Why are Coffee Prices Nearing Fifty Years High? Are There Any New Price Peaks on the Horizon?

Adverse weather conditions are driving a surge in coffee prices, with Arabica beans nearing 50-year highs. This price spike is primarily due to a reduced supply from Brazil, the world's largest coffee producer, alongside similar challenges faced by other major producers, such as Vietnam.

Brazil Coffee Crop Outlook: Impact of Prolonged Dry Spells on 2025/26 Production

Prolonged dry spells in Brazil's key coffee-producing regions, including Minas Gerais, S?o Paulo, and Espírito Santo, have raised concerns about the upcoming 2025/26 coffee crop season. These regions, responsible for a significant portion of Brazil's coffee output, have experienced reduced rainfall during critical growth periods, exacerbating water stress on coffee plants. The current drier-than-normal conditions adversely affect plant health, with potential implications for flowering, bean development, and overall yield.

Impact on Production

Brazilian coffee production for the 2025/26 season is forecasted to decline to an estimated 59–60 million, representing a 9% reduction compared to the previous season.

The current weather conditions in Brazil are having a profound impact on the country's coffee production, creating a ripple effect throughout the global coffee market. Prolonged periods of below-average rainfall in major coffee-growing states—Minas Gerais, S?o Paulo, and Espírito Santo—have significantly stressed coffee plants, disrupting their growth and development. This has led to a potential decline in yields for the 2025/26 coffee crop, and the resulting supply constraints are driving upward pressure on coffee prices.

Up to where coffee bean prices will go. Will it cross all the market expectations and reach a new high? How may it affect your procurement budget? Connect with an Expert for in-depth analytics on coffee production and price outlooks for next quarter, our detailed quarterly report at www.transgraph.net/coffee covers all the details of the price drivers and a mid-term outlook.