Compared to the same month last year, the price of Arabica coffee has increased by more than 80%. In recent days, the price has exceeded $2,6 per pound, the highest value in the last decade. The main reason for the drastic increase in the price, as in the case of cocoa, is the increasingly irregular behavior of weather patterns.
Specifically, Brazil, the main producer (representing around 40% of the market), is experiencing one of the most severe droughts in the last seventy years. As a result, crop yields in the 2023/24 season are estimated to have dropped by 20%. The impact is also expected to be even greater over the next year. At the same time, Typhoon Yagi has decimated the crops of the plantations of the Central Highlands of Vietnam, one of the largest production areas of robusta coffee, one of the main varieties, along with Arabica.
As if that were not enough, the supply shock is converging with an ever-increasing demand, especially on the Asian continent. All in all, the coffee market is experiencing unprecedented tension, where it is difficult to predict how far the price may rise in the coming months.
Source: CESCE
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