The ICE Futures price for coffee surged to a 13-year peak as fresh data from the exchange’s trading platform underscored a broad market rally. Traders across North America and Europe watched prices climb as risk factors accumulated. Weather events, ongoing supply concerns, and the purchasing appetites of roasters and retailers contributed to the move, prompting traders to reassess margins and procurement strategies in a climate of volatility. The latest figures suggest a rethink of supply risk in the coffee complex, with buyers seeking to secure commitments ahead of volatile harvests and shifting export patterns.
December Arabica futures rose 3.3 percent to 2.68 dollars per pound, about 5.90 dollars per kilogram, on the ICE Futures Exchange. Since the start of 2024, prices have climbed roughly 40 percent as market participants confronted a squeeze on cheaper Robusta beans that narrowed options for processors and traders alike. The price gap between Arabica and Robusta has widened again, amplifying incentives for roasters to adjust blends and for consumers to feel the ripple effects in retail coffee prices.
Prices surged on fears of tighter supply as market watchers projected a fall in Brazilian production. Brazil is the world’s largest supplier of this Arabica variety, and heat and drought have damaged many coffee estates, raising fears about harvest quality and output. In this environment, buyers and investors reassessed the risk of future shortages, driving speculative activity and adding a bid for longer-dated contracts as a hedge against potential supply constraints.
From May through August 2024, several Brazilian agricultural regions, which together produce about a third of the world’s coffee, endured their harshest drought since 1981. The stress disrupted flowering, reduced berry set, and lowered the potential yield for both Arabica and Robusta in some zones. Analysts say the drought intensified existing tightness in global stocks and could sustain upward pressure on prices into the next harvest cycle, especially if weather patterns remain unfavorable.
By early September reports indicated Angola was prepared to increase its coffee shipments to Russia. Angola has started promoting its coffee in Russia, launching campaigns in St. Petersburg last year and planning similar outreach in Moscow this year. The development points to a gradual broadening of trade routes for coffee and may introduce new supply dynamics to regional markets that import from African producers.
In Russia, questions about tea and coffee prices surfaced as the market adjusted to ongoing weather-driven supply shifts and changing export flows. The unfolding price environment is shaping consumer expectations and retail pricing in major markets, including the United States and Canada, as traders weigh currency moves, harvest prospects, and policy signals that will influence coffee and tea prices in the quarters ahead.