Coffee prices have surged to levels not seen in nearly five decades, driven by worries over crop yields in the world’s leading coffee-producing nations, Brazil and Vietnam.
Recent commodity market futures have pushed Arabica coffee to $3.35 per ounce (453 grams), a 70% increase from the start of the year and the highest price since 1977.
The spike is largely due to extreme weather conditions affecting both Brazil and Vietnam, where droughts and excessive rainfall have disrupted the growing season. “A challenging growing season in Vietnam, the top producer of Robusta beans, has now moved to Brazil where adverse weather has raised serious concerns about the 2025 Arabica crop,” noted Ole Hansen, Head of Commodity Strategy at Saxo Bank, in his analysis of the market. Brazil, the main Arabica bean producer, faced its worst drought in decades before rains returned in October. Despite this, soil moisture remained low, fueling concerns that crops would fall short of expectations and contributing to higher benchmark Intercontinental Exchange (ICE) prices.
On Thursday afternoon, Arabica futures for March delivery traded at $3.14 per pound on the ICE, showing a slight increase following a recent correction from record highs reached on November 29.
Of the two main types of coffee traded, Arabica has seen a nearly 70% increase in price year-to-date, while Robusta has gained over 60%. Coffee is among the most traded commodities worldwide, with demand rising, especially in China. However, the limited number of key producers—Brazil, Vietnam, Colombia, Indonesia, and Ethiopia—are all highly vulnerable to climate change, which impacts their ability to meet growing demand.
