"World Is Running Out Of Coffee": Arabica Futures Hit New Highs As Brazil Troubles Worsen

Arabica coffee futures have reached a new record high of $4.36 per pound, fueled by worsening conditions in Brazil. Adverse weather, including severe drought, extreme heat, and past frost damage, is significantly impacting Brazil's coffee harvest. This has led to widespread concerns about a global coffee supply deficit. Experts warn that frost damage could be a "death blow" to future harvests, with no significant supply recovery expected until 2029 or 2030. Brazil, a top coffee exporter, is experiencing a substantial drop in exports this year. The current situation is described as an unprecedented supply deficit with no readily available alternative sources. Coffee roasters are facing severe shortages, as the physical availability of coffee is diminishing rapidly. Despite discussions about tariffs, the fundamental issue remains a lack of supply, not trade policies. The market anticipates further price increases, potentially reaching $5-6 per pound. The upcoming winter consumption season in the Northern Hemisphere will exacerbate the supply crunch. Commercial players in the coffee chain will be forced to secure limited physical coffee, driving up prices further. Growers are advised to sell at market prices, as the market relies on their production. The current global coffee market situation is historically dire, with only weeks of supply available at importing ports.