Arabica Coffee Prices Surge to Record Highs Amid Global Supply Concerns
Global arabica coffee prices have soared to record highs, surpassing $3.60 per pound on Wednesday, amid rising concerns about supply from Brazil, the leading producer in the world. Dealers indicate that between 70% and 80% of Brazil’s current arabica harvest has already been sold, leading to a slowdown in new trades. Brazil is responsible for nearly half of the global arabica coffee production, which is a premium variety commonly used in roasted and ground blends.
Although Brazil's weather has improved following a severe drought last year, the upcoming harvest is projected to be 4.4% smaller than the previous one, according to the Brazilian food supply agency Conab. This situation has left the market apprehensive about potential supply shortages.
"Global coffee supplies remain constrained. Vietnam’s robusta crop is moving slowly, arabica from Central America and Colombia is taking longer to arrive in the market, and Brazilian farmers are hesitant to sell more," noted a broker at HedgePoint Global Markets.
Consequently, arabica coffee futures on the ICE exchange hit a record high of $3.6945 per pound earlier this week, reflecting a nearly 15% increase for the year. The contract ultimately closed at $3.6655 per pound, marking a rise of 2.5%.
Robusta coffee, which is a less expensive variety mainly used in instant coffee production, also experienced price hikes, climbing 0.9% to $5,609 per metric ton. India, the fifth-largest robusta producer globally, is anticipated to see a decline of over 10% in coffee exports in 2025 due to lower production and diminished carry-forward stocks from the previous crop. Likewise, farmers in Vietnam and India are holding back on sales, hoping for better prices in the future.
In Brazil, around 80%-90% of the current arabica harvest has already been sold, with farmers now focusing more on local sales rather than dollar-priced exports, even though the latter typically yield higher returns. The financial situation in the country has improved over the past two years, providing farmers with greater flexibility. Sucden, a global coffee broker, noted that Brazil’s buffer stocks have decreased to roughly