On Tuesday, coffee prices increased following the heightened concerns about global production, underpinning moderate gains.
US coffee futures for March shipments climbed by 0.92% to $3.12 per pound on November 26’s Asian afternoon trading.
Additionally, the current data still remains under the significant highs on Monday. In connection with this, the March Arabica contracts peaked while the December delivery of the variety incurred a 27-year nearest-futures high.
At the same time, robusta variety of the main ingredient for America’s favorite beverage recorded a seven-week high on Monday.
Nevertheless, coffee prices continue to grow, driven by long-term crop damage in Brazil. Based on reports, the country is currently experiencing adverse drought conditions.
In line with this, the number of shower activities in Brasilia has consistently remained below average since April. For this reason, commodity trees were damaged during a crucial stage of flowering.
According to the natural disaster monitoring center Cemaden, Brazil is encountering the driest temperature since 1981. Similarly, Somar Meteorologia revealed that the Minas Gerais region received 6.00 millimeters (mm) of rain in the previous week.
Moreover, the below-average precipitation in the area could diminish the production rate, pushing prices upward. Correspondingly, the world’s top producer of the bean lowered its 2025/26 season arabica coffee crop output estimate.
New York Coffee Futures Rise on Supply Woes
As indicated by reports, coffee contracts in New York hit their peak levels, prompted by the amplified concerns regarding crop yields in Vietnam.
More specifically, the cost of the bean advanced sharply in 2024. Arabica variety rose by 2.40%, marking a 64.00% boost since the start of the year.
In addition, the recent gains are indicative of wider supply challenges, which could lead to more price hikes.
Furthermore, Vietnam is facing problems with shortages in labor and delays in deliveries, compounding the worries over coffee reserves. Meanwhile, the overall supply strain may generate higher prices in the market.
