This week, coffee futures prices made their largest advance since 1997, as major coffee producers expressed concern about this year’s crop. A smaller yield means coffee roasters will pay more, and you know what that means – so will consumers.
According to Bloomberg News, the futures price of Arabica, the coffee often used in high-end specialty coffees, jumped nearly 3% to start the week. Even the lower-cost coffee used to make instant brands hit its highest level since the 1970s.
The outlook for coffee prices is usually influenced by a number of factors, often connected to weather conditions in major coffee-producing regions like Brazil and Vietnam. So far this year, Brazilian coffee harvests have been smaller than projected. Brazil has suffered a drought since April, reducing the projected 2024/25 output to less than 67 million metric tons.
Vietnam, known for its monsoon season, has been even rainier than usual, raising concerns about the flooding of coffee fields. Vietnam is the world’s largest producer of robusta coffee.
Up until now, it hasn’t had much of an effect on the industry because supplies have continued to flow. The International Coffee Organization recently reported a significant increase in global coffee exports, which were up nearly 25% in September. However, industry analysts are worried about what comes next.