Bloomberg reported that stock prices for Arabica coffee have risen to their highest level since 1997.
What is happening with prices
According to trading data on the ICE exchange, March futures for coffee beans rose by 3.03% and reached $3.11 per pound at their peak.
On Monday, the cost of January futures for Robusta coffee on the ICE exchange peaked at 6.86%, up to $5327 per ton.
The reason for the rise in price
The agency reported that coffee futures rose to a multi-year high due to fears of a supply shortage from Brazil, one of the largest suppliers of this variety in the world.
According to traders, producers are reducing their supply. Although there is no official estimate of coffee stocks in the country’s warehouses, the newspaper reported growing concerns that exports may slow down in the coming months.
With about eight months to go until the start of the next season, the percentage of coffee sold by Brazilian producers was very high, said Carlos Santana Jr, commercial director of trader Ecom Group.
The consulting company Safras e Mercado estimated that 70% of the last coffee harvest had already been sold as of November 12.
The high rate of exports from Brazil also led to the US Department of Agriculture lowering its estimate of coffee stocks in Brazil last week.
In addition, market participants fear a decline in coffee production in Brazil next season, as heat and drought have damaged coffee plantations and trees.