Coffee prices surge to record highs above $3.60 per lb
Global arabica coffee prices hit record highs above $3.60 per lb on Wednesday as Brazil, by far the world's largest producer, has few beans left to sell and as worries over its upcoming harvest persist.
Dealers said 70%-80% of Brazil's current arabica harvest has been sold and new trades are happening at a slow pace. Brazil produces nearly half the world's arabica beans, a high-end variety typically used in roast and ground blends.
The country experienced severe drought last year though recent weather has been more favourable. Still according to Brazil's food supply agency Conab, the upcoming crop will be 4.4% the current one.
As such, arabica coffee futures on the ICE exchange, used to price physical coffee grades around the world, hit a new record of $3.6490 per lb earlier, bringing gains for the year up nearly 15%.
They traded up 1.7% at $3.6380 per lb by 1120 GMT, while robusta coffee futures, a generally cheaper variety used mostly to make instant coffee products, rose 0.6% to $5,553 a metric ton.
Coffee exports from India, the world's fifth largest robusta producer, are expected to decline more than 10% in 2025 due to lower production and reduced carry-forward stocks from last season's crop.
Dealers said farmers in both India and Vietnam, the world's top robusta producer, are holding back sales in anticipation of further price gains and that in Brazil, some 80-90% of the current harvest has been sold.
Broker Sucden said in a report that Brazilian farmers are also prioritising local sales over dollar priced exports even though the latter fetch more money as their financial position has improved significantly over the past two years.
It added the country's current buffer stocks have eroded to an estimated 500,000 bags versus some 8 million bags traditionally, meaning any additional weather disruptions could have an outsized impact on global coffee prices.
Sucden sees the global coffee market recording a fourth successive deficit this season.
In other soft commodities traded, raw sugar rose 0.4% to 19.30 cents per lb, rebounding strongly from last week's five-month low, while white sugar gained 0.9% to $516.10 a ton.
New York cocoa futures rose 2% to $11,409 a ton, while London cocoa was up 0.8% at 9,113 pounds a ton.
(Reporting by Maytaal Angel; Editing by Shounak Dasgupta)
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