Futures for Arabica coffee on the New York Stock Exchange rose 4.9% to $3.434 per pound, setting a record in data tracked since 1972. Bloomberg reports that Arabica prices have risen by 80% since the beginning of the year.
The situation was complicated by severe drought in Brazil, the world’s leading Arabica producer, and unfavorable weather conditions in Vietnam, the largest producer of cheaper robusta. In Vietnam, dry weather during the growth of coffee trees gave way to heavy rains at the beginning of the harvest, further complicating the process.
The rising coffee cost puts pressure on roasters and cafes, which are already forced to raise prices and cancel discounts to protect their market share.
Harvest forecasts in Brazil are deteriorating. Next season, the country will produce only 34.4 million bags of arabica, 11 million less than expected in September. This deficit risks leaving the global coffee industry with an 8.5 million bag gap in the 2025-2026 season, which would be an unprecedented fifth consecutive year of deficit.