Analysts say the record surge in coffee prices shows no signs of slowing, warning that it could take years for one of the world’s leading commodities to recover.
Arabica coffee futures for March delivery hit a near 50-year high of 348.35 cents per pound on Tuesday. The contract has eased since then, but it’s still up 70% to date.
The last time the price of the world’s most popular Arabica bean reached this high was in 1977 when heavy snowfall in Brazil wiped out large plantations.
Arabica coffee beans are known for their smooth, sweet taste and account for 60% to 70% of the global coffee market. They are typically used for espresso and other barista-made coffees.
Drought and heat, as well as a reliance on supply from a handful of global regions, are believed to be the main drivers of recent price increases.
Coffee is considered the second most traded commodity after oil, and the rise in coffee prices has been driven by concerns about the 2025 harvest in Brazil, which is far from the world’s largest producer.
“The country experienced its worst drought in 70 years during August and September, followed by heavy rains in October, raising fears that the flowering crop could fail,” Ole Hansen, head of commodity strategy at Denmark’s Saxo Bank, said in a research note published Tuesday.
Coffee is a staple drink for millions of people around the world, and demand has increased in recent years as consumption in China has also increased. But production has struggled to catch on.
“Like cocoa, coffee is grown in a small region with major producers such as Brazil, Vietnam, Colombia and Ethiopia,” said Saxo Bank’s Hansen.
