Global arabica coffee prices hit $3.60 per pound on Wednesday, reaching record highs as Brazil, the world’s largest producer faces a decreasing few beans left to sell and worries about its upcoming harvest.
Dealers said that between 70% and 80% of Brazil’s current arabica yield has already been sold and new trades are slow.
Brazil accounts for nearly half of the world’s arabica coffee production a premium variety commonly used in roasted and ground coffee blends.
Recent weather conditions in Brazil have been more favorable after a severe drought last year.
Still, the upcoming harvest is expected to be 4.4% smaller than the previous one, according to Brazilian food supply agency, Conab.
“Global coffee supplies remain limited. Vietnam is progressing slowly with sales of its robusta crop.
The arabica harvested in Central America and Colombia is taking longer to get to the market.
Brazilian farmers don’t show much interest in selling more,” said broker HedgePoint Global Markets on Wednesday.
Arabica coffee futures on the ICE exchange hit a record high of $3.6945 per pound. This pushed yearly gains to nearly 15%. The price later settled at $3.6655 per pound, rising 2.5% for the day.
Robusta coffee, a lower-cost variety mainly used in instant coffee, also climbed 0.9% to $5,609 per metric ton.
Meanwhile, coffee exports from India, the world’s fifth-largest robusta producer, are expected to drop by more than 10% in 2025 due to lower yields and reduced leftover stocks from last season.
Traders note that coffee farmers in India and Vietnam, the world’s top robusta producers, are holding onto their supplies, anticipating further price increases.
In Brazil, between 80% and 90% of the current crop has already been sold. A report from broker Sucden highlights that Brazilian farmers are prioritizing domestic sales over dollar-based exports, despite higher earnings from the latter.
This shift is due to a significant improvement in their financial stability over the past two years.
Sucden also warns that Brazil’s coffee reserves have traditionally declined to approximately 500,000 bags versus 8 million bags.
leaving the market vulnerable to any further weather disruptions that could drive prices even higher.
The firm projects that the global coffee market will experience a fourth repeated year of supply shortages.
In other soft commodities, raw sugar prices rose by 1.1% to 19.45 cents per pound, rebounding strongly from last week’s five-month low, while white sugar climbed 2.2% to $522.90 per ton.
New York cocoa futures rose 3.3% to $11,745 per ton, while London cocoa prices increased by 1.6% to 9,138 pounds per ton.