Arabica coffee futures hit a new record high for the thirteenth consecutive session. Unseasonably hot, dry weather over Brazil's main coffee-growing regions is worrying investors, especially as Brazilian growers, the world's leading suppliers, are reluctant to sell their stocks.
A panicked market
"Panic has finally set in, and prices will continue to rise", warns Bob Fish, co-founder of the Biggby Coffee franchise, which operates 350 stores in the United States. In his opinion, only two factors could put the brakes on this rise. Either a bumper harvest in Brazil and Vietnam, not expected before August 2026. Or a massive drop in demand, triggered by soaring prices in consumer countries. Against this backdrop, Fish recommends that coffee shops raise their prices to avoid seeing their margins collapse.
Coffee futures, the global benchmark for pricing, reached a peak of $4.2410 per lb before closing up 6.2% at $4.211. The spot contract, which expires in March, briefly touched $4.3195. Since the start of the year, prices have jumped 35%, following a 70% surge in 2023.
Supply under pressure
The market remains concerned about low stocks in Brazil, which supplies almost half the world's Arabica. To date, around 85% of the current crop has been sold, and growers seem in no hurry to give up the rest.
"The coffee still available could be in the hands of the most powerful Brazilian producers, well financed and reluctant to sell", explains one coffee broker. However, some market players believe that this price surge is now self-sustaining and no longer fully reflects the fundamentals of the sector.
According to trader Icona Cafe, Brazil's next harvest could be better than expected, although not better than last year's, but enough to reassure the market slightly. Broker Hedgepoint even estimates that Brazil could produce 64.1 million bags in 2025/26, compared with 63.4 million in the previous season.
Meanwhile, Arabica speculators, the driving force behind the current rally, reduced their net long position by 3,130 contracts to 50,333 contracts as of February 4, according to industry data.
An impact on all commodities
The surge in coffee prices is part of a wider context of volatility in agricultural commodities. Robusta coffee, often used for instant coffee and less expensive than Arabica, rose by 2.4% to $5,697 a tonne, following its all-time high of $5,840 on January 31.
Conversely, cocoa fell back after an eventful week: New York cocoa futures dropped by 2.3% to $9,878 per tonne, while London futures were down 1.7% at £7,919 per tonne.
Sugar prices remained slightly up: raw sugar rose by 0.7% to 19.50 cents a pound, while white sugar gained 0.3% to 519.40 dollars a ton.
