Rudolph Angler Coffee prices have surged to a 47-year high due to extreme weather in Brazil and Vietnam.
Arabica coffee futures hit $3.35 per pound, a 70% increase since January and the highest level since 1977. Prices have climbed due to drought and heavy rains disrupting crops in top-producing countries like Brazil and Vietnam.
Vietnam suffered prolonged drought, followed by torrential rains that delayed harvesting. Meanwhile, adverse weather in Brazil raised fears about its 2025 Arabica crop. Ole Hansen, Head of Commodity Strategy at Saxo Bank, highlighted these challenges in a recent market analysis.
Brazil and Vietnam Face Weather Challenges
Brazil endured its worst drought in decades before October rains improved conditions slightly. However, soil moisture remains too low, stoking fears of underperforming crops and pushing up prices on the Intercontinental Exchange (ICE).
March Arabica futures traded at $3.14 per pound on Thursday, rebounding after corrections from the November 29 record of $3.35.
Arabica prices have surged 70% this year, while Robusta prices climbed over 60%. With demand rising, especially in China, coffee remains one of the most traded global commodities. However, tropical countries like Brazil, Vietnam, and Ethiopia, vulnerable to climate change, dominate production.
Shipping Disruptions Add to Market Strain
Houthi attacks in the Red Sea disrupted shipping routes, adding to market uncertainty and price increases.
The USDA recently lowered Brazil’s 2024/25 coffee production forecast from 69.9 million to 66.4 million bags. Despite the revision, this forecast remains 0.2% higher than last season. The USDA attributed the small growth to weather challenges earlier in the season, which reduced initial estimates.
Consumers are already feeling the effects. Nestlé, the world’s largest coffee producer, announced further price increases for products like Nespresso capsules, citing rising market costs.