Coffee Prices Set New Record

Arabica coffee prices recently surpassed $4 per pound in New York for the first time. Concerns about a tight global supply are fueling the rapid price surge, which has seen prices double in the past year. This development could put upward pressure on consumers as higher raw coffee prices will push retail prices higher. The price surge has already impacted demand and curbed consumption growth. Concerns about future production in Brazil, the world's largest coffee producer, are growing after a prolonged drought. Strong exports from Brazil earlier in the season have exacerbated the current shortage. Vietnam, the world's largest Robusta coffee producer, is also facing production challenges due to adverse weather. These combined issues are expected to push global coffee inventories to their lowest levels in 25 years. The most actively traded Arabica coffee futures contract rose as much as 4.6% in New York on Wednesday, before closing at $3.97 per pound, up 3.8%. While record prices are attracting more supply, concerns remain about future harvests and potential price volatility.