Coffee futures soared to an all-time high as the situation surrounding Arabica and Robusta beans added to their tremendous 2024 gains. Coffee prices have been rocketing this year mainly due to Brazil’s poor growing conditions amid severe drought. The international coffee market could face a significant deficit next year with coffee demand remaining intact.
March coffee futures for Arabica beans surged $0.1545, or 4.68%, to a record $3.455 per pound at 13:40 GMT on Tuesday on the US ICE Futures exchange. Coffee is up 84% year-to-date.
Arabica is a high-quality bean used by roasters and coffee houses. It is highly sensitive to its climate.
January Robusta futures advanced $216.00, or 4.12%, to $5,462.00 per metric ton on London’s ICE Futures exchange. Robusta is also up about 78% so far this year. Robusta, which can be grown in all types of climates, is a lower-quality bean used for instant coffee.
Volcake, one of the world’s largest coffee traders, slashed its outlook for Brazil’s Arabica output after a disappointing crop tour. The South American nation has been suffering from the severe drought that has weighed on farmers’ production capabilities.
The group forecasts that Brazil will likely produce 34.4 million bags of Arabica in the coming season, down from the September estimate of more than 45 million bags.
As a result, the 2025-2026 marketing season outlook could be worse than expected. With a lower-than-expected outlook for Brazil’s Arabica output, the global deficit could reach 5.5 million bags.
The outlook for 2025-26 is worse than for the current season, in which Brazilian arabica production is expected to be 43.3 million bags, resulting in a global deficit of 5.5 million bags. A bag weighs 60 kilograms (132 pounds).
“The loss of Brazil’s 2025-26 arabica crop is a critical flag to the outlook for the market structure,” Volcafe said, according to Bloomberg.
In Vietnam, the situation was the opposite: heavy rainfall flooded coffee fields and postponed the country’s Robusta harvest. Vietnam General Statistics Office officials recently reported that the nation’s November coffee exports fell by 49.1% to 60,000 metric tons. In the first 11 months of 2024, coffee shipments are down 14.3% year-over-year.
Coffee recently came under pressure after a report suggested keeping a vast sum of capital in coffee might not be a justifiable trade after the ICE exchange bolstered its margins for holding positions in coffee futures.
In other agricultural commodities, January corn futures were unchanged at $4.4175 per bushel. January wheat futures picked up $0.03, or 0.54%, to $5.6175 a bushel. January soybean futures added $0.0575, or 0.58%, to $9.955 per bushel. March cocoa futures rocketed $449, or 4.45%, to $10,530 per metric ton.