ton.
- New York cocoa surged 3.3% to $11,745 per ton, while London cocoa rose 1.6% to 9,138 pounds per ton.
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