Coffee Prices Hit 1977 High Due to Drought
The price of Arabica coffee has surged to its highest level since 1977, reaching $3.375 per pound. This significant increase is primarily due to severe drought conditions in Brazil, the world's largest coffee producer. The drought has adversely affected coffee crops, leading to concerns about reduced yields and tighter global supplies.
Vietnam, another major coffee producer known for its Robusta beans used in instant coffee, is also experiencing unusually dry weather. This has further exacerbated supply concerns, contributing to a rise in Robusta prices, which have reached approximately $5,200 per metric ton. Although Robusta prices peaked at $5,829 in September, the current levels remain significantly high.
Additional factors influencing the coffee market include shipping disruptions in the Red Sea, potential U.S. tariffs, and European Union regulations on deforestation. These elements have collectively contributed to the upward pressure on coffee prices, impacting both producers and consumers worldwide.
The combination of adverse weather conditions and logistical challenges underscores the vulnerability of global coffee supplies to environmental and geopolitical factors. As the situation unfolds, stakeholders across the coffee industry are carefully observing these factors to adapt their strategies and address the challenges ahead.
