The price of Arabica coffee beans has surged to its highest level since 1977 due to the severe drought in Brazil, the world’s largest coffee producer, and concerns over trade policies in a potential second Trump administration.
On the 27th local time, the price of Arabica coffee futures in the New York market rose to $3.20 per pound. This is the highest level since 1977, when it was at $3.38, and the price of Arabica beans has increased by about 70% just this year.
The ‘Robusta’ variety, mainly used in instant coffee and blending, is being traded at around $5,200 per ton in the London market, with the increase rate also exceeding 80% this year.
Coffee bean prices have been soaring as concerns about next year’s coffee harvest grow due to the severe drought in Brazil this year. In Vietnam, a major producer of ‘Robusta’, worries about supply have heightened due to dry weather during the cultivation period and heavy rains during the harvest.
Carlos Mera, an analyst at Rabobank, explained that prices have been influenced not only by concerns about Brazil’s supply next year but also due to preemptive stock increases in response to EU forest regulations and tariffs and trade disputes anticipated by President-elect Donald Trump.
A spokesperson for Nestlé, the world’s largest coffee producer, recently stated that they would need to raise coffee prices and reduce packaging sizes due to the rise in bean prices.
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