Your cup of coffee in the morning could soon become pricier than ever after coffee futures soared to their highest in almost half a century. The biggest reason for the surge is an expected low output from Brazil, the world’s largest coffee producer, due to devastating droughts.
On Friday, the price of Arabica coffee futures reached $335.45 per lb, their highest point since 1977. It later settled at $318.05 per lb, being 65% up year-to-date. Arabica coffee, known for its rich and smooth taste, is often used for specialty coffee drinks like cappuccino and latte.
The price of Robusta coffee futures also ticked up. They closed at $5,377 per metric ton after soaring as high as $5,694 a metric ton during the session. Robusta coffee beans are considered lower quality and are often used in instant coffees.
The soaring coffee prices are a result of droughts in Brazil throughout 2024 that are expected to result in significantly lower production of coffee beans next year. The decision of some farmers to hold onto their crops for an even higher price is also expected to have an impact.
Additionally, Vietnam, the world’s second-largest coffee producer, has also seen its fair share of problems. The coffee farmers in the country dealt with drought earlier in the year and heavy rainfall during the harvest season.