One of the most traded commodities in the world captures the highest level in 50 years! Analysts: It will take years to recover!
The record rise in the price of coffee is showing no sign of slowing, analysts say, with some warning that it could take years for one of the world's most traded commodities to recover.
Arabica coffee prices reached 348.35 cents per pound, marking their highest level in nearly 50 years. The contract has since trimmed some of its gains, but remains up 70% year-to-date.
The last time the price of Arabica, the world's most popular variety, was this high was in 1977 when snow destroyed large areas of Brazilian plantations.
Known for their smooth taste and sweet aroma, Arabica beans make up between 60% and 70% of the global coffee market. They are commonly used in Espressos and other barista-made coffees.
Drought and high temperatures, along with a global reliance on supplies from relatively few regions, are seen as the main drivers for recent price increases.
Robusta, meanwhile, also climbed to a fresh record high in late November. Robusta beans are known for their strong, bitter flavor and are commonly used in instant blends.
The extraordinary rally in coffee prices, which is considered the second most traded commodity by volume after crude oil, comes amid concerns about the 2025 crop in Brazil, by far the world's biggest producer.
For some, poor growing weather in Brazil means it may take a long time for coffee prices to moderate.
For coffee drinks, analysts say it's virtually inevitable that coffee producers will have to pass costs on to consumers in order to limit the impact of higher bean prices on their bottom line.
Nestlé, the world's biggest coffee maker, which owns major brands including Nescafé and Nespresso, said last month it would continue to raise prices and make smaller packages to offset the impact of higher prices.
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