For the first time, Arabica coffee has reached US$4 (AU$6.37) per pound in New York as speculations mount over how much a cup of coffee could cost by the end of 2025.
According to a Bloomberg report, fears are growing about future output in the world’s top coffee producer Brazil following a prolonged drought. Strong exports from the nation earlier in the season are compounding the current strain on supply, and local farmers have sold more of their crop than usual at this point in the year, leaving questions over how much will be left to ship.
“We should still have some additional volatility until the next crop arrives,” says Pavel Cardoso, President of Brazil’s Coffee Industry Association.
There are also worries about output in Vietnam, the largest producer of Robusta, after fields were hit by unfavourable weather. Together, this is expected to pull global stockpiles to a 25-year low, the US Department of Agriculture forecasts.
The most-active Arabica futures contract climbed as much as 4.6 per cent in New York on 5 February, later settling at US$3.9775 per pound, up 3.8 per cent from the prior session.
Inventories at exchange-monitored warehouses have been declining. However, a recent increase in the amount of coffee pending grading suggests record prices are attracting more beans to the exchange, according to Rabobank analyst Carlos Mera.
