Dec 13, 2024 (MENAFN via COMTEX) --
(MENAFN - Yolo Wire) %Coffee prices are now at a 50-year high as a record-breaking rally shows no signs of slowing down.
Arabica coffee bean prices hit an intraday all-time high of $348.35 per pound, the highest level since 1974.
The price of Arabica beans, which are used in high-end coffees, is now up 70% year-to-date.
The last time the price for Arabica beans, which are also the world’s most popular variety, traded this high was in the 1970s when snow destroyed large areas of Brazilian plantations.
Renowned for their smooth taste, Arabica coffee beans comprise 60% to 70% of the global coffee market. They are used in espressos and other barista-made beverages.
Drought and high temperatures are regarded as the primary drivers for the current price spike, say analysts, who warn that it could take years for coffee bean prices to come back down.
Robusta coffee bean prices have also hit record highs. Robusta beans are known for their strong flavor and are typically used in instant coffee blends, comprising 30% to 40% of the global market.
Coffee is the second-most traded commodity by volume after crude oil. This year’s price increase is due largely to concerns over the 2025 crop in Brazil, the world’s largest producer.
Brazil experienced its worst drought in 70 years this summer, followed by heavy rains in October, raising fears that the coffee bean crop will be lost.
Demand for coffee has been boosted in recent years by growing consumption in China. Production though is struggling to keep up due to the impacts of climate change, say analysts.
The U.S. Department of Agriculture said in its semi-annual report that it expects Brazil’s coffee production for the marketing year 2024/2025 to come in at 66.4 million (60 kilograms per bag), a 6% drop from its previous projection earlier this year.
Coffee makers are managing the current situation by passing on the higher costs to consumers.
%Nestle (OTC: $NSRGF), the world’s biggest coffee maker, said recently that it would continue raising prices and making its coffee packs smaller to offset the impact of higher prices.
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COMTEX_460836394/2604/2024-12-13T23:36:01
